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.

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As Obama's Asia 'pivot' falters, China steps into the gap

The image of a dysfunctional, distracted Washington adds to perceptions that powerful China has in some ways outflanked the U.S. pivot. For countries not closely allied with the U.S., Obama's no-show will reinforce their policy of bandwagoning with China.

By Stuart Grudgings

Malaysian Prime Minister Najib Razak (front, L) walks with Chinese President Xi Jinping (front, R) during the Malaysia China Economic Summit in Kuala Lumpur October 4, 2013.

KUALA LUMPUR -- When then U.S. Secretary of State Hillary Clinton declared two years ago "We are back to stay" as a power in Asia, the most dramatic symbol of the policy shift was the planned deployment of 2,500 U.S. Marines in northern Australia, primed to respond to any regional conflict.
At this point in time, however, there is not a single U.S. Marine in the tropical northern city of Darwin, according to the Australian defence ministry. 

Two hundred Marines just finished their six-month tour and will not be replaced until next year, when 1,150 Marines are due to arrive.
The original goal of stationing 2,500 Marines there by 2017 remains in place, but the lack of a U.S. presence there two years after the policy was announced underlines questions about Washington's commitment to the strategic "pivot" to Asia.
President Barack Obama's cancellation of a trip this week to four Asian nations and two regional summits due to the U.S. government shutdown has raised further doubts over a policy aimed at re-invigorating U.S. military and economic influence in the fast-growing region, while balancing a rising China.
While U.S. and Asian diplomats downplayed the impact of Obama's no-show, the image of a dysfunctional, distracted Washington adds to perceptions that China has in some ways outflanked the U.S. pivot.
"It's symptomatic of the concern in Asia over the sustainability of the American commitment," said Carl Baker, director of the Pacific Forum at the Center for Strategic and International Studies in Hawaii.
As embarrassed U.S. officials announced the cancellations last week, Chinese President Xi Jinping was in Indonesia announcing a raft of deals worth about $30 billion and then in Malaysia to announce a "comprehensive strategic partnership", including an upgrade in military ties.
He was en route to this week's Asia-Pacific Economic Cooperation (APEC) summit in Bali and the East Asia Summit in Brunei, where Obama will no longer be able to press his signature trade pact or use personal diplomacy to support allies concerned at China's assertive maritime expansion.
Since 2011, China has consolidated its position as the largest trade partner with most Asian countries and its direct investments in the region are surging, albeit from a much lower base than Europe, Japan and the United States. 

Smaller countries such as Laos and Cambodia have been drawn so strongly into China's economic orbit that they have been called "client states" of Beijing, supporting its stance in regional disputes.
Leveraging its commercial ties, China is also expanding its diplomatic, political and military influence more broadly in the region, though its efforts are handicapped by lingering maritime tensions with Japan, the Philippines and several other nations.
"For countries not closely allied with the U.S., Obama's no-show will reinforce their policy of bandwagoning with China," wrote Carl Thayer, emeritus professor at the Australian Defence Force Academy in Canberra.

"BLUE-WATER" EXPANSION
China, for instance, has been the biggest trade partner of the 10-member Association of Southeast Asian Nations (ASEAN) since 2009, and its direct investments are surging, bringing with them increased economic and diplomatic influence.
Chinese companies invested $4.42 billion in Southeast Asia in 2012, up 52 percent on the previous year, according to Chinese state media citing the China-ASEAN Business Council. 

Investments into neighbouring Vietnam rocketed 147 percent.
China is demonstrating that it can deploy forces far beyond its coastal waters on patrols where they conduct complex battle exercises, according to Japanese and Western naval experts. 

Chinese shipyards are turning out new nuclear and conventional submarines, destroyers, missile-armed patrol boats and surface ships at a higher rate than any other country.
Operating from increasingly modern ports, including a new naval base in the south of Hainan island, its warships are patrolling more regularly, in bigger numbers and further from the mainland in what is the most sweeping shift in Asia's maritime power balance since the demise of the Soviet navy.
China's military diplomacy with Southeast Asia is rapidly evolving as it takes steps to promote what Beijing describes as its "peaceful rise".
The Chinese navy's hospital ship Peace Ark recently treated hundreds of patients on a swing last month through Myanmar, Cambodia and Indonesia -- its first such mission across Southeast Asia. 

Its naval vessels returning from regular international anti-piracy patrols in the Gulf of Aden have made calls in Southeast Asian ports, including Singapore and Vietnam.
Still, analysts and diplomats say Beijing has a long way to go to catch up with not just the long-dominant United States, but other regional military powers such as Australia, Japan and Russia.
"China has come late to the party," said Richard Bitzinger, a military analyst at Singapore's S. Rajaratnam School of International Studies.

NOT A PATCHY PIVOT
Prime Minister Lee Hsien Loong of Singapore, one of Washington's most key allies in the region, said it was disappointing Obama would not be visiting Asia.
"Obviously we prefer a U.S. government which is working to one which is not. And we prefer a U.S. President who is able to travel to fulfil his international duties to one who is preoccupied with his domestic preoccupations," Lee said after arriving in Bali.
"It is a very great disappointment to us President Obama is unable to visit."
U.S. officials dismissed the notion that Obama's no-show would imply any weakening of the U.S. commitment to the region.

