The US will not block China from growing its economy or try to change its political system, Blinken said, but it will defend international law and institutions that maintain peace and security and make it possible for countries, including the United States and China, to coexist.
"We are not looking for conflict or a new Cold War. To the contrary, we're determined to avoid both," Blinken said in the 45-minute speech at George Washington University, which covered the gamut of the most contentious issues in bilateral ties.
US-China relations sank to their lowest level in decades under the administration of president Donald Trump and have soured further under President Joe Biden, who has so far kept up his predecessor's sweeping tariffs on Chinese goods, but also has pursued closer ties with allies in the Pacific and beyond to push back on China's growing influence.
Seventeen months into his administration Biden had faced criticism from Republicans and some foreign policy watchers for not announcing a formal strategy on China, the world's second-largest economy after the United States.
Foreign crises, including the messy US withdrawal from Afghanistan last year and Russia's war in Ukraine, have created distractions for Biden, who has vowed not to let China surpass the United States as global leader on his watch.
But his administration has sought to capitalise on fresh solidarity with allies spurred by the Ukraine crisis and the "no-limits" partnership China announced with Russia just weeks before the February 24 invasion.
Blinken's speech coincides with the start of a sweeping tour by China's foreign minister of Pacific island countries, an increasingly tense front in competition for influence between China and the US and its allies.
The US remains focused on China, which poses "the most serious long-term challenge to the international order," Blinken said.
The US has long complained of what it says are China's unfair trade practices, such as state-led subsidies and market access barriers, as well as its increasing economic coercion toward other countries.
While Blinken credited the hard work of the Chinese people for their country's historic economic transformation in the last four decades, he assailed China's leader Xi Jinping.
"Under President Xi, the ruling Chinese Communist Party has become more repressive at home and more aggressive abroad," he said, adding that the party was using its power to undermine the principles and institutions that enabled its success.
In the speech, he laid out the contours of a strategy to invest in US competitiveness and align with allies and partners to compete with China, calling that competition "ours to lose".
Blinken said Biden stood ready to increase direct communication with China across a full range of issues and would "respond positively" if Chinese officials take action to address concerns.
"But we cannot rely on Beijing to change its trajectory. So we will shape the strategic environment around Beijing to advance our vision for an open and inclusive international system," he said.
Increased US support for the Chinese-claimed democratic island of Taiwan remains a point of contention, even though the United States, formally, has kept its long-standing policy of strategic ambiguity on whether it would defend Taiwan militarily.
Blinken reiterated US commitment to the one-China policy, even though Biden earlier this week said the United States would get involved militarily should China attack Taiwan.Â
He and his aides later said his remarks did not reflect a shift in policy.
"What has changed is Beijing's growing coercion, like trying to cut off Taiwan's relations with countries around the world, and blocking it from participating in international organisations," Blinken said, adding that the Chinese military's nearly daily activity near the island was "deeply destabilising".
Blinken's address was postponed once after he tested positive for COVID-19 earlier in May and follows a month of intensive US diplomacy focused on Asia and the Pacific including Biden's first trip as president to the region.
The president's meetings there with leaders from South Korea, Japan, India, and Australia were intended, in part, to push back against China's growing influence.
Biden also has sought to create fresh momentum in ties with Southeast Asia, declaring a "new era" of relations at a summit in Washington DC this month.
