"The United States is a Pacific power, and we are here to stay," Obama said in a speech to the Australian parliament, a day after announcing that the US would send military aircraft and up to 2,500 Marines to northern Australia.
China immediately questioned the US move and said it deserved further scrutiny.
Addressing the special joint sitting of the Australian Parliament, Obama told MPs and senators he had directed his national security team to make "our presence and mission in the Asia-Pacific a top priority". "As a result, reductions in United States defence spending will not, I repeat, will not come at the expense of the Asia-Pacific," he said.
While he stressed that the US was "here to stay" as a Pacific power, he said the US is focused on the region as the one that will define the future of the world. "The United States has and always will be a Pacific nation. Let there be no doubt, in the Asia?Pacific in the 21st century, the United States of America is all in," he said.
Obama said that given its size, resources and the economic growth that the region had witnessed in recent years, Asia-Pacific countries were playing an increasingly important role globally. "As the world`s fastest-growing region - and home to more than half the global economy - Asia is critical to achieving my highest priority: creating jobs and opportunity for the American people," Obama said.
"With most of the world`s nuclear powers and nearly half of humanity, this region will largely define whether the century ahead will be marked by conflict or co-operation, needless suffering or human progress," he said.
He said that the US was keen to increase its presence in the region and play a bigger role in its development and progress. "As president, I`ve therefore made a deliberate and strategic decision - as a Pacific nation, the United States will play a larger and long-term role in shaping this region and its future, by upholding core principles and in close partnership with allies and friends."
Obama said US military, along with Australians, had fought and died in the region and its mission now was to promote security, prosperity and human dignity. "Americans have bled with you for this progress and we will never allow it to be reversed," he said. "That`s what we stand for, that`s who we are, that`s the future we will pursue in league with our allies and friends with every element of American power."
Obama and Australian Prime Minister Julia Gillard on Wednesday announced an expansion of US military activity in Australia, beginning with an increase in the presence of US Marines from mid-2012, a move that angered China.
Obama addressed the Chinese unease, pledging to seek greater cooperation with Beijing. He welcomed the rise of China as a world economic and military power but said he wanted more engagement between US and Chinese armed forces "to avoid misunderstandings".
"All of our nations have a profound interest in the rise of a peaceful and prosperous China," he said, adding the US would welcome it. "We`ve seen that China can be a partner from reducing tensions on the Korean Peninsula to preventing proliferation."
The US would seek more opportunities for cooperation with China including greater "communication" between their respective militaries to promote understanding and avoid "miscalculation", he said.
Obama also referred to China`s poor record on human rights, free trade, intellectual property theft, its refusal to fully float its currency and the lack of freedoms granted to the Chinese people. "We will do this even as we continue to speak candidly to Beijing about the importance of upholding international norms and respecting the universal human rights of the Chinese people."
According to local media reports here, the military build-up announced last night was a response to the rising power of China and India. In addition, American military aircraft - including bombers, fighters, tankers and spy planes - will increase their use of the Tindall Air Force base. Further down the track, US ships and submarines will use the Stirling naval base near Perth.