US Vice President Joe Biden warned China on Thursday against escalating a dispute over an East China Sea air zone, adding that regional peace and stability were in Beijing's interests.

Biden also criticised China's tightening of controls on foreign journalists, stressing that the world's second-largest economy could become more prosperous with American values such as human rights and freedom of speech.

China's controversial move last month to declare an "air defence identification zone" (ADIZ) -- which includes islands disputed with Japan -- has "caused significant apprehension in the region", Biden told a group of 60 American business leaders Thursday morning.

"As China's economy grows, its stake in regional peace and stability will continue to grow as well, because it has so much more to lose," he added.

"That's why China will bear increasing responsibility to contribute positively to peace and security."

Biden reiterated in his meetings with Chinese President Xi Jinping that the US does not recognise China's newly-declared air zone, a senior White House official told reporters in Beijing late Wednesday.

China says all aircraft within it must obey its instructions or risk unspecified "defensive emergency measures".

The move provoked anger in the region and prompted the US, Japan and South Korea all to defy Beijing by flying military and paramilitary aircraft -- including two B-52 bombers in Washington's case -- into the newly-declared zone.

The US official, who spoke anonymously in order to discuss Biden's talks, added that it is now up to Beijing to take action "to avoid the risk of mistake, miscalculation, accident or escalation".

Chinese foreign ministry spokesman Hong Lei, meanwhile, said Thursday that the US "should respect" that the zone "is in line with international laws and conventions".

Beijing sees Tokyo as the aggressor in the dispute over the islands, which are controlled by Japan but claimed by China.

Biden went on to South Korea late Thursday for the final leg of his three-country trip before returning to Washington.

Despite the heightened nationalistic feelings and rhetoric surrounding the issue -- which hinges on a decades-old dispute over the Tokyo-controlled island group -- experts say that any outbreak of violence remains unlikely, as the major trade relationship between the two Asian powers is a strong incentive for both sides to avoid conflict.

'Innovation thrives where people breathe freely'

On his China visit -- his second trip to the world's second-largest economy since becoming US vice president in 2009 -- Biden also emphasised the importance of freedom of expression and human rights, saying that they were key to its future prosperity.

"Innovation thrives where people breathe freely, speak freely, are able to challenge orthodoxy, where newspapers can report the truth without fear of consequences," he said, adding that China "will be stronger and more stable and more innovative if it respects universal human rights".

The comments Thursday came after he told mostly young Chinese visa applicants at the US embassy Wednesday that "children in America are rewarded, not punished, for challenging the status quo."

"I hope you learn that innovation can only occur where you can breathe free, challenge the government, challenge religious leaders," he added.

China's ruling Communist Party maintains a tight grip on political dissent, and while authorities routinely say their country protects lawful freedom of speech and religion, rights groups and others note that abuses are rampant.

Biden's comments did not go unnoticed by China's state-run Global Times, which often takes a nationalistic tone and dismissed his remarks in an editorial Thursday.

Americans should "not hold prejudice toward China's so-called nationalism", it said. "They may reflect if they need to adjust their behaviour when a society as understanding and mild as China cultivates nationalism toward the US."

Biden voiced criticism of Beijing's treatment of American journalists, becoming the highest-ranking US leader to speak out on the issue.

Several US news outlets that have published investigations into Chinese leaders' family wealth had their websites blocked in the country and not received visas for their reporters.

The US and China still have "many disagreements", Biden said, including some he described as "profound" such as on "the treatment of US journalists".

Foreign ministry spokesman Hong responded that "we have been providing a very convenient environment for news coverage for foreign media and the working and living environment for foreign media in China is good".

"As long as you are objective and just, I think an objective conclusion can be reached on that," he said.

Before leaving Beijing, Biden visited a bookstore and attended a tea ceremony at a local teahouse.