By Michael Martina

BEIJING (Reuters) - U.S. policy toward China has been misdirected for decades and policymakers are now recalibrating ties, Senator Elizabeth Warren told reporters during a visit to Beijing amid heightened trade tensions between the world's two largest economies.

Warren's visit comes as U.S. President Donald Trump prepares to implement more than $50 billion in tariffs on Chinese goods meant to punish China over U.S. allegations that Beijing systematically misappropriated American intellectual property.

The Massachusetts Democrat and Trump foe, who has been touted as a potential 2020 presidential candidate despite rejecting such speculation, has said U.S. trade policy needs a rethink and that she is not afraid of tariffs.

After years of mistakenly assuming economic engagement would lead to a more open China, the U.S. government was waking up to Chinese demands for U.S. companies to give up their know-how in exchange for access to its market, Warren said.

"The whole policy was misdirected. We told ourselves a happy-face story that never fit with the facts," Warren told reporters on Saturday, during a three-day visit to China that began on Friday.

"Now U.S. policymakers are starting to look more aggressively at pushing China to open up the markets without demanding a hostage price of access to U.S. technology," she said.

Warren discussed trade issues and North Korea with senior Chinese officials, including Liu He, the vice premier for economic policy, Yang Jiechi, a top diplomat, and the Minister of Defence Wei Fenghe.

She said she told officials she met that Americans cannot support a more integrated economic system with China if it "fails to respect basic human rights".

China's ruling Communist Party has tightened controls on society since President Xi Jinping assumed power, from online censorship to a crackdown on activists and non-governmental organizations, though Chinese officials routinely deny accusations of rights abuses.

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Warren also made stops in Japan and South Korea, and she said that U.S. allies in Asia were having trouble understanding Trump's "chaotic" foreign policy.

North Korea's Kim Jong Un and Trump had earlier exchanged insults and veiled threats of war over North Korea's tests of nuclear weapons and ballistic missiles, but the U.S. leader made the surprising announcement last month that he was prepared to meet Kim.

Warren said success for that meeting would mean getting a commitment to discuss verifiable steps to reduce North Korea's nuclear threat, which would require careful negotiations from a State Department whose role has been vastly diminished under Trump, with several high-profile posts unoccupied.

Trump's efforts to "take the legs out from underneath our diplomatic corps" are a "terrible mistake", she said.

(Reporting by Michael Martina; Editing by Christian Schmollinger)