Xi Jinping and Mike Pence engage in verbal trade war

Chinese President Xi Jinping and U.S. Vice President Mike Pence on Saturday traded barbs in speeches at a summit of world leaders, with Xi criticizing U.S. protectionism and Pence saying the U.S. will not back down on tariffs while Beijing engages in "forced technology transfers" and "intellectual property theft."

"Global growth is shadowed by protectionism and unilateralism," Xi said at the Asia-Pacific Economic Cooperation CEO Summit, aboard a cruise ship in the harbor of Papua New Guinea's capital. "History has shown that confrontation, whether in the form of a cold war, hot war, or trade war will produce no winners."

He added that "there are no issues that countries cannot resolve through consultation" as long as they understand each other.

His words appeared to be a possible olive branch ahead of his talks later this month with U.S. President Donald Trump on the sidelines of another summit, in Argentina.

Then Pence took to the podium and said: "As we know, China has engaged in quotas, forced technology transfers, intellectual property theft and industrial subsidies on an unprecedented scale."

"The United States will not change its course until China changes its ways."

The issue is expected to take center stage on Sunday when the leaders of the 21 APEC nations meet. The participants are expected to announce a joint statement promoting free trade.

According to a working draft of the statement from Thursday, the U.S. is pushing to include the need to reform the World Trade Organization, and the "removal of all trade-distorting practices," such as forced technology transfers and government subsidies for the industry.

On Friday, Trump told reporters he received a "large" list of 142 items from Beijing in response to American demands for reform. He said the list is "not acceptable to me yet" but also noted that the U.S. "may not have to" impose further tariffs on Chinese imports. Trump has previously threatened to raise the tariff rate on $200 billion worth of Chinese imports from 10% to 25% in January 2019, and impose additional tariffs on a further $267 billion worth of Chinese imports.

"The cornerstone of the WTO is not to be challenged," Xi hit back on Saturday, warning that doing so would shake the "very foundation of a multilateral trading system."

Despite his strong words, Pence did not rule out those direct talks between Xi and Trump on the sidelines of the Group of 20 summit.

"The United States of America seeks a better relationship with China, based on fairness, reciprocity, and respect for sovereignty," the vice president said. "As the president prepares to meet with President Xi at the G-20 summit ... we believe progress could be made."