HANOI (AFP) - Washington's top diplomat urged South-east Asia on Thursday (Sept 10) to cut ties with Chinese companies that are helping to build islands in the South China Sea, weeks after the US blacklisted two dozen firms working in the disputed waters.

Secretary of State Mike Pompeo made the comments at the Asean meeting, which was overshadowed by the US-China rivalry over a range of issues, from trade to the coronavirus.

Tensions are also simmering over the South China Sea, with the United States last month sanctioning 24 Chinese state-owned companies it said had helped Beijing's military build-up in the resource-rich waterway.

Mr Pompeo said it was time for South-east Asian governments to reconsider their own relationship with firms working in the sea.

"Don't just speak up, but act," he told the 10 foreign ministers of the Association of South-east Asian Nations during a virtual meeting.

"Reconsider business dealings with the very state-owned companies that bully Asean coastal states in the South China Sea.

"Don't let the Chinese Communist party walk over us and our people."

This month's Asean meeting comes days after Beijing launched ballistic missiles into the South China Sea as part of live-fire exercises.

Vietnam, which is chairing the meeting, expressed "serious concern" about recent militarisation of the sea.

"This has eroded trust and confidence, increased tension and undermined peace, security and rule of law in the region," said Foreign Minister Pham Binh Minh.

But the Philippines already said last week that it would not follow the US lead because it needed Chinese investment, even as a fresh dispute between the two nations over Scarborough Shoal - one of the region's richest fishing grounds - hangs over the talks.

And Chinese Foreign Minister Wang Yi has laid blame on the US for tensions, claiming Washington is "becoming the biggest driver" of the waterway's militarisation.

CONTESTED WATERS

China claims the majority of the South China Sea, invoking its so-called nine-dash line to justify what it says are historic rights to the key trade waterway.

Vietnam, the Philippines, Malaysia, Brunei and Taiwan all contest parts of China's declared territory in the sea.

Tensions between the US and China have also been exacerbated by concerns over Hong Kong, where Beijing recently imposed a draconian national security law in response to months of civil unrest last year.

Mr Pompeo "joined several countries in raising concerns over... the arrests of pro-democracy students, the year-long postponement of elections, and disqualification of pro-democracy electoral candidates", according to spokesman Morgan Ortagus.