Chinese State Councilor Yang Jiechi replied by saying that Western nations don't represent global public opinion and called the USA the "champion" of cyber-attacks.
The meetings in Anchorage were a new test in increasingly troubled relations between the two countries, which are at odds over a range of issues from trade to human rights in Tibet, Hong Kong and China's western Xinjiang region, as well as about Taiwan, China's assertiveness in the South China Sea and the coronavirus pandemic.
At the Alaska meeting, Blinken affirmed US solidarity with its allies in pushing back against China's increasing efforts to spread its authoritarian mode of government through political and economic pressure.
Mr Blinken had pledged to raise the issue, his State Department having upheld a Trump administration determination that Beijing was perpetrating genocide in Xinjiang, something China vehemently denies.
Blinken said the USA will discuss "deep concerns with actions by China, including Xinjiang", "genocide" against Uyghur Muslims including dialogue on "Hong Kong, Taiwan, cyberattacks on the United States, economic coercion toward our allies".
Mr Sullivan hit back, saying Washington did not seek a conflict with China, but added: "We will always stand up for our principles for our people, and for our friends".
"United States side was not even qualified to say such things, even 20 years or 30 years back, because this is not the way to deal with the Chinese people".
Mr Yang responded angrily by demanding the U.S. stop pushing its own version of democracy at a time when the United States itself has been roiled by domestic discontent.
"Each of these actions threaten the rules-based order that maintains global stability".
Chinese Communist Party foreign affairs chief Yang Jiechi.
He went on to say: "Director, state counselor, given your extended remarks, permit me please to add just a few of my own before we get down to work".
"Many people within the United States actually have little confidence in the democracy of the United States".
Blinken said Washington hoped to see China use its influence with North Korea to persuade it to give up its nuclear weapons.
"'There is no way to strangle China", he said.
Apparently taken aback by Mr Yang's remarks, Mr Blinken held journalists in the room so he could respond.
China is also pushing back against what it sees as USA naval encroachment in the South China Sea, which Beijing considers Chinese territory.
Tony Blinken has been Secretary of State for two months.
"I'm hearing deep satisfaction that the United States is back, that we're reengaged", Mr Blinken retorted.
According toCNN, the Chinese had accused the other side of being "condescending", while a USA official said the representatives from Beijing seemed "intent on grandstanding".
"America's approach will be undergirded by confidence in our dealing with Beijing - which we are doing from a position of strength - even as we have the humility to know that we are a country eternally striving to become a more flawless union", it said.
Before taking office, US President Joe Biden had been attacked by Republicans who feared his administration would take too soft an approach with China.
During the acrimonious exchange, both the Chinese and USA teams repeatedly called reporters into the room to add remarks, according to reporters present during the meeting.
Mr Yang questioned Mr Blinken on Thursday about whether the sanctions were announced ahead of the meeting on goal.
China firmly opposes USA interference in what it regards as its internal affairs, issues such as Taiwan, Hong Kong and Xinjiang.
On the eve of the talks, Beijing had presaged what would be a contentious meeting, with its ambassador to Washington saying the United States was full of illusions if it thinks China will compromise.