Acting US Secretary of Defense Patrick Shanahan speaks at the annual Shangri-La Dialogue in Singapore on June 1, 2019. (VCG)

China and the United States can still have a cooperative relationship and competition does not mean conflict, acting US Defense Secretary Patrick Shanahan said on Saturday in Singapore.

In a keynote speech at the annual Shangri-La Dialogue, Shanahan said China has stood with the US as "cooperative partner in pursuit of shared goals" in many historical instances such as battling fascism and imperialism.

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We cooperate with China where we have alignment of interests, from military-to-military dialogue to developing risks reduction measures. We compete with China where we must, but competition does not mean conflict

Patrick Shanahan, Acting US Secretary of Defense

"I say now that China can still have a cooperative relationship with the United States," he said, adding that China has benefited a lot from regional and global order and lifted hundreds of millions from poverty to prosperity.

"We cooperate with China where we have alignment of interests, from military-to-military dialogue to developing risks reduction measures," he said. "We compete with China where we must, but competition does not mean conflict."

Shanahan also noted some "destabilizing activities" in Asia and emphasized US' military presence and commitment in the region. He called on Asian allies of the US to increase their security spending.

During the Q&A section, Shanahan referenced several times the constructive meeting he had with his Chinese counterpart General Wei Fenghe on Friday evening. "It is not about being confrontational [with Chinese military], it is about being open and having a dialogue," he said.

"We need to talk about the things that can potentially create problems in the region," he said. "We are going to find areas where we have disagreements [with China], and we are going to work constructively on them. I am confident that we will solve problems."

Shanahan said his experience as senior executive of Boeing can carry over to help maintain China-US relation. "Because China was our biggest customer and biggest competitor, so you have to understand how to live in that duality."

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"We can develop a constructive relationship, and we can understand how we can compete in a constructive way," he said, adding at the end of the day, it is about growing prosperity of the region, and the security that underpins it.

"It is not about conflict, it is not about building walls," he said. "I am confident opportunity exists, but it has to be grounded in norms and rules and communication that we put in place."