Pence pointed directly to news coming out about a burgeoning "trade war" between the United States and China.
China has previously denied Mr Trump's accusations of meddling.
The report, which resulted from a Trump directive in July 2017 to assess the health of industries whose products and services are important to national defense, also accused China of "systematic theft" of USA weapons systems and the illicit transfer of dual-use technology that has upset the military balance between the US and China.
In his speech, Pence cited unnamed sources in the U.S. intelligence community claiming that Beijing planned to target state and local governments in the USA and exploit "wedge issues" to advance China's interests.
"China has initiated an unprecedented effort to influence American public opinion, the 2018 elections, and the environment leading into the 2020 presidential elections", Pence said.
According to a Wall Street Journal report, Pence in a speech on Thursday said American companies must reconsider turning over intellectual property as they expand in China.
"We urge the US to correct its wrongdoing, stop groundlessly accusing and slandering China and harming China's interests and China-US ties", foreign ministry spokesman Hua Chunying said in a statement.
The speech, which will likely strain relations further, came days after a Chinese military vessel almost collided with a US Navy ship in the waters around the disputed Spratly Islands in the South China Sea.
"I think the vice president talked about that".
The report deems China's control of rare earth metals and strategically important technologies like printed circuit boards to be a growing risk to the USA defence industry, and calls for the U.S. to step up investment in particular industries to mitigate China's influence over the supply of strategic products.
Secretary of State Mike Pompeo to visit Beijing amid tension
In an official statement, the US Navy said Lanzhou came within 40m of the American vessel during the September 30 incident. The US takes no official position on the competing claims by countries for territories located in the South China Sea .
Last month, a United Nations rights panel said it had received credible reports that up to one million ethnic Uighurs may be held in extra-legal detention in Xinjiang and USA officials have warned of sanctions against China for human rights abuses. "But be assured, we will not relent until our relationship with China is grounded in fairness, reciprocity, and respect for our sovereignty", he said.
Analysts in Washington have long warned that Beijing could exploit the USA military and defense manufacturers' reliance on China, which from 2013 to 2016, accounted for 78% of all rare earth imports into the US.
Senator Marco Rubio in a statement welcomed the new USA policy towards China. welcome the Administration's heightened commitment to confront China's aggression. The movie "Red Dawn" was digitally edited to make the villains North Korean, not Chinese, Pence said.
Summers said Beijing's key concern "is trying to work out how to deal with an unpredictable and increasingly hostile policy from Washington", rather than extend its influence across the US.
"Going into elections, Trump has got to look like a strong leader and it helps to have an enemy overseas - this is a truism of global relations, " said Rosita Dellios, an associate worldwide relations professor at Bond University in Gold Coast, Australia.
"The Chinese side is firmly opposed to it", she said.
He explained that China prioritises the erosion of American military power.
The administration's offensive on China comes as a cloud hangs over Trump with an investigation into whether his campaign colluded with Russian Federation to swing the 2016 presidential election in the Republican real estate tycoon's favor.
The lines of communication remained open between Beijing and Washington, decreasing the risk of hot conflicts erupting, he said.