Just last week, Secretary of Defence Chuck Hagel and Secretary of State John Kerry were in South Korea and Japan to reaffirm the U.S. military commitment to the two key allies, and Kerry will fill in for Obama at the two Asian summits.
"The bottom line is that the United States of America is not going to change one iota the fundamental direction of the policy under this president," Kerry said on Saturday.
"I think everybody in the region understands. Everybody sees this (the cancellation of the visit) as a moment in politics -- an unfortunate moment -- but they see it for what it is."
The United States has ramped up military funding and assistance to its close ally the Philippines, expanded military exercises with other nations and increased regional port visits.
From only 50 ship visits in 2010, nearly 90 ships have visited the Philippines since January this year alone.
Washington has stationed surveillance planes there and promised up to $30 million in support for building and operating coastal radar stations, all aimed at improving its ally's ability to counter China's naval encroachment in the disputed South China Sea that has alarmed several Asian nations.
But talks to establish a framework agreement on a regular rotational U.S. military presence in the Philippines have yet to bear fruit, and are unlikely to have been helped by Obama's cancellation of his planned visit to Manila.
For the Darwin deployment, a U.S. Senate Committee said in April that it would cost $1.6 billion to build lodgings for the Marines, but the Australian government last month called for only a first-stage A$12 million ($11.3 million) tender to construct new quarters at existing Australian barracks for around 350 marines.
The economic leg of the pivot, negotiations for the U.S.-led Trans-Pacific Partnership, has grown to 12 nations. 

But the complex three-year-old talks, which seek unprecedented access to domestic markets, are facing resistance in many countries and are unlikely to completed soon.
A final deal would have to be approved by the U.S. Congress, raising the prospect of domestic politics again obstructing Asia ties.
"Even if the administration could push through some agreement on the TPP, it's very unlikely there is going to be legislative success getting that through based on the acrimony that exists," said the CSIS's Baker.
"...On the commercial side (of the pivot), there seems to be more rhetoric than action."

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China's Xi sidesteps SE Asia pressure over South China Sea disputes

By Kanupriya Kapoor
Xi Jinping walks during a welcoming ceremony at the Presidential Palace in Jakarta October 2, 2013. Xi is on a two-day visit to Indonesia.

JAKARTA -- Chinese President Xi Jinping showed no sign of bending to Southeast Asian pressure to resolve increasingly irascible territorial disputes over the South China Sea on Thursday, simply repeating calls for dialogue.
Xi, in the first address by a foreign leader to Indonesian MPs, made no reference to regional demands, echoed in Washington, that Beijing deal with the rival claims through multilateral talks rather than with individual negotiations.
The issue is certain to overshadow two regional summits next week that Xi will attend. 

But while Xi is touring Southeast Asia, including signing off on multibillion dollar deals with Indonesia, U.S. President Barack Obama has had to cancel trips to the Philippines and Malaysia because of the U.S. government shutdown.
The U.S. crisis has also put into doubt Obama's attendance at the two regional summits at a time when Washington has been promoting its strategy of putting more emphasis on its ties with Asia.
"As for the disagreements and disputes between China and certain Southeast Asian nations on territorial sovereignty and maritime rights, both sides must always uphold the use of peaceful methods ... to maintain the broad picture of bilateral relations and regional stability," he told MPs on the second and last day of his visit to Southeast Asia's largest country.
"China's development is a force for peace and friendship in the world, bringing development opportunities for Asia and the world and not threats."
Last month, the Philippines accused China of violating an informal code of conduct in the South China Sea, home to some of the world's most vital trade routes, by planning new structures on a disputed shoals.
The disputes have centred on concerns that China's use of its growing naval might to back claims to much of the oil- and gas-rich sea could spark a military clash.
Four of the 10 members of the Association of Southeast Asian Nations (ASEAN), including Vietnam and the Philippines but not Indonesia, have overlapping claims with China. 

Indonesia has offered to mediate but has in the past criticised China for not showing more restraint over the disputes.
Next Tuesday sees the Asia-Pacific Economic Cooperation (APEC) summit in the Indonesian resort island of Bali. 

After that, Xi and several other leaders will head to Brunei for the East Asia summit.
"What we wanted to hear from President Xi Jinping was whether China has the goodwill to resolve the South China Sea issue... But he didn't address the issue at all, so I'm disappointed," legislator Tantowi Yahya told Reuters.
Xi has used his visit try to lift relations in the region, saying China hoped trade with ASEAN would reach $1 trillion by 2020. 

He flies later in the day to Malaysia.
China is already Indonesia's biggest trading partner after Japan. 

The two were expected to finalise a raft of deals, mainly in the mining sector, worth more than $30 billion during Xi's visit.
Only about a third of the members of the combined houses attended the speech, the first such address by a foreign leader.

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