US Vice President Mike Pence called many of China's global infrastructure projects as low quality while Chinese President Xi Jinping warned against protectionism, saying countries are facing a choice of confrontation and cooperation.
Chinese President Xi Jinping and US Vice President Mike Pence traded barbs in speeches to a summit of world leaders Saturday, outlining competing visions for global leadership.
Pence said there would be no letup in President Donald Trump's policy of combating China's mercantilist trade policy and intellectual property theft that has erupted into a trade war between the two world powers this year.
"China has an honored place in our vision of a free and open Indo-Pacific, if it chooses to respect its neighbors’ sovereignty, embrace free, fair, and reciprocal trade, and uphold human rights and freedom."
He harshly criticized China's global infrastructure drive, calling many of the projects low quality and saddling developing countries with loans they can't afford.
Pence also announced the US would be involved in a plan by its ally Australia to jointly develop a naval base in Papua New Guinea, where the summit is being held. China has been intensely wooing Papua New Guinea with aid and loans for infrastructure.
Xi warns against protectionism
Xi, who spoke before Pence, said countries are facing a choice of cooperation or confrontation as protectionism and unilateralism spreads.
Xi expressed support for the global free trading system that has underpinned his country's rise to world's second-biggest economy after the US.
"Mankind has once again reached a crossroads," he said.
"Which direction should we choose? Cooperation or confrontation? Openess or closing doors. Win-win progress or a zero sum game?"
APEC nations divided over free trade
Fault lines were quick to emerge at the summit over the future of free trade with some calling for radical change while others argued for a return to the status quo on globalisation.
The Malaysian Prime Minister Mahathir Mohamad warned that globalisation was leaving some people behind and fuelling inequality.
"The benefits of free and fair trade and economic integration have been ruptured, exemplified by Brexit and trade wars between major economies," Mahathir said.
"The trade war between the US and China has amplified further the disruption to our trade and commerce."
Australian Prime Minister Scott Morrison followed by mounting a full-throated defence of free trade.
"Our efforts must be about persuading and convincing our peoples again about the domestic benefits," said Morrison.
He said over a billion people had been lifted out of extreme poverty since 1991 because of the jobs and more affordable consumer goods that free trade enables.
His speech was a clear reference to the escalating trade war between the United States and China, along with the general protectionism of US President Donald Trump.
"We are witnessing a rising tide of trade protectionism along with financial volatility in some emerging economies," said Morrison. "The test for us now is to stand up for the economic values we believe in and show how they work."
Leaders of Pacific Rim countries that make up 60 percent of the world economy are meeting in the capital of Papua New Guinea for an annual Asia-Pacific Economic Cooperation summit.
US-China trade war
China and the United States have been locked in an escalating trade war since Trump won election in 2016.
Trump has skipped the annual meeting of the 21-nation grouping.
China has also been at loggerheads with the United States over its territorial ambitions in the Pacific, encapsulated by Xi's Belt and Road Initiative.
Unveiled in 2013, the Belt and Road initiative aims to bolster a sprawling network of land and sea links with Southeast Asia, Central Asia, the Middle East, Europe and Africa.
China's efforts to win friends in the resource-rich Pacific have been watched warily by the traditionally influential powers in the region - Australia and the United States.