Mr Mattis said maintaining freedom of navigation in the region was...
China's hostility towards self-ruled Taiwan has grown since Tsai Ing-wen from the pro-independence Democratic Progressive Party won presidential elections on the island in 2016.
It comes days after Philippine President Rodrigo Duterte was said to have threatened war if his troops were harmed in the area, which his country also lays claim to. Many nations fear that Beijing will use the construction on the islands to extend its military reach and potentially try to restrict navigation in the South China Sea.
The U.S., he said, "will continue to pursue a constructive, results-oriented relationship with China, cooperation when possible, and competing vigorously where we must".
Instead, Mattis said any discussions about USA troops would be between Seoul and Washington.
The U.S. Navy on Sunday conducted the latest of its "freedom of navigation" patrols near China-occupied features to demonstrate the right to sail through what it considers to be worldwide waters.
Mattis' comments triggered an equally pointed reaction from a Chinese official at the meeting.More news: 54-Year-Old Brigitte Nielsen Is Pregnant With Her Fifth Child!
Mattis also touched on Taiwan, a longstanding dispute between the USA and China. He Lei, a deputy president of the Academy of Military Sciences at the People's Liberation Army, headed the Chinese delegation to the Shangri-La Dialogue, and said the disputed islands in the South China Sea are Chinese territory.
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".
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. "There are consequences that will continue to come home to roost, so to speak, with China, if they don't find a way to work more collaboratively with all of the nations who have interests".
The defence secretary also confirmed the Pentagon was keen to help Taiwan defend itself, in comments that were likely to further anger China, which also claims the island. "This is not a revisionist view", Mattis said.
Mattis warned there could be "much larger consequences" in the future from China's installation of weapons on disputed islands, the Wall Street Journal reported.
Trump said on Friday an unprecedented nuclear arms summit with North Korean leader Kim Jong Un that the United States pulled out of will now go ahead as scheduled on June 12 in Singapore, adding another twist to a high-stakes diplomatic dance.
"Our objective remains the complete, verifiable, and irreversible denuclearisation of the Korean peninsula".
But the message of inclusivity, cooperation and working with allies might be a tougher sell for Mattis, who is generally popular on the global scene, after his boss this week imposed metals tariffs on some of America's closest allies in the name of "national security".