Defense chief calls out China on tech theft, South China Sea

US Acting Defense Secretary Patrick Shanahan on Saturday denounced China's efforts to steal technology from other nations and militarise man-made outposts in the South China Sea as a "toolkit of coercion," saying activities by Beijing the US perceives as hostile 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 US 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.

"If these trends in these behaviours continue, artificial features in the global commons could become tollbooths. Sovereignty could become the purview of the powerful," he 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 defense strategy that declared great power competition with China and Russia as top priorities.

Shanahan's speech is also arguably an audition to both the world and US 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 US-China trade dispute and the political blowback of America's complaints about Beijing's rapid progress in hypersonic weapons, nuclear technology and space launches.

Lt Gen Shao Yuanming, a senior Chinese officer, said he welcomed deeper communication between China and the US, but he expressed strong opposition to some of Shanahan's comments on US relations with Taiwan and China's operations in the South China Sea (SCS).

He said China has strong legal claims to the waterway, and that Beijing has put necessary "deterrent facilities" there in response to US provocation involving military exercises in that region.

Shanahan told reporters Friday that he would use his speech to the Shangri-La Dialogue conference to criticise 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 US defense secretaries in the past.

"I won't apologise 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."
"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."
"That's too much risk for the department," said Shanahan. "You can't trust that those networks are going to be protected."