Defence Minister Gerry Brownlee has spoken of tension caused by China's reclamation of land in the South China Sea.

In a wide-ranging speech to the NZ Institute of International Affairs today, Brownlee directly addressed the dispute, with his some of his comments about China's actions.

"While we take no position on the various claims in the South China Sea, New Zealand opposes actions that undermine peace and erode trust," Brownlee said.

"We support the right of states to access dispute settlement mechanisms in managing complex issues. We also support their right to have the outcomes of such processes respected."

In mid-July, an international tribunal backed the Philippines in a case on disputed waters, ruling that rocky outcrops claimed by China could not be used as the basis of territorial claims.

China has flatly rejected that judgement.

Countries including Brunei, Malaysia, the Philippines, Taiwan and Vietnam have overlapping claims to the resource-rich territory.

China has been criticised by the United States and Australia for building up its military capacity in the disputed region.

Brownlee last year met with military leaders during a trip to China, including General Fan Changlong, vice-chairman of the Central Military Commission.

"In terms of his position in the Chinese hierarchy he's similarly placed to our [Chief of Defence Force], Lieutenant General Tim Keating, but with a standing army of 1,987,000 more troops than Tim, and another 4 million reserves," Brownlee said.

"We also discussed the - at the time - reclamation of 2500 hectares in the South China Sea in less than 18 months.

"It would be a considerably greater area now, and General Fan accepted the scale of all this was bound to cause some excitement. Another word for it is tension, which these developments continue to cause."

In July, China delivered a blunt message to Australia, saying it was shocked by remarks by Foreign Minister Julie Bishop that China should abide by the UN ruling and that Australia would continue freedom of navigation exercises.

The dispute has also caused tension with the US. China has objected to the US flying military aircraft over the area while the US urged other countries to do the same to assert the right to use it as international airspace.

In his speech, Brownlee said at the heart of the dispute was "two big powers with big responsibilities".

"This issue will continue to test the international legal system. Continued China-United States engagement and cooperation is indispensable to security and prosperity in the Asia-Pacific region and beyond.

"In recent times both Commander Pacific Command and the US Chief of Navy equivalent have visited China. New Zealand is acutely aware of the dynamic between China and the United States, but we do not see our defence relationships as mutually exclusive."