US Defense Secretary Ashton Carter on Tuesday told his Chinese counterpart Chang Wanquan that the American military would continue to operate in the South China Sea.

US Defense Secretary Ashton Carter on Tuesday told his Chinese counterpart Chang Wanquan that the American military would continue to operate in the South China Sea.

With tensions still simmering after a US naval vessel sailed close to artificial islands China is building in the disputed waters, the pair met for about 40 minutes on the sidelines of a regional defense meeting.

"(Carter) once again reaffirmed that the United States will continue to fly, sail and operate wherever international law allows," a senior US defense official said after the two defense chiefs met in Kuala Lumpur.

"And he clearly made the case that the South China Sea would not be an exception."

Carter's comments came hours after his top US admiral in the Pacific region, Harry Harris, gave a speech in Beijing in which he told China that the US military would continue to sail "wherever" international law allows.

Carter also discussed Washington's concerns over alleged Chinese cyber-attacks.

In a meeting that was "business-like and cordial", Chang reiterated Beijing's position that the islets are sovereign Chinese territory and its displeasure with the guided missile destroyer USS Lassen's presence.

The ship last week sailed within 12 nautical miles of at least one of the land formations China claims in the disputed Spratly Islands.

"They made it clear that they don't like these measures," a second defense official said. "But there was none of the fiery rhetoric that you may have seen in media from other officials."

The officials said China described a "bottom line", below which it would defend the islands.

But Carter and the US delegation saw this as open to interpretation and not an ultimatum that would deter future US sailings in the contested region.

Their talks took place in Kuala Lumpur at a meeting for defense ministers from the 10-country Association of Southeast Asian Nations (ASEAN).

The ASEAN defense chiefs are to formally sit down Wednesday with Carter, Chang and their counterparts from Russia, Australia and elsewhere in the region as part of a broader annual dialogue.

Carter's Malaysia visit is part of an eight-day trip to the Asia-Pacific region.