By Arshad Mohammed

ULAN BATOR (Reuters) - Secretary of State Hillary Clinton on Monday held up Mongolia's sometimes messy politics as a democratic model for Asia, and implicitly criticized political restrictions in China.

Recalling her 1995 visit as first lady, Clinton said the resource-rich nation sandwiched between Russia and China had held a string of successful parliamentary elections in the 22 years since independence from the Soviet Union.

"I believe as strongly today as I did then that Mongolia is an inspiration and a model," she said in a speech at Government House, an imposing Stalinist structure from the Soviet era.

As mining money pours in, Ulan Bator has the air of a boom town with cranes and building sites dotting the horizon, a shiny Mercedes dealership and a Louis Vuitton boutique. Still, there have been complaints the country's leadership has not done more to spread the wealth among its population of 2.7 million.

Making a broad case for democracy and good governance in Asia, Clinton cited reforms in nations including Myanmar, where the generals that ruled for nearly half a century have given way to a quasi-civilian government that has freed political prisoners and permitted the formation of political parties.

"They stand in stark contrast to those governments that continue to resist reforms - that work around the clock to restrict people's access to ideas and information, to imprison them for expressing their views, to usurp the rights of citizens to choose their leaders, to govern without accountability, to corrupt the economic progress of the country and take the riches unto themselves," Clinton said.

Without citing it by name, Clinton's comments appeared aimed partly at China.

"Countries that want to be open for business but closed to free expression will find the approach comes with a cost: it kills innovation (and) discourages entrepreneurship, which are vital for sustainable growth," she said.

"You cannot, over the long run, have economic liberalization without political liberalization."

Clinton praised Mongolia's democracy despite some concerns over the April arrest of former president Nambar Enkhbayar on corruption charges that his family says were fabricated. Continued...