Clinton made her landmark visit to Dili, capital of East Timor, Thursday after holding talks with Chinese President Hu Jintao in Beijing. Clinton is the first U.S. Secretary of State to have officially visited Gili after the Southeast Asian nation won independence in 2002.
Clinton, who met with Prime Minister Xanana Gusmao and President Taur Matan Ruak, said her visit was a sign of the U.S. support for the country and praised its progress and democratic elections this year, the BBC reported.
She congratulated East Timor on "three sets of free and fair elections this year, and a peaceful transfer of power to a new president, government and parliament."
"Strong democracies, we know from long practice, make more stable neighbors and capable partners," Clinton added.
She said her visit signified "a clear, unmistakable message that the United States has been, is and will remain a resident Pacific power," adding that the U.S. focus on Asia was not about containing China.
"We happen to believe that Asia and the Pacific are big enough for many countries to participate in the activities of the region," Clinton was quoted as saying by the AFP.
According to the U.S. officials, the former Portuguese colony for more than 400 years, which won independence after decades-long struggle against the Indonesian occupation and three years of U.N. administration, is still weak.
East Timor receives energy revenues from the oil and natural gas fields it shares with Australia and owns a special oil fund with assets of more than $10 billion, Reuters reported.
Clinton visited a USAID-funded coffee processing plant in Gili. Coffee constitutes East Timor's second largest export and the U.S. firm Starbucks is a major customer, according to the report.
Clinton's visit is expected to improve East Timor's chances of getting accepted to the Association of Southeast Asian Nations (ASEAN).
The country's bid to join ASEAN was met with concerns that the country may still be too unstable and lacking political clout to become part of the regional bloc.
The nation, which lies across the Timor Sea from Darwin where the U.S. will deploy 2500 Marines by 2017, is expected to have a place in Washington's "pivot" to Asia diplomacy policy.
The U.S. move to deploy troops has annoyed Beijing but the U.S. and Australian leaders have stressed that the joint defense exercise was not an attempt to contain China.
Clinton's meeting with Hu and Chinese Foreign Minister Yang Jiechi failed to address the growing friction between the nations despite both parties pledging cooperation.
The meeting failed to reach a common ground on grueling issues including China's support to Syrian President Bashar al-Assad and territorial disputes in the South China Sea.
Chinese media extended a harsh reception to Clinton, with official Xinhua news agency slamming the U.S. for showing "little respect for China's sovereign rights" in the Asia-Pacific and for working with ASEAN "despite China's strong and perennial opposition."