Washington had asked China to be more open about its military actions, Rice said, "and then we get a surprise like this test".
"It's a problem," she said.
China has indicated willingness to work with other countries on an agreement to prevent an arms race in space.
But several US legislators have called the anti-satellite test a provocative step towards the militarisation of space.
The destruction of an old Chinese weather satellite by a warhead launched from a ballistic missile makes China only the third country after Russia and the US to shoot down an orbiting satellite.
In her testimony Rice said the United States had a "good working relationship" with China on many issues, but that relationship had a "dual character".
She said that while there was increasing co-operation in international crises such as the North Korean nuclear standoff, the US also had "legitimate concerns" about China's military activities.
She added that the US was also concerned about China's export of weapons, and would continue to impose sanctions on companies accused of proliferation.