"Absolutely it concerns us" said R. Clarke Cooper, assistant secretary for political-military affairs at the U.S. Department of State.
"It was completely inappropriate of China to take such an aggressive act," Cooper told CNBC's Nancy Hungerford in Singapore.
China claims self-ruled Taiwan as Chinese territory that must one day be reunited with the mainland and Beijing has never renounced the use of force to take Taiwan by force.
Tensions between China and Taiwan have risen since Taiwanese President Tsai Ing-wen from the independence-leaning Democratic Progressive Party took office in 2016. She won re-election in January on a platform of defending Taiwanese sovereignty.
Recently, tensions spiked further as Taipei accused Beijing of blocking Taiwan's access to the World Health Organization amid the outbreak of the COVID-19. This particular strain of coronavirus is believed to have originated from the Chinese city of Wuhan, but has also hit Taiwan.
The U.S. has no formal diplomatic ties with Taiwan but is its main arms supplier.
"All states, including China, are part of the broader constellation in the Indo-Pacific region," said Cooper. "What that means is that there should be responsible behavior to make sure that the region is free and open — not just for navigation but also for trade and for relationships," he said.
"Such coercive, aggressive behavior is counter to having a free and open Indo-Pacific region," he said.
China's People's Liberation Army said on Monday that the drills were aimed at improving combat capabilities.
The U.S. is bound by the Taiwan Relations Act to aid the island's self-defense.
"They need to be able to defend their homeland, and our relationship with Taiwan through the Taiwan Relations Act, we certainly are going do anything we can to bolster their self-defense needs," said Cooper.
Cooper said that China's military moves toward Taiwan this week may be broader reflection of China's stance toward the entire region.
"That aggressive act is not just a reflection on China's relationship with Taiwan, it certainly is reflective about how China may be looking at the entire region in total," said Cooper.
Cooper also warned China against exploiting the Singapore Airshow, which started on Tuesday.
"We are very realistic to appreciate that in the entire Indo-Pacific region, China's a state here and they are a trading partner for many of us," Cooper said. "But at the same time, they need to be a responsible state and not want to coerce or to exploit partnerships," he said.
China denies such accusations, most recently on Tuesday after the U.S. Justice Department said it has indicted four members of China's military for a 2017 cyber-attack against consumer credit reporting agency Equifax.
Cooper said there has been "plenty of evidence where China has actually used opportunities like an airshow — not just Singapore — to collect and exploit — to the point of actually stealing unique technologies for their benefit."