The annual State Department report on human rights said that China stepped up repression last year in Tibet and Xinjiang, restricting dissent and religious freedom.
"The government's human rights record remained poor and worsened in some areas," the report said.
In a striking departure under President Barack Obama, Mrs Clinton however said that the US would also try to uphold human rights on its own territory.
"Not only will we seek to live up to our ideals on American soil, we will pursue greater respect for human rights as we engage other nations and people around the world," Mrs Clinton said in preface to the report.
Since taking office President Barack Obama has pledged to close the Guantanamo detention centre in a year and vowed not to torture prisoners.
Mrs Clinton has however made it clear that she does not plan to badger the Chinese on human rights when the two countries have so much at stake trying to revive the world economy, a stance that drew howls of protest from human rights groups.
The State Department's annual report has long been an irritant for China, which has hit back with its own account of rights abuses in the United States.
The report did not hold back on China, saying that its record had "deteriorated severely" in Tibet.
China last year cracked down on major protests in Lhasa in March, the anniversary of the 1959 uprising in which Tibet's spiritual leader the Dalai Lama went into exile.
In addition to the killings during the crackdown, the State Department said China had exposed those detained after the unrest to severe beatings and lengthy deprivation of food, water and sleep.