US Vice-President Dick Cheney has expressed concern over China's military policies, saying they were at odds with the country's stated peaceful aims.
Mr Cheney said Australia's stance on terrorism had earned respect
On a visit to Australia, he praised China's role in a nuclear deal with North Korea but criticised its military build-up and anti-satellite tests.
Mr Cheney also thanked Australia for its support for US operations in Iraq.
Australian PM John Howard is facing opposition on the issue, and there have been protests over Mr Cheney's visit.
The US vice-president commended Chinese leaders for their role in six-party talks with North Korea, which resulted in a landmark agreement on 13 February committing Pyongyang to shut down key nuclear facilities.
"The Chinese understand that a nuclear North Korea would be a threat to their own security," he said.
However, he added that "other actions by the Chinese government send a different message".
He said China's destruction of an inactive weather satellite last month, as well as its "continued fast-paced military build-up are less constructive, and are not consistent with China's stated goal of a peaceful rise".
The BBC's Nick Bryant, in Sydney, says the comments were significant because Mr Cheney often delivers the authentic voice of the White House.
Beijing has said the anti-satellite tests was for scientific purposes only, but many observers saw it as a demonstration of China's growing military power.
Mr Cheney also questioned whether North Korea would abide by its commitments in the nuclear deal, saying the US was going "into this deal with our eyes open".
He arrived in Australia on Thursday after visiting Japan - another key US ally.
China says it spent $36bn on its armed forces in 2006
Correspondents say he has sought to assure both countries that Washington remains committed to the Asia-Pacific region, despite problems in Iraq.
During his speech in Sydney, Mr Cheney praised Mr Howard, who he said had "never wavered in the war on terror".
The vice-president said Australia had won global recognition for its efforts to fight terrorism.
"The United States appreciates it, and the whole world respects you for it," he added.
Mr Cheney warned of the dangers of an early withdrawal of coalition troops from Iraq.
"If our coalition withdrew before Iraqis could defend themselves, radical factions would battle for dominance of that country," he said.
He also expressed concern that failure in Iraq would lead to more violence in the Middle East: "Having tasted victory in Iraq, jihadists would look for new missions".
Australia currently has about 1,450 military personnel based in Iraq or involved in Iraq-related operations.
Mr Howard faces an election battle this year and is under strong domestic pressure to announce a withdrawal of Australian forces.
There have been scuffles between police and anti-war protesters
An opinion poll earlier this week suggested that more than two-thirds of Australians want Mr Howard to announce a date for withdrawing troops or to order an immediate pull out.
But Mr Howard has instead offered to send an additional 70 military advisers to help train the Iraqi army.
Protesters gathered in Sydney to rally against Mr Cheney's visit.
Three people were arrested during scuffles on Friday, and at least seven were arrested after similar scenes on Thursday.
Mr Cheney is scheduled to hold talks with Mr Howard on Saturday.