US Secretary of Defense Lloyd Austin says China's pursuit of hypersonic weapons "increases tensions in the region".
Mr Austin made the remarks in Seoul following annual security talks with his South Korean counterpart about challenges from China and North Korea, as well as other issues facing the allies.
He vowed the US would maintain its capability to deter potential threats posed by China.
"It just underscores why we consider the PRC to be our pacing challenge.
"We'll continue to maintain the capabilities to defend and deter against a range of potential threats from the PRC to ourselves and to our allies."
China's growing military muscle has triggered unease in Washington.
Beijing's efforts to accelerate its military capabilities were highlighted by its July test of a hypersonic weapon, capable of partially orbiting the Earth before re-entering the atmosphere and gliding on a manoeuvrable path to its target.
Experts say the weapons system is clearly designed to evade US missile defences, although China insisted it was testing a reusable space vehicle and not a missile.
On the issue of North Korea, Mr Austin said he and South Korean Defence Minister Suh Wook discussed several topics including bilateral unity in the face of the threat from the North.
Both agreed that North Korea's advancement of its missile and other weapons programs was "increasingly destabilising for regional security," Mr Austin said.
He said the US and South Korea remained committed to a diplomatic approach to North Korea.
Mr Suh said the allies shared an understanding that "diplomacy and dialogue based on previous commitments between South and North Korea and between North Korea and the United States is essential for achieving permanent peace on the Korean Peninsula."
Despite severe pandemic-related economic hardships, North Korea has continuously rebuffed US offers to resume talks, saying Washington must first abandon its hostility towards the Pyongyang regime.
The Biden administration maintains that international sanctions on North Korea will stay in place unless the country takes concrete steps toward denuclearisation.
Earlier this week, the Pentagon released the results of a global posture review that directed additional cooperation with allies and partners to deter "potential Chinese military aggression and threats from North Korea."
The review also informed Mr Austin's approval of the permanent stationing of a previously rotational attack helicopter squadron and artillery division headquarters in South Korea.
AP
