US-China divisions take centre stage at APEC summit

US-China divisions take centre stage at APEC summit

Mike Pence at APEC Summit
US Vice President Mike Pence attends the APEC CEO Summit 2018 in Port Moresby, Papua New Guinea, Saturday, Nov. 17, 2018. (Photo: AP)

PORT MORESBY: The United States and China swapped barbs over trade, investment and regional security at an Asia Pacific Economic Co-operation (APEC) summit on Saturday (Nov 17), as growing fault lines among members suggested little prospect of consensus at the weekend meeting.

Speaking in the Papua New Guinean capital, US Vice President Mike Pence said there would be no end to American tariffs until China changed its ways, after its President, Xi Jinping, warned that the shadow of protectionism and unilateralism was hanging over global growth.

“We have stood up to countries that use unfair trade practices. Just look at the stance President Trump has taken on our trading relationship with China. As the President said in the Oval Office, we have great respect for President Xi and great respect for China but in the President’s words, China has taken advantage of the US for many, many years and those days are over,” Pence said.

Pence’s comments come in response to the message Xi sent out to leaders at the APEC CEO summit, a precursor to the official leaders' meeting, where Xi said a trade war will have no winners and called for nations to uphold a multilateral trading system led by the World Trade Organization.

“The rules made should not be followed or bent as one sees fit and they should not be applied with double standards for selfish agenda,” Xi had said.

NO “CONSTRICTING BELT OR A ONE-WAY ROAD”

Pence also took direct aim at Xi's flagship Belt and Road programme, which China has been promoting to Pacific nations at APEC, saying countries should not accept debt that compromised their sovereignty.

"We do not offer a constricting belt or a one-way road," Pence told leaders at the APEC CEO summit.

“Know that the US offers a better option. We don’t drown our partners in a sea of debt. We don’t coerce or compromise your independence. The US deals openly and fairly. We do not offer a constricting belt or a one-way road when you partner with us. We partner with you and we all prosper," Pence said.

China's efforts to win friends in the resource-rich Pacific have been watched warily by the traditionally influential powers in the region - Australia and the United States.

Xi stoked Western concern when he held a private meeting with Pacific island leaders on Friday, where he pitched the Belt and Road initiative.

Speaking before Pence, Xi said there was no geopolitical agenda behind the Belt and Road plan, which was unveiled in 2013 and aims to bolster a sprawling network of land and sea links with Southeast Asia, Central Asia, the Middle East, Europe and Africa.

"It does not exclude anyone. It is not an exclusive club closed to non-members, nor is it a trap as some people have labelled it."

There have been concerns that small countries that sign up for infrastructure projects will be left with debt burdens they cannot service, something Pence highlighted.

"Do not accept foreign debt that could compromise your sovereignty. Protect your interest. Preserve your independence. And just like America, always put your country first," Pence said, adding that the US was a better investment partner.

Sri Lanka formally handed over commercial activities in its main southern port in the town of Hambantota to a Chinese company last December as part of a plan to convert US$6 billion of loans that Sri Lanka owed China into equity.

Soon after Pence spoke, Australia said it was joining the US and Japan in a partnership that would help countries in the region develop infrastructure priorities, a possible alternative to China's Belt and Road.

REGIONAL SECURITY

Pence also said the US would join Australia to help Papua New Guinea build a navy base on its Manus Island, which was a US base in World War Two.

The plan comes after China emerged as a possible developer of the deep-water port, which analysts say could impact the West's ability to navigate in the Pacific while offering China a site close to US bases in Guam.

"The United States of America will continue to uphold the freedom of the seas and the skies, which are so essential to our prosperity," Pence said.

In a meeting that could irritate Beijing, