America and Japan have reacted angrily after China issued a map of an air defence zone that includes a chain of disputed islands.
The United States expressed concern about China's "unilateral action" and Japan said the East China Sea Air Defence Identification Zone, which came into effect yesterday, was "totally unacceptable".
Beijing has also issued a set of rules for the zone, saying all aircraft must notify Chinese authorities and are subject to emergency military measures if they do not identify themselves or obey orders. It said it would "identify, monitor, control and react" to any air threats or unidentified flying objects coming from the sea.
In Tokyo, Junichi Ihara, head of the Foreign Ministry's Asian and Oceanian Affairs Bureau, protested by phone to China's acting ambassador to Japan, Han Zhiqiang, saying the zone was "totally unacceptable".
Mr Ihara also criticised China for "one-sidedly" setting up the zone and escalating bilateral tensions over the islands.
Both Beijing and Tokyo claim the islets, called Diaoyu in Chinese and Senkaku in Japanese. Protests erupted throughout China last year over the Japanese government's purchase of the islands from private ownership.
Rising economic and military power China has become more assertive over its maritime claims and has been in disputes with several neighbouring countries over islands in the East and South China seas.
"By establishing the air-defence zone Beijing has ... potentially escalated the danger of accidental collisions between the Chinese military and the US and Japanese counterparts," said Tomohiko Taniguchi, attatched to the office of prime minister Shinzo Abe.
"It poses a serious challenge against freedom of movement in the sky and in the seas."
China said the zone was in line with the practice of other nations that have similar zones to protect their coasts. The new zone overlaps with Japan's existing zone, which also includes the disputed islands.
"This is a necessary measure taken by China in exercising its self-defence right," Defense Ministry spokesman Yang Yujun said on the ministry's website. "It is not directed against any specific country or target. It does not affect the freedom of overflight in the related airspace."
South Korea and Taiwan also claim the barren, uninhabited islands in the East China Sea.
"Escalatory action will only increase tensions in the region and create risks of an incident."
Mr Kerry said overflight and other internationally lawful uses of sea and airspace were essential to prosperity and security in the Pacific.
The US did not support efforts by any state to apply procedures of an air defence identification zone to foreign aircraft not intending to enter its national airspace, he said.
"We urge China not to implement its threat to take action against aircraft that do not identify themselves or obey orders from Beijing," he said.
Mr Hagel said China's announcement "will not in any way change how the United States conducts military operations in the region".
He said the United States was relaying its concerns to China "through diplomatic and military channels" and was consulting closely with Japan and other US allies in the region.
He reaffirmed the long-standing US policy of the US Japan Mutual Defence Treaty applied to the Senkaku Islands. In the case of an armed attack against Japanese territory, both the US and Japan "would act to meet the common danger" in accordance with "constitutional provisions and processes".