President Joe Biden will impose costs on China but also work to repair democracy at home in a bid to win the emerging rivalry between the world's top two economies, a top aide said Friday.

Jake Sullivan, the national security advisor, said that the new administration's strategy included renewing alliances and robust investment in technology to ensure the United States retains a critical edge.

In a veiled reference to defeated president Donald Trump, whose baseless allegations of election fraud culminated in a mob attack on the US Capitol, Sullivan said that China was becoming more explicit in contending that it had a better model.

"They're pointing to dysfunction and division in the United States and saying -- take a look at that, their system doesn't work, our system does," Sullivan said at the US Institute of Peace.

"So step one," he said, "is to refurbish the fundamental foundation of our democracy."

"And that goes for everything from our democratic system itself to issues of racial inequity to issues of economic inequality -- all the things that have contributed to the shine coming off the American model."

The Biden administration has indicated that it will maintain Trump's tough line on China, in substance if not always in tone, on issues from trade to human rights -- including what the United States has described as genocide against the mostly Muslim Uighur people in the western Xinjiang region.

Sullivan said the administration will "impose costs for what China is doing in Xinjiang, what it's doing in Hong Kong, for the bellicosity and threats that it is projecting towards Taiwan."

"With our allies and partners in both Europe and Asia, we represent well more than half of the world's economy, Sullivan said, saying that provided "the kind of leverage we need to be able to produce outcomes."

Trump's last national security advisor Robert O'Brien, speaking at the same event, said the Biden administration was "off to a great start on China."

Sullivan said that the Biden administration would also heavily promote research in areas including artificial intelligence, quantum computing, biotechnology and clean energy.

"That requires a combination of working closely with allies and partners in making aggressive, ambitious public investment here in the United States so that we stay on the cutting edge."

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