The South Asian island nation is considered particularly at risk of what American officials allege to be Chinese international exploitation.
Mr Pompeo made his latest attack on China after talks with President Gotabaya Rajapaksa on Wednesday, part of his tour to India, Sri Lanka, the Maldives, Indonesia and finally Vietnam.Â
The tour is aimed at bolstering allies against China's increasing political and military inroads in the region in recent years, and comes less than a week before the US presidential election.
Even before Mr Pompeo arrived in Sri Lanka, China fired back at the US tour, accusing Washington of bullying âsmaller and medium-sized nationsâ.
US officials, meanwhile, complained that development and infrastructure projects in Sri Lanka benefit China more than the presumed recipients â a refrain Mr Pompeo repeated with Sri Lankan Foreign Minister Dinesh Gunawardena. He said the country could be âa beaconâ for freedom and democracy in the region as long as it retained its âfull sovereignty.â
âA strong sovereign Sri Lanka is a powerful strategic partner for the United States on the world stage,â Mr Pompeo told reporters as he wrapped up a 12-hour visit, the second stop on the five-nation tour.
âWe want the people of Sri Lanka to have sovereignty and independence. We want them to be successful. We want sustainable development for them.â
Foreign Minister Dinesh Gunawardena said Sri Lanka wanted peace and good relations with all.
âSri Lanka is a neutral, non-aligned country committed to peace,â he said. âWe hope to continue in our relations with the United States and with other parties.â
The Chinese embassy in Colombo mocked Mr Pompeoâs comments, tweeting a promotional image for the âAliens vs Predatorâ video game.
âSorry Mr Secretary Pompeo, weâre busy promoting China-Sri Lanka friendship and cooperation, not interested in your Alien v Predator game invitation,â it said.
Sri Lanka is a much closer ally to Beijing than is India, the first stop of Mr Pompeoâs tour, and which is locked in a military stand-off with Beijing in the mountainous Ladakh region.
Earlier this month, Beijing announced it would provide Sri Lanka with a $90-million grant to help rural development after President Gotabhaya Rajapaksa sought help from a visiting Chinese delegation in disproving a perception that China-funded megaprojects are âdebt traps.â
Additional reporting from the agencies