US Defence Secretary Leon Panetta on Sunday praised China for what he said was a restrained response to an arms sale to Taiwan, saying he hoped for improved military cooperation with Beijing.

"I guess I would commend them for the way that they've handled the news of that sale to Taiwan," Panetta told reporters in Indonesia, on the first stop of an Asian tour.

"I think we'd given the Chinese a heads up as to what was going to take place, and in the end I think they handled it in a professional and diplomatic way and we appreciate that," Panetta said in rare praise for Beijing.

China had repeatedly condemned a $5.85 billion US deal to upgrade Taiwan's fleet of F-16 fighter jets, and after the deal in September Beijing warned it would damage military ties with Washington and impact military exchanges.

"My hope is to improve our military to military relationship with the Chinese," Panetta said.

In his first trip to the region since taking the helm in July at the Pentagon Panetta, the former CIA director, began his tour in Indonesia before heading to Japan on Monday and South Korea on Wednesday.