Speaking at a Singapore security forum attended by senior Chinese military officials, the Pentagon chief pointedly blamed the Chinese government and armed forces for repeated intrusions into sensitive US information systems.
"The United States has expressed our concerns about the growing threat of cyber intrusions, some of which appear to be tied to the Chinese government and military," he told an annual conference known as the Shangri-La Dialogue.
Hagel pressed Beijing to adhere to "international norms of responsible behaviour in cyberspace", while acknowledging that the establishment of a joint cyber security working group was a positive step in fostering US-China dialogue on such issues.
The Singapore forum came ahead of the June 7-8 meeting between US President Barack Obama and his Chinese counterpart Xi Jinping in California, the two leaders' first meeting since Xi took office in March.
China's delegation to the Singapore meeting was led by Lieutenant General Qi Jianguo, a deputy chief of the general staff of the People's Liberation Army.
Hagel's remarks came just days after China's defence ministry dismissed a Pentagon report released in May accusing Chinese hackers of accessing US weapons designs.
"First they underestimate the security defence capabilities of the Pentagon and second
The report was the most explicit statement yet from Washington that it believes China's cyber spying is focused on the US government and corporations.
In a question-and-answer session after Hagel's speech, a member of the delegation, Major General Yao Yunzhu, said Beijing was "not convinced" by US assurances that Washington's strategic rebalancing strategy in Asia was not aimed at containing China.
"The United States has been a Pacific power for 200 years. This is not new. We have an interest here too, just as China and Russia have interests all over the world," Hagel said in his response.
In his speech, Hagel insisted that the military "rebalance" towards Asia-Pacific -- a policy announced at the same forum last year by his predecessor Leon Panetta -- will not be affected by cuts in US military spending.
He said the US Air Force had allocated 60 percent of its overseas-based forces to the region including tactical aircraft and bombers.
Hagel added that 2,500 US Marines will eventually be deployed to Australia each year as part of the effort.
Last year, Washington announced a major naval deployment to Asia, including the rotation of up to four Littoral Combat Ships -- newly developed vessels designed for coastal operations -- to Singapore, a staunch US supporter.
Hagel also said Washington remained concerned "over the potential for dangerous miscalculations or crises" arising from competing territorial claims in Asia.
"The United States stands firmly against any coercive attempts to alter the status quo," he said, urging claimant nations to settle disputes peacefully and in a manner that adheres to international law.
Smaller countries in the region have expressed concerns over what they said are aggressive Chinese actions to enforce its claims over almost all of the South China Sea, including waters and territories near to their shores.