"There is every evidence, every day, that there has been an increase of militarisation of one kind or another. It's of a serious concern," Kerry told reporters.
Fox News first reported missile launchers and a radar system had arrived on Woody Island, part of the Paracels chain, in the past week. Taiwan's defence ministry later confirmed the facility's existence.
"We have said repeatedly with respect to China that the standard that should be applied to all countries with respect to the South China Sea is no militarisation," Kerry said.
"We had these conversations with the Chinese and I'm confident that over the next days, we will have further very serious conversations on this," Kerry said.
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He said he hoped that Beijing would work to resolve the maritime disputes "not through unilateral action, not through force, not through militarization but through diplomacy and by working with other countries and claimants."
Yesterday, Obama called for "tangible steps" to lower tensions in the South China Sea.