Speaking in Singapore on Saturday, Hagel accused China of a number of alleged infractions, including against the Philippines and Vietnam, the two most vocal critics of Beijing's territorial claims.
"In recent months, China has undertaken destabilising, unilateral actions asserting its claims in the South China Sea," the US Secretary of Defense told the annual Shangri-La Dialogue.
In opening the forum, Japanese Prime Minister Shinzo Abe urged countries to respect the rule of law, in apparent reference to perceived Chinese aggression in the South and East China seas.
"The US, Australia and Japan are very concerned that unilateral action is destabilising the region of the South China Sea particularly, and the East China Sea," Johnston said.
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Asked whether he supported Hagel's comments, the Australian minister said, "I do to the extent that it is destabilisation.. In a previously very successful region that has been able to deliver enormous amounts of prosperity to countries in the Asia-Pacific.
"This instability is unwarranted and quite damaging to the future economic prospects. So I do share Secretary Hagel's concerns."
China has denounced Hagel's "provocative" comments along with those of Abe.