Mr Andrews told the conference the sea lanes must remain open, as billions of dollars of vital trade passed through the region.

"The shared dependence of most east Asian countries upon the Indo-Pacific's maritime corridors, combined with the inability of any state to unilaterally secure its shipments, should be a powerful incentive to manage conflicting interests and ensure freedom of navigation and trade for all," he said.

"Australia has made clear its opposition to any coercive or unilateral actions to change the status quo in the South and East China Sea.

"This includes any large-scale reclamation activity by claimants [and] we are particularly concerned at the prospect of militarisation of artificial structures."

In his speech on Saturday Mr Carter said China had reclaimed more than 800 hectares of islands, which was more than other claimants combined.

"There should be an immediate and lasting halt to land reclamation activities by all claimants," Mr Carter said.

"We also oppose any militarisation of disputed features. We all know there is no military solution to the South China Sea disputes."

Mr Carter also said the US would exercise freedom of passage through the disputed areas.


"There should be no mistake, the United States will fly, sale and operate wherever international law allows, as US forces do all around the world.

Mr Carter also on Saturday announced a $425 million initiative to help south-east Asian nations improve their naval and coastguard fleets.

Chinese foreign ministry spokeswoman Hua Chunying accused the US of "making absurd remarks about China's long-established sovereignty and rights, stirring up trouble and slinging accusations regarding China's appropriate and rational construction activities on its islands".

Prime Minister Tony Abbott is understood to be considering options for adopting a tougher stance to the Chinese land grab including "sail-throughs" with RAN warships or aerial surveillance patrols as a demonstration of the principle of freedom of navigation.

Beijing was angered last week when the US dispatched a P-8 surveillance aircraft over areas China claims are its own territory in dispute with its neighbours.

The US ignored Beijing's demands it remove the aircraft, with Washington insisting it has every right to traverse what it regards as international air space.

China warned Australia not to do anything in its relationship with the US that would harm Beijing's interests after it was revealed Canberra and Washington were in talks over hosting the supersonic B1 bomber at Australia airbases.

The Shangri-La Dialogue is also taking place just days after Beijing released a more assertive defence white paper, which was viewed as warning the US not to meddle in Chinese affairs.

WITH AGENCIES