Obama’s Absence Leaves China as Dominant Force at APEC

By JANE PERLEZ and JOE COCHRANE
Xi Jinping arrived at the Asia-Pacific Economic Cooperation summit on Monday.

NUSA DUA, Indonesia — Secretary of State John Kerry sat in the chair reserved for President Obama at the opening session of the Asia-Pacific Economic Cooperation summit meeting on Monday, leaving China’s leader, Xi Jinping, as the dominant leader at the gathering, devoted to achieving greater economic integration in the region.
Mr. Obama, who canceled his appearance at the meeting to try to resolve the government shutdown in Washington, had planned to use his personal persuasion to push forward negotiations for the Trans-Pacific Partnership, a trade bloc that is led by the United States and that excludes China.
A statement by foreign and trade ministers painted a fairly gloomy economic forecast for the 21 members of the Asia-Pacific Economic Cooperation group as the leaders met at an international conference center on the Indonesian island of Bali.
“Global growth is too weak, risks remain tilted to the downside, and the economic outlook suggests growth is likely to be slower and less balanced than desired,” the ministers said.
To overcome the slow growth, it is imperative for the group to agree on a “comprehensive series of structural reforms so as to increase productivity, labor force participation and high-quality job creation,” the statement said.
According to data from the group, its members account for about 40 percent of the world’s population, 55 percent of global gross domestic product and about 44 percent of world trade. 

Trade within the group has grown nearly sevenfold since it was founded in 1989, topping $11 trillion in 2011.
The American trade representative, Michael Froman, said the Obama administration remained committed to trying to complete the negotiations for the Trans-Pacific Partnership by the end of the year.

“Our message is ‘Let’s get this done as soon as possible,'” Mr. Froman said in an interview. 

The Dec. 31 goal is “ambitious, but it’s doable,” he said.
The partnership, a major element of Mr. Obama’s pivot toward Asia, is intended to achieve open market access among the 12 participants, with the United States, Japan, Mexico and Canada as the major economies.
The administration was hoping that the leader of South Korea, Park Geun-hye, would announce at the meeting that South Korea was ready to join the negotiations. 

But South Korean officials said Ms. Park would not make that declaration in Bali.
The absence of Mr. Obama took some gravitas out of the conference, and there were deep questions about how the president could get a trade pact through Congress given the hostility of conservative Republicans in the House toward his domestic programs.
The prime minister of Singapore, Lee Hsien Loong, who maintains friendly relations with China, was the most direct in describing the damage to the summit meeting by Mr. Obama’s absence.

“No other country can replace” the American engagement in Asia, he said.

“Not China, not Japan, not any other power. That is something which we continue and encourage at every opportunity.”
President Bill Clinton canceled a trip to the group’s summit meeting in Japan in 1995, and was able to recover American prestige in the region, officials said. 

But the far greater competition for influence between the United States and China and the dynamic economies of Asia make the region far more important to Washington now.
On the sidelines of the summit meeting, Mr. Kerry met with the Russian foreign minister, Sergey V. Lavrov, and the two diplomats expressed satisfaction with the progress of the destruction of chemical weapons in Syria by international disarmament inspectors. 

The first weapons, including missile warheads, were destroyed Sunday, Mr. Kerry said.
“It is a good beginning, and we should welcome a good beginning,” he said. 

The secretary also praised the cooperation of Russia and the compliance of Syria in the process.
The two diplomats said they would push for a November start for a Geneva conference to reach a political settlement in Syria under the auspices of the United Nations.
In opening remarks to the leaders at the summit meeting, President Susilo Bambang Yudhoyono of Indonesia, the host nation, said the group was even more important today because its 21 member economies continued to “feel the pain” of the global economic crisis.
“In view of the difficult global economic situation these days, it becomes even more critical for all of us to work together in maintaining regional resilience,” he said.

“With this resilience, the APEC region will remain an important engine of global growth.”
Mr. Yudhoyono, citing International Monetary Fund data, said Sunday that the economies in the group would grow by 6.3 percent this year and 6.6 percent in 2014.
A report released Monday by the World Bank, however, said that developing economies in East Asia and the Pacific, some of which are members of the group, were expanding at a slower pace as China shifted from export-driven growth and focused on domestic demand. 

According to the report, the growth forecast for the region’s developing countries is 7.1 percent for this year and 7.2 percent for 2014, a slight downward projection from April.
Growth in larger middle-income countries, including Indonesia, Malaysia and Thailand, is also softening because of lower investment and global commodity prices, as well as lower-than-expected export growth, the report said. 

The only exception is the Philippines, where growth accelerated in 2013, said Bert Hofman, the World Bank’s chief economist for East Asia and the Pacific.
“It’s always a bit of a pity if you slow down, but we see a pickup next year on the premise that the global economy will do better,” Mr. Hofman said. 

“Seven percent growth for the whole region, excluding China, that’s a very decent growth rate. The East Asia and Pacific region still contributes a lot to world growth.”
One of the most important aspects of the summit meeting is the private discussions between leaders on the sidelines of the main gathering.
The Australian leader, Tony Abbott, met with Mr. Xi on Sunday night for the first time since becoming prime minister in September. 

On Monday, he said he hoped a free-trade agreement between Australia and China would be completed within 12 months.
Mr. Abbott said he planned to lead a large government and business delegation to China within the first six months of 2014, at the invitation of Mr. Xi. 

“The prosperity of every country in the region, including Australia, critically depends on trade and investment,” he said. 

“Our recent prosperity critically depends on the massive expansion of resource exports to countries in our region, particularly to China, and we want that to continue and not slow down.”
Mr. Abbott had planned to meet with Mr. Obama as well. 

The Australian leader said it was “a disappointment” that Mr. Obama had canceled his trip, but said it was understandable given the political deadlock in Washington. 

He said the president’s absence would not undermine the American “pivot” strategy in Asia.
“I fully understand the most constructive way America can engage with the world depends upon America being as strong as it can be at home,” Mr. Abbott said.

“I don’t think anyone here holds it against the president that he has very important business at home, and it is certainly in no way inconsistent with the pivot in Asia.”
Negotiations between China and Australia were described last week as “stalled” by the Australian minister for trade and investment, Andrew Robb.