"We have taken decisive action to address our imbalance with China", he said.
On Saturday, Pence warned that Trump could still put more tariffs on China.
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.
TOUCHDOWN President Duterte is welcomed at Jacksons International Airport in Port Moresby by Papua New Guinea officials led by Deputy Prime Minister and Minister for Treasury Charles Abel and Foreign Minister Rimbink Pato, as well as Philippine Ambassador Bienvenido Tejano (right).
In the absence of Trump and Russian President Vladimir Putin, the summit has been relatively low key and the focus has turned to the venue Port Moresby.
Protectionism and unilateralism were overshadowing global growth, and a policy of erecting economic barriers was doomed to fail, Xi said. Later, Pence told reporters he was "very hopeful" the USA and China could reach a deal, but "things have to change" for that to happen.
U.S. President Donald Trump, who is not attending the APEC meeting, is due to meet Chinese President Xi Jinping in Argentina.
He also took aim at China's territorial ambitions in the Pacific and, particularly, Mr. Xi's Belt and Road Initiative to expand land and sea links between Asia, Africa and Europe with billions of dollars in infrastructure investment.
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Can the USA and China resolve their differences?
Xi stoked Western concern when he held a private meeting with Pacific island leaders on Friday, where he pitched the Belt and Road initiative.
"History has shown that confrontation, whether in the form of a cold war, a hot war or a trade war, will produce no winners", he told leaders gathered in Papua New Guinea's capital for the summit.
There have been concerns that small countries that sign up for infrastructure projects will be left with debt burdens they can not service, something Pence highlighted. "That's why the strong partnership that we develop between our two countries is helping us develop and grow our economy".
The United States will join forces with Australia in the development of a new naval base to be built in Papua New Guinea, US Vice President Mike Pence has announced.
"Tit-for-tat protectionism and threats of trade wars are in no one's interests economically, and undermine the authority of the global and regional trading rules that benefit us all", Morrison said.
Mr Pence appeared to throw down the gauntlet to China on trade and security in the Pacific region.