"China's policy in the South China Sea stands in stark contrast to the openness that our strategy promotes, it calls into question China's broader goals", said Mr Mattis, who said he would be travelling to Beijing this month.
I believe China has more in common with Pacific Ocean nations, the United States and India than they have in common with Russian Federation. And he said he doesn't believe that China's actions will pay off.
Mattis told Asia's biggest security conference Saturday that China's deployment of missile batteries and bombers to outposts in the disputed area was "a reality" the USA and its allies would have to deal with.
In a dig at China, which the Pentagon has accused of using "predatory" economics to exploit neighbours, Mattis said the United States supports the peaceful resolution of disputes, "free, fair and reciprocal trade and investment" and adherence to worldwide rules and norms.
Gen Mattis said Beijing had deployed military hardware, including anti-ship missiles, surface-to-air missiles and electronic jammers to locations across the South China Sea.
"All irresponsible remarks [on the subject] are an infringement of China's domestic affairs." he told a press conference just two hours after Mattis said in his speech at the event that Beijing had been "intimidating and coercing" its neighbours with its military activities in the disputed waterway.
"The U.S. will continue to pursue a constructive, results-oriented relationship with China, cooperating when possible and competing vigorously where we must", Mattis said.
Lieutenant General He Lei (L), vice president of the People's Liberation Army's Academy of Military Science, and Hajit Sajjan (R), Canadian National Defense Minister, attend the first plenary session of the 17th Asian Security Summit of the IISS Shangri-La Dialogue in Singapore on June 2, 2018.
Mattis responded by saying there was a "fundamental disconnect" between China's views on the waters and how worldwide tribunals view them.More news: Uber CEO doubles down on self-driving tests
"We do not see it as a militarization by going through what has traditionally been an global water space", said Mattis of the USA ship movements through the South China Sea.
Gen Mattis said the issue of removing U.S. troops from South Korea was "not on the table" and that "our objective remains the complete, verifiable, and irreversible denuclearisation of the Korean peninsula".
Mattis only made a glancing reference to North Korea, reiterating that it was a diplomatically led effort and the objective remained the "complete verifiable, and irreversible denuclearisation of the Korean Peninsula".
The United States has long demanded that North Korea give up its nuclear weapons.
The Pentagon leader's comments at the annual Shangri-La Dialogue came in the wake of a tumultuous few weeks between the USA and China.
China believes islands, islets and other maritime features in the South China Sea are its sovereign territory and that it is within its rights to build defenses on them. It was the latest freedom of navigation operation created to challenge Beijing's claims.
Despite his criticism, Gen Mattis added that the United States would "continue to pursue a constructive, results-oriented relationship with China" with "co-operation whenever possible".
China has sent a relatively low-level delegation to this year's Shangri-La forum, and there is now no Chinese official scheduled to give the traditional Sunday speech to the gathering, in what had become an outlet for a riposte to the U.S.