He said he would visit Beijing soon at China's invitation.
Last month, China landed bomber aircraft on islands and reefs in the sea as part of a military training exercise.
He called the U.S. action a "relatively small consequence".
"I believe there are much larger consequences in the future when nations lose the rapport of their neighbours. eventually these (actions) do not pay off", Mattis said.
China's reliance on military muscle to achieve its goals "is not a way to make long-term collaboration the rule of the road in a region that's important to China's future", Mattis said, when asked to elaborate.
The Pentagon chief said the USA was "steadfastly committed to working with Taiwan to provide defence articles" consistent with the "obligations set out in our Taiwan Relations Act".
The Pentagon chief gave only a brief mention of the negotiations for the planned June 12 summit in Singapore between Trump and North Korean leader Kim Jong Un.
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"That issue is not on the table here in Singapore on the 12th, nor should it be", Mattis said.
A Chinese general on Saturday, June 2, lashed out at "irresponsible comments" on Beijing's military build-up in the South China Sea after the U.S. defense chief accused China of intimidation and coercion in the disputed waters.
Mr Mattis told the security summit Beijing had deployed military hardware including anti-ship and surface-to-air missiles to locations across the South China Sea.
Mattis also struck at one of the key, longstanding disputes between the US and China, telling the conference that America will continue to provide defense equipment and services to Taiwan and oppose any effort to alter the status quo. He said Washington will continue to provide defense equipment and services to Taiwan and oppose any effort to alter the status quo.
During a question and answer session afterward, Mattis fielded a question from a Chinese colonel, who claimed that US freedom of navigation operations (FONOPs) are a provocation that violate global law.
Woody Island, which China calls Yongxing, is also claimed by Vietnam and Taiwan.
"The Chinese People's Liberation Army has the determination, confidence and ability to safeguard China's sovereignty, security, unity and development interest". China claims Taiwan as its own and it is one of its most sensitive issues.
Trump Says June 12 Meeting With Kim Jong-un Is Back On
"I think we're going to have a relationship and it'll start on June 12th", Trump said after meeting with Chol for almost an hour. We would be very happy to see you", Lavrov, seated across a table from Kim, said during a televised meeting.
But he also said the US welcomes cooperation with China "wherever possible", and announced that he has accepted Beijing's invitation to visit soon. It remains to be seen if that invitation will stand after this conference.
The incident was the first time Donald Trump's administration challenged Chinese claims to the disputed waters but Mr Mattis' speech represents a step up in the war of words.
Mattis responded that the question reflected a fundamental disconnect with the way worldwide tribunals have spoken on the matter.
China's state-run Global Times newspaper said in an editorial tension in the South China Sea was "due to the U.S. continuing to increase its military presence in the region, forcing China to naturally upgrade its defensive weapons on the islands".
He's comments were the first at such a public and worldwide event to acknowledge Beijing's plans to base both troops and weapons on its natural and man-made islands in the Paracel and Spratly archipelagoes.
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. China protested the maneuver. Trump announced Friday that the meeting was back on.
Syria FM: Iran has no combat forces, bases in the country
Those comments have raised concerns that USA -supported forces could end up in the Syrian government's crosshairs in the near future.