In a meeting with his US counterpart yesterday, Defence Minister General Liang Guanglie voiced "strong opposition" to Washington's claim that disputed East China Sea islands fall under its security pact with Tokyo.
Liang also warned US Defence Secretary Leon Panetta - in China for the first time since assuming his post last year - that Beijing was ready to respond militarily to assert its sovereignty over the Diaoyus, which Japan controls and calls the Senkakus.
He called on Washington to "concretely" demonstrate it would not take sides in the spat over the five uninhabited islands, which sit near potential supplies of oil and natural gas.
"We reserve the right to take further action," Liang said after the talks. "Of course, that being said, we still hope for a peaceful and negotiated solution."
Tensions remained high yesterday, as Tokyo reported 10 Chinese surveillance ships and a fisheries patrol boat in waters near the islands. Two Japanese activists landed on one island amid fresh protests in Chinese cities to mark the anniversary of the 1931 Mukden Incident.
Thousands gathered outside the Japanese embassy in Beijing. Heavier security was visible in some cities, such as Shenzhen, in what appeared to be a greater effort to keep a lid on protests.
Washington's claim that the islands fall under its post-war defence treaty with Tokyo has irked Beijing.
"I want to make it clear that the Diaoyu Islands are China's inherent territory, which is evidenced by history and law," Liang said.
For his part, Panetta called for calm on both sides of the East China Sea. He said Washington wanted expanded ties with the PLA, and invited China to take part in the 2014 Rimpac international military exercise in Hawaii.
"The key is to have senior-level actions like we are engaging in, that reduce the potential for miscalculation, that foster greater understanding and that expand trust between our two countries," Panetta said.
Panetta will next meet Vice-President Xi Jinping.
Additional reporting by Reuters