China must be more transparent about its military intentions, top US general Peter Pace has said.
Taiwan was also discussed by Gen Pace and Chinese officials
He was speaking after holding talks in Beijing with his Chinese military counterparts.
Gen Pace said China's firing of a missile to destroy a satellite in January sent a confusing message about its military ambitions.
The two sides have discussed setting up a hotline between the two militaries to prevent future misunderstandings.
Gen Pace, chairman of the US Joint Chiefs of Staff, described his talks with his Chinese counterpart Liang Guanglie, Defence Minister Cao Gangchuan and other military officials as good, open and candid.
He said that though both countries have "enormous military capacity... neither country has the intent to go to war with the other".
China alarmed Washington and other governments when it fired a ground-based medium-range ballistic missile to destroy a weather satellite in January.
It became only the third country - and the first since the 1980s - to shoot something down from space.
Taiwan described it as an aggressive act, and other countries expressed concern that it might trigger a possible arms race.
Gen Pace told a news conference in Beijing that he had raised the test in his meeting with Chinese officials.
"I used the example of the anti-satellite test as how sometimes the international community can be confused, because it was a surprise, and it wasn't clear what their intent was," he said.
"You don't have to agree or disagree with any particular country's objective," he continued, "but it's very helpful to understand what those objectives are and why they're going in that direction."
He said he urged Beijing to be more open about its military budget.
The sensitive issue of Taiwan was also raised.
China sees the island as a breakaway province that must be reunited with the mainland, but the US has pledged to defend Taiwan if China invades.
Gen Pace stressed that no-one wanted to see the tensions escalate into violence.
"I believe that there are good-faith efforts amongst all the leadership to prevent that, and that's what we can focus on - not how to fight each other, but how to prevent military action," he said.
He said he and Liang Guanglie had discussed setting up a hotline between the two militaries.
"The Chinese military understands as well as I do that the opportunity to pick up the phone and talk to somebody quickly is a very important part of the relations between two countries," he said.
Greater military cooperation and possible officer exchanges were also discussed.