Tillerson's remarks on relations between the world's two largest democracies, ahead of his first trip to South Asia as secretary of state, risked endearing Washington to one Asian power while alienating another.
Tillerson said the world needed the U.S. and India to have a strong partnership. He said the two nations share goals of security, free navigation, free trade and fighting terrorism in the Indo-Pacific, and serve as "the eastern and western beacons" for an international rules-based order which is increasingly under strain.
Both India and China had benefited from that order, but Tillerson said India had done so while respecting rules and norms, while China had "at times" undermined them. To make his point, he alluded to China's island building and expansive territorial claims in seas where Beijing has long-running disputes with Southeast Asian neighbors.
"China's provocative actions in the South China Sea directly challenge the international law and norms that the United States and India both stand for," Tillerson said in an address at the Center for Strategic and International Studies, a Washington think tank.
He also accused China of economic activities and financing that saddles developing countries in the region with enormous debt.
China responded with a statement saying it "contributes to and defends the rules-based world order" and seeks to advance international cooperation through the United Nations. It also hopes for a "healthy and sound" China-U.S. relationship.
"We will never seek hegemony or engage in expansion, never pursue development at the expense of others' interests," said the statement issued by the Chinese embassy in Washington.
A senior State Department official told reporters that the speech was intended to map out a strategy for U.S.-India relations for the next century, in which the region's leading democracies - also including Japan and Australia - blunt China's growing influence and challenges to the rules-based order. The official was not authorized to speak by name and requested anonymity.
Tillerson said the U.S. seeks constructive relations with China but "won't shrink" from the challenges it poses when it "subverts the sovereignty of neighboring countries, and disadvantages the U.S. and our friends."
U.S.-India relations have generally prospered in the past decade, in part because of their shared concerns about the rise of China - whose leader Xi Jinping told a ruling communist party congress Wednesday that it was time for China "to take center stage in the world and to make a greater contribution to humankind."
While President Donald Trump has looked to deepen cooperation with China on addressing the nuclear threat from North Korea, he's sought a much closer relationship with India, which also shares U.S. worries on Islamic extremism.
"In this period of uncertainty and angst, India needs a reliable partner on the world stage. I want to make clear: with our shared values and vision for global stability, peace and prosperity, the United States is that partner," Tillerson said.
Tillerson said the U.S. wants to improve India's military capabilities, it has offered to sell it unarmed Guardian surveillance drones, aircraft carrier technologies and F-18 and F-16 fighter aircraft, he said.
He said the U.S. and India were leading regional efforts on counterterrorism. He said they were "cross-screening" known and suspected terrorists, and later this year will convene a new dialogue on terrorist designations. In July, the U.S. sanctioned Hizbul Mujahideen, a Pakistan-based rebel group that fights against Indian control in the divided Himalayan region of Kashmir.
Tillerson called Wednesday for Pakistan "to take decisive action against terrorist groups based within their own borders that threaten its own people and the broader region."
Last week, Pakistan, acting on U.S. intelligence, secured the release of a U.S.-Canadian family held by a Taliban-linked group for five years, a rare boost for a relationship snared on Islamabad's links to militants in Afghanistan. On Wednesday, Vice President Mike Pence spoke with Pakistani Prime Minister Shahid Khaqan Abbasi and thanking him for Pakistan's help.
Pence called it an "important development in its support for U.S. strategy against terrorism in the region, but highlighted that cooperation against militant groups must be continued and sustained," a White House statement said.
Associated Press writer Matthew Lee contributed to this report.
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