"We've made it very clear that a unilateral, unannounced, unprocessed initiative like that can be very challenging to certain people in the region, and therefore to regional stability," Kerry said after separate meetings with Xi and Premier Li Keqiang.
The US along with its ally Japan had objected to China establishing an Air Defence Identification Zone (ADIZ) over the disputed islands in the East China Sea and refused to recognise it.
"We made clear our feelings on any unilateral announcement," Kerry told reporters.
Any such moves should be done "in an open, transparent, accountable way," he said, adding China should meet "the highest standards" of openness "to reduce any possibilities of misinterpretation".
On the South China Sea dispute, Kerry said that he hopes China and the Association of Southeast Asian Nations (ASEAN) make "rapid strides in negotiating the code of conduct that would reduce tensions".
Meanwhile, China took exception to US assertions that it would come to the aid of the Philippines and Japan over a host of issues including deepening tension over disputed islands.
"US is not a party to the dispute in South China Sea (SCS) and it should honour its commitments to take no sides on the territorial sovereignty issue on the SCS issue," Chinese Foreign Ministry spokesperson, Hua Chunying said here as Kerry met Xi and other top Chinese leaders on his two-day visit.
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