Clinton said ahead of a meeting with Chinese Foreign Minister Yang Jiechi on the Indonesian island of Bali that Washington welcomed a deal between China and Southeast Asia on guidelines meant to reduce tension in the strategic sea.
"I want to commend China and ASEAN for working so closely together to include implementation guidelines for the declaration of conduct in the South China Sea," Clinton told reporters.
But during their meeting Yang reminded Clinton that China's territorial claims in the South China Sea or anywhere else were none of Washington's business.
"The Chinese side raised its own concerns, which is that it is important to respect the sovereignty and territorial integrity of China," Chinese delegation spokesman Liu Weiming told reporters, summarising Yang's comments to Clinton.
Liu said Yang and Clinton specifically discussed the South China Sea, a potentially resource-rich waterway stretching from China's southern coast deep into Southeast Asia.
But in a note of conciliation, he said the United States seemed to understand the "sensitivity of these issues" and the two sides had "agreed to further promote dialogue and mutual understanding".
The bilateral talks came a day ahead of the ASEAN Regional Forum, Asia's main security dialogue involving Southeast Asian nations as well as China, Japan, the United States, Russia and the Koreas.
Nuclear envoys from North and South Korea held talks today on the sidelines of the Bali meetings for the first time since six-party nuclear negotiations collapsed in December 2008.
The meeting between South Korea's Wi Sung-Lac and North Korea's Ri Yong-Ho was the first between the states' chief nuclear envoys in more than two years, and was described by a US official in Bali as "quite important".
The United States says the stalled six-party talks on North Korea's nuclear disarmament cannot resume unless they are preceeded by a meaningful dialogue between Pyongyang and Seoul.
North Korea pulled out of the six-nation talks in 2009, accusing the United States of hostility. Since then it has tested a nuclear bomb, fired on a civilian island in the South and allegedly torpedoed a South Korean warship