The United States is weighing sending warships and surveillance aircraft within 12 nautical miles -- the normal territorial zone around natural land -- of artificial islands that Beijing is building in the South China Sea.
Such a move could lead to a standoff on the high seas in an area home to vital global shipping lanes and believed to be rich in oil and gas deposits.
Beijing regards almost the whole of the South China Sea as its own and after talks in the Chinese capital foreign minister Wang Yi said: "The determination of the Chinese side to safeguard our own sovereignty and territorial integrity is as firm as a rock and it is unshakeable."
Kerry was less assertive in public, saying Washington was "concerned about the pace and scope of China's land reclamation" and urged it "to take actions that will join with everyone to reduce tensions".
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The region needed "smart diplomacy", he said, rather than "outposts and military strips".
Senior State Department officials had said ahead of the meeting that Kerry would take a tough line and "leave his Chinese interlocutors in absolutely no doubt that the United States remains committed to maintain freedom of navigation".
The world's top two economies have significant commercial ties and Chinese President Xi Jinping is due to pay a state visit to the United States in September.
But China's ambitions for a place on the world's political stage commensurate with its economic role have seen it cross the United States in multiple fields, and the two have long-running disputes over issues ranging from trade to cyberspying to human rights.
At the same time the United States is China's second-biggest trading partner after the European Union, with two-way commerce worth USD 555 billion last year, according to Chinese figures.
Kerry was due to meet senior political and military leaders later.