China's massive surveillance system, including its control over information on smartphones and the internet, has helped it to "close off" the country, she said.
"We told ourselves a happy-faced story that never fit with the facts, and now ... the United States cannot avoid facing a very different reality with China," Warren said.
Warren's visit to Northeast Asia follows the abrupt firing of Rex Tillerson as U.S. secretary of state and the Trump administration's continued failure to fill many crucial positions.
Tillerson lost the support of many of the State Department's 75,000 workers over his moves to cut the budget, leave key leadership positions vacant and downplay human rights and democracy promotion as diplomatic priorities.
Warren said "consistent efforts to take the legs out of our diplomatic corps" by understaffing the service stands to undermine America's foreign policy efforts.
"That's someone whose information, whose thoughts, whose analysis doesn't get put into the mix," she said.
Warren said that there could be no military solution to the dispute with North Korea and that she has been told that "it will take strong economic and diplomatic efforts" to reduce the threat posed by Pyongyang.
Warren didn't disclose details of her discussions with Beijing officials, including key economic adviser Liu He, but said "the Chinese have not deviated from their talking points."