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Acting U.S. Secretary of Defense Patrick Shanahan (left) meets with China's Minister of National Defense Wei Fenghe during a meeting on the sidelines of the 18th International Institute for Strategic Studies (IISS) Shangri-la Dialogue, an annual defense and security forum in Asia, in Singapore, on May 31, 2019.

The Associated Press

U.S. Acting Defence Secretary Patrick Shanahan on Saturday denounced China’s efforts to steal technology from other nations and militarize man-made outposts in the South China Sea as a “toolkit of coercion,” saying Beijing’s bad behaviour must end.

In his first major speech on the international stage, Shanahan mixed sharp criticism of China and warnings of North Korea’s “extraordinary” threat with vows that the U.S. will remain strongly committed to the Indo-Pacific region and is ready to invest billions of dollars in securing its stability.

While he didn’t specifically name China in early parts of his speech, he made clear who his target was, making pointed references to Beijing’s campaign to put advanced weapons systems on disputed islands in the region.

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“If these trends in these behaviours continue, artificial features in the global commons could become tollbooths. Sovereignty could become the purview of the powerful,” Shanahan said.

His remarks underscore America’s frayed relations with China, as the Trump administration wages a trade war with Beijing, imposes sanctions on Chinese tech giant Huawei and approves a weapons sale to Taiwan, the self-ruled island the Communist mainland claims as its own territory. And they reflect America’s new national defence strategy that declared great power competition with China and Russia as top priorities.

Shanahan’s speech on Saturday is also arguably an audition to both the world and U.S. top leaders in Congress, as his nomination for permanent secretary has still not been sent to Capitol Hill by President Donald Trump.

And listening closely in the audience were nervous allies and partners in the region who are worried about the economic impact of the U.S.-China trade dispute and the political blowback of America’s complaints about Beijing’s rapid progress in hypersonic weapons, nuclear technology and space launches.

Shanahan told reporters Friday that he would use his speech to the Shangri-La Dialogue conference to criticize Beijing’s use of coercion to advance its interests. And after his remarks, during questions from the audience, he suggested that his speech was more directly critical than those of other U.S. defence secretaries in the past.

“I won’t apologize for the way I framed some of my remarks, but we’re not going to ignore Chinese behaviour,” Shanahan said. “I think in the past people have kind of tiptoed around that. It’s not about being confrontational, it’s about being open and having a dialogue.”

He added that the U.S. is willing to co-operate with China and welcomes competition, but said behaviour that erodes other nations’ sovereignty and sows distrust of China’s intentions must end.

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“Competition does not mean conflict,” he said. “Competition is not to be feared. We should welcome it, provided that everyone plays by internationally established rules.”

He also rejected suggestions that the U.S. is in a “faceoff” or trade war with China and said economic negotiations with Beijing are ongoing and the Pentagon is building relations with the Chinese military.

But he went on to restate America’s distrust of Huawei, the world’s No. 1 network equipment provider and second-largest smartphone maker. The U.S. claims Huawei is legally beholden to China’s ruling Communists, which could use the company’s products, including its next-generation wireless network known as 5G, for cyberespionage.

Shanahan said Huawei is “too close to the government” of China, which has laws requiring data be shared.

“That’s too much risk for the department,” said Shanahan. “You can’t trust that those networks are going to be protected.

China on Friday warned that it was drawing up a list of “unreliable” foreign companies, organizations and individuals for targeting in what could signal retaliation for U.S. sanctions on Huawei.

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Much of Shanahan’s speech centred on America’s work with partners across the region.

“The Indo-Pacific is our priority theatre,” he said. “We are where we belong. We are investing in the region. We are investing in you, and with you.”

But he also called on the Pacific nations to invest in their own futures.

On North Korea, Shanahan said the U.S. is focused on negotiations to achieve full denuclearization of the Korean Peninsula, adding that the North “has neared a point where it could credibly strike regional allies, U.S. territory and our forward-deployed forces.”

He credited China for its co-operation on enforcing UN sanctions against Pyongyang.

In a departure from past conferences, however, Shanahan faced little backlash from the Chinese leaders in the audience during the question-and-answer session.

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On Friday, Chinese defence ministry spokesman Wu Qian was both conciliatory and challenging.

Speaking to reporters after Chinese Defence Minister Wei Fenghe met with Shanahan, Wu noted that the U.S. has recently “had a series of negative words and deeds” on Taiwan issues.

“On the issue of safeguarding national sovereignty and territorial integrity, the U.S. should not underestimate the determination of the Chinese military, will or ability,” he said.

But he also said Shanahan and Wei found room for agreement on the need for denuclearization of the Korean Peninsula and efforts to improve communication between the U.S. and China.

Shanahan told reporters Friday that the U.S. needs to do a better job of describing its level of commitment to the region, including military exercises, training and other activities.

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