US National Security Advisor Susan Rice began her visit here by holding talks with her counterpart Yang Jiechi after China's outright rejection of the tribunal, questioning its legality.
Welcoming Rice, Yang said ahead of their talks that the US and China have been cooperating more closely on global issues such as nuclear nonproliferation and the Ebola epidemic and both sides should carefully manage their differences.
The Permanent Court of Arbitration in The Hague on July 12 noted there was no legal basis for Beijing's claim to nearly all of the waterway. While quashing China's claims, it also upheld the Philippines' rights over the area.
China claims sovereignty over almost all of the South China Sea. The Philippines, Vietnam, Malaysia, Brunei and Taiwan seriously differ with Beijing's claims and accuse China of illegally reclaiming land in contested areas to create artificial islands with facilities that could potentially be for military use.
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Earlier the commander of the People's Liberation Army Navy Wu Shengli told US counterpart Admiral John Richardson during their meeting here that "we will never stop our construction on the Nansha (Spratly) Islands halfway... The Nansha Islands are China's inherent territory, and our necessary construction on the islands is reasonable, justified and lawful".
She is also expected to call on top Chinese leadership.
The South China Sea, rich in natural resources, is also a major shipping lane. Over half of the world's commercial shipping passes through the Indo-Pacific waterways - including one-thirds of the world's liquefied natural gas.