A United States official told reporters that Pence was "currently having a "pull-aside" with the Taiwanese head of delegation to APEC Morris Chang". Protectionism and unilateralism were overshadowing global growth, and a policy of erecting economic barriers was doomed to fail, Xi said.
"The president, the administration and the country are lucky that we have someone as talented, committed, loyal and effective as Mike Pence as vice president", the former White House press secretary said. The Chinese regime has responded with import tariffs on US goods.
Addressing APEC shortly after Xi spoke, Pence criticized China for "opaque" and debt-ridden infrastructure loans, forced technology transfers and intellectual property theft and militarization of the South China Sea.
The US has already imposed tariffs on US$250 billion of goods and Trump has threatened to extend the tariffs to all Chinese imports - a warning that Pence reiterated on Saturday.
The world's top two economies have been embroiled in a spiraling trade war, imposing tit-for-tat tariffs on each other's goods in a confrontation experts warn could torpedo the global economy.
Papua New Guinea rolled out the red carpet for the Chinese leader, with dozens of people from various tribes serenading him sporting parrot feathers, possum pelts and seashell necklaces.
Saturday's summit of CEOs is the precursor to the official leaders' meeting, which will take place on Sunday.
In a rebuke to China, Pence met with the representative from Taiwan, a self-governing island which China considers to be part of its own territory. The nation's growing influence in Papua New Guinea was on display in Port Moresby: dozens of red Chinese flags line a new six-lane highway built by China, while a giant billboard shows Xi shaking hands with Prime Minister Peter O'Neill. The vice president said the doesn't "drown our partners in a sea of debt" or "offer a constricting belt or a one-way road".
Duterte, however, said he would try his best to lead the talks between the Association of Southeast Asian Nations (Asean) and China for a legally binding code of conduct in the South China Sea.
Pence, meanwhile, warned those at the summit not to accept foreign debt that might "compromise your sovereignty", or "coerce, corrupt or compromise your independence", adding the United States had a better offer.
In effect, the USA is pressuring Asean against acquiescing to Beijing through a compromised code of conduct agreement that bolsters China's maritime power while acknowledging its wide-reaching claims to the sea. "The United States deals openly and fairly".
Xi defended the Belt and Road Initiative, saying it "is not a trap as some people have labelled it".