UPDATE 2-Pompeo jabs at China's 'bad behaviour', defends U.S. tariffs

(Adds comment from senior Chinese diplomat Wang Yi, additional
Pompeo quotes on China)
By Patpicha Tanakasempipat
BANGKOK, Aug 2 (Reuters) - U.S. Secretary of State Mike
Pompeo on Friday decried "decades of bad behaviour" from China
that have hampered free trade, laying out a case at a Southeast
Asian forum for Washington's escalating trade war with Beijing.
Pompeo's statements came after President Donald Trump on
Thursday announced he would slap a 10% tariff on the remaining
$300 billion of Chinese imports starting Sept. 1, abruptly
ending a truce in year-long trade dispute between the world's
two largest economies.
"We want free and fair trade, not trade that undermines
competition," Pompeo told a regional youth leadership program in
the Thai capital Bangkok, where he is attending a wider meeting
of Southeast Asian nations with world powers.
U.S. criticism of China has been a running theme at the
Bangkok forum.
"For decades, China has taken advantage of trade ... It's
time for that to stop. President Trump said we're gonna fix
this. And to fix it requires determination, and that's what you
saw this morning," Pompeo said on Friday.
Senior Chinese diplomat Wang Yi told reporters separately in
Bangkok that the new tariffs were not a correct or constructive
way to resolve the trade dispute between the two countries.
Asked about the global economic disruption resulting from
the U.S.-China row, Pompeo responded: "There have been negative
implications from decades of bad behaviour from China."
The proposed new tariffs on Chinese goods could further
disrupt global supply chains. U.S. and Chinese negotiators ended
a brief round of trade talks in Shanghai on Wednesday with
little sign of progress and agreed to meet again in September.
Global stocks took another beating on Friday with investors
piling into safe-haven assets. Pompeo - who had assured Southeast Asian partners a day
earlier that Washington would not force them to choose sides
between the United States and China - used his speech on Friday
to portray U.S. investment as a more benign option.
"Our investments don't serve a government, and our
investment here don't serve a political party, or frankly a
country's imperial ambitions," he said.
"We don't fund bridges to close gaps of loyalty," he said,
adding later: "Ask yourself this, who really encourages
self-sufficiency and not dependence, investors who are working
to meet your consumers' needs, or those who entrap you in debt?"
His comments appeared to be a jab at China's mammoth Belt
and Road Initiative, which is aimed at boosting economic and
trade ties and building a modern version of the Silk Road to
link China with Asia, Europe and beyond through large-scale
infrastructure projects.
It has, however, run into opposition in some countries over
fears that opaque financing arrangements lead to unsustainable
debt and that it is more about promoting Chinese influence than
bringing development.
U.S.-China relations have been fraught on issues ranging
from trade, U.S. sanctions on Chinese telecoms giant Huawei,
Taiwan and the busy South China Sea waterway.
Pompeo and Wang at first struck a conciliatory tone when
they met face-to-face in Bangkok on Thursday for the first time
this year.
However, Pompeo soon renewed criticism, referring to Chinese
"coercion" of neighbours in maritime confrontations in the
disputed South China Sea and said Beijing's upstream
dam-building on the Mekong River was harming countries in
Southeast Asia that depend on the waterway. (Writing by Kay Johnson; Editing by Sam Holmes, Tom Hogue &
Shri Navaratnam)