US says Chinese claims to offshore resources across most of the contentious sea are "completely unlawful". Beijing says Washington is trying to sow discord.
China has hit back at the US branding of Beijing's pursuits in the South China Sea as illegal, saying the accusation was "unjustified' and a bid to sabotage regional peace.
"We advise the US side to earnestly honour its commitment of not taking sides on the issue of territorial sovereignty, respect regional countries’ efforts for a peaceful and stable South China Sea and stop its attempts to disrupt and sabotage regional peace and stability," the Chinese embassy in Washington said in a statement on Tuesday.
"The United States is not a country directly involved in the disputes. However, it has kept interfering in the issue," the embassy said.
"Under the pretext of preserving stability, it is flexing muscles, stirring up tension and inciting confrontation in the region."
Pompeo targets China
The Chinese reaction came after the US said it would treat Beijing's pursuit of resources in the dispute-rife South China Sea as "illegal", ramping up support for Southeast Asian nations.
"We are making clear: Beijing's claims to offshore resources across most of the South China Sea are completely unlawful, as is its campaign of bullying to control them," US Secretary of State Mike Pompeo said on Monday.
It was the latest forceful statement by President Donald Trump's administration to challenge China, which he has increasingly cast as an enemy ahead of November elections.
"The world will not allow Beijing to treat the South China Sea as its maritime empire."
US says room for sanctions
The top US diplomat for East Asia said that the United States could respond with sanctions against Chinese officials and enterprises involved in coercion in the South China Sea.
"Nothing is off the table ... there is room for that. This is a language the Chinese understand - demonstrative and tangible action," David Stilwell, the assistant secretary of state for East Asia, told a Washington think tank when asked if sanctions were a possible US response to Chinese actions.
READ MORE: The South China Sea dispute explained
US rejects 'might makes right'
The United States has long rejected Beijing's sweeping claims in the South China Sea, which is both home to valuable oil and gas deposits and a vital waterway for the world's commerce.
Pompeo's statement goes further by explicitly siding with Southeast Asian nations including the Philippines and Vietnam, after years of the United States saying it took no position on individual claims.
"America stands with our Southeast Asian allies and partners in protecting their sovereign rights to offshore resources, consistent with their rights and obligations under international law," Pompeo said.
"We stand with the international community in defence of freedom of the seas and respect for sovereignty and reject any push to impose 'might makes right' in the South China Sea or the wider region."
China earlier this month defended itself against US criticism over Beijing's military exercises in the South China Sea, saying its activities were "within the scope of China's territorial sovereignty."
Rejecting basis of claims
Beijing claims the majority of the South China Sea through the so-called nine-dash line, a delineation based on maps from the 1940s when the Republic of China snapped up islands from Japanese control.
Pompeo issued his statement to mark the fourth anniversary of a tribunal decision that sided with the Philippines against the nine-dash line.
Pompeo said that China, based on the court decision, cannot make claims based on the Scarborough Reef or the Spratly Islands, a vast uninhabited archipelago.
The United States as a result now rejects Beijing's claims in the waters surrounding Vanguard Bank off Vietnam, Lucania Shoals off Malaysia, waters considered in Brunei's exclusive economic zone, and Natuna Besar off Indonesia, Pompeo said.
"Any PRC action to harass other states' fishing or hydrocarbon development in these waters –– or to carry out such activities unilaterally –– is unlawful," Pompeo said.
Beijing has built bases atop atolls in the region but says its intentions are peaceful.
Friction across fronts
The South China Sea statement comes amid rising tensions surrounding China, including a deadly border clash last month with India that Pompeo called part of a strategy by Beijing to challenge its neighbours.
Trump has also strongly criticised China for not doing more to stop the coronavirus pandemic, news of which was initially suppressed when it emerged in Wuhan late last year.
Critics both at home and abroad say that Trump is hoping to deflect attention ahead of the November election over his own handling of the virus in the United States, which has suffered by far the highest death toll of any country.
Trump, after bipartisan calls in Congress, has also stepped up pressure on China over its incarceration of more than one million Uighurs and other Turkic Muslims.
The United States last week imposed sanctions on Chinese officials including Chen Quanguo, the Communist Party chief in the western Xinjiang Uighur Autonomous Region.
China on Monday took tit-for-tat action against some of its outspoken critics in Congress, including Senators Marco Rubio and Ted Cruz and Representative Chris Smith.