For his part, a combative Pence warned that United States tariffs would remain in place unless Beijing "changes its ways".
In his speech, the Chinese president spoke against unilateralism and trade protectionism - veiled swipes at the Trump Administration's America First trade policies.
Speaking immediately after the Chinese leader, Mr Pence delivered a sharp critique of China's practices, saying that Beijing has taken advantage of the USA for many years as it engaged in quotas, forced technology transfer and intellectual property theft.
Apec was formed almost 30 years ago to lower barriers to trade, and this year's summit comes as the USA and China have imposed tit-for-tat tariffs on billions of dollars of each other's goods, with both threatening to step up action if necessary.
Carpio said that like all other coastal states, the Philippines under UNCLOS had exclusive sovereign rights to explore and exploit the natural resources in its exclusive economic zone (EEZ) in the West Philippine Sea, which is part of the South China Sea.
As a result, Xi noted, China has become the world's biggest trader of goods, the biggest tourism market and a major trading partner with over 130 countries. The project, which could take decades and cost trillions of dollars to complete, was harshly criticized by Pence and Australian Prime Minister Scott Morrison, whom Trudeau will meet Sunday.
There was no hint of compromise from Mr. Pence.
He added that the United States would join forces with Australia in the development of a new naval base to be built in PNG's Lombrum Naval Base on Manus island, in what is seen as a move to curb China's influence in the Pacific.
"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.
"We have taken decisive action to address our imbalance with China", he said.
Xi also said that no one would gain from heightened tensions between the USA and his emerging superpower.
China has stayed on the path of peaceful development, got actively involved in global economic governance, and actively supported other developing countries in their development, he said. We don't coerce or compromise your independence.
One of the complaints about Xi's signature Belt and Road policy has been the accusation that it overburdens poor countries with debt, which could leave them dependent on China.
"We do not a offer constricting belt or a one-way road", Pence told a summit of APEC chief executives, a precursor to the official leaders' meeting. His vice-president, though, took a hard line to a gathering of business leaders at the APEC summit, saying there would be no backing down from tariffs until China changed its ways.
Before the APEC dummit Mr O'Neill said he "wasn't interested" in geopolitics, and wanted to work with everyone.
He said while the United States has been forging new trade deals, they have also stood up to countries that resort to unfair trade practices.
Said Pence: "China has an honoured place in our vision of a free and open Indo-Pacific, if it chooses to respect its neighbours' sovereignty, embrace free, fair and reciprocal trade, and uphold human rights and freedom".