Mr Mattis is in Vietnam for talks aimed at bolstering military ties between Washington and Hanoi, which has its own territorial claims in the South China Sea.
He said US officials were “highly concerned” about China’s “predatory behaviour” and also accused Beijing of deliberately piling debt on smaller countries to pay for Chinese-backed infrastructure projects.
Mr Mattis said: “We remain highly concerned with the continued militarisation of features in the South China Sea.
“We look at the — what we consider to be almost predatory, in some cases certainly predatory — economic behaviour of China which is encouraging smaller countries to pile on massive debt that fiscal analysis would say they are going to have difficulty, at best, repaying.”
Mr Mattis insisted the US still wanted a relationship with China grounded in fairness, reciprocity and “respect for international rules and for all nations’ sovereignty, whether they’re large or small.”
He acknowledged the two countries would sometimes “step on each other’s toes” as two large powers in the Pacific but said they had to find ways to manage their relationship.
Last month a Chinese naval vessel and American warship USS Decatur were involved in a near-miss near the disputed Spratly Islands in the South China Sea, prompting Mr Mattis to cancel a planned trip to Beijing.
China’s US ambassador Cui Tiankai blamed the Americans for the incident and accused the Decatur’s crew of sailing too close to Chinese waters.
He also rejected claims Beijing was to blame for stoking tensions in the region, saying Chinese warships were not “going to the coast of California or to the Gulf of Mexico”.
Mr Mattis responded by pointing out that if Chinese ships did sail to the Gulf of Mexico they would be in international waters.
He said: “The South China Sea is one of the most heavily trafficked international sea lanes of communication.
“So when the Chinese ships are putting bumpers over the side of it, you don’t do that when you’re out in the middle of the ocean, unless you’re intending to run into something.”
Mr Mattis’ visit to Ho Chi Minh City is his second trip to Vietnam this year, having visited the capital Hanoi in January, and he will also attend the Association of Southeast Asian Nations (ASEAN) Defence Ministers Meeting in Singapore tomorrow.
He said the US considers ASEAN “central to the security interest and maintaining peace in the Pacific”.