Austin and Li Shangfu shook hands and briefly spoke for the first time at the opening dinner of the Shangri-La Dialogue defence summit in Singapore the night before, but the interaction fell short of the Pentagon's hopes for a more substantive exchange.
The US defence chief is on a tour of Asia that previously took him to Japan and will also include a visit to India -- part of a push by top American officials to shore up alliances and partnerships in the region to help counter Beijing.
"The United States believes that open lines of communication with the People's Republic of China are essential -- especially between our defense and military leaders," Austin said in remarks at the Shangri-La Dialogue.
"The more that we talk, the more that we can avoid the misunderstandings and miscalculations that could lead to crisis or conflict."
The United States had invited Li to meet on the sidelines of the summit, but Beijing declined, with a spokeswoman saying "the US knows clearly why there are currently difficulties in military communication".
Chinese Senior Colonel Zhao Xiaozhuo said Beijing also thinks that communication lines are essential, but added that "the problem is for the United States to stop provoking China's security".
Li was sanctioned by the US government in 2018 for buying Russian weapons, but the Pentagon says that does not prevent Austin from conducting official business with him.
Asked if the United States should lift sanctions on Li, Zhao told AFP: "Of course, it is one of the pre-conditions for substantial talks".
A senior US defence official said it was good for the two to speak, but Austin told the defence summit that "a cordial handshake over dinner is no substitute for a substantive engagement".
Austin said he was "deeply concerned that (China) has been unwilling to engage more seriously on better mechanisms for crisis management between our two militaries", expressing hope that would soon change.
He also took aim at Beijing for conducting "an alarming number of risky intercepts of US and allied aircraft flying lawfully in international airspace", including one last week.
- 'Preserving the status quo' -
In that incident, the US military said a Chinese fighter pilot had performed an "unnecessarily aggressive maneuver" near an American surveillance aircraft operating over the South China Sea.
Video footage released by the US military showed a Chinese fighter plane crossing in front of the American aircraft, which could be seen shaking from the resulting turbulence.
But China's military said the US plane "broke into" a military training area.
Tensions between Washington and Beijing have soared this year over issues including Taiwan and an alleged Chinese spy balloon that was shot down by a US warplane after traversing the country.
Another recent flashpoint has been high-end microchips, with Beijing saying in May that US semiconductor giant Micron had failed a national security review and would not be allowed to sell to operators of "critical information infrastructure".
The announcement came after Washington and its allies took measures in recent months that China claimed were designed to restrict its ability to purchase or manufacture cutting-edge chips and curb its rising global power.
In April, Beijing launched three days of military exercises around the democratic self-ruled island of Taiwan, simulating targeted strikes and a blockade.
China considers Taiwan a part of its territory to be taken one day, by force if necessary, and the island lives under the constant fear of invasion.
The Chinese exercises came in response to a meeting between Taiwanese President Tsai Ing-wen and US House Speaker Kevin McCarthy in California, which China's consulate in Los Angeles said undermined "the political foundation of China-US relations".
Austin said at the defence summit that the United States "remains deeply committed to preserving the status quo" in the Taiwan Strait and "will continue to categorically oppose unilateral changes to the status quo from either side".
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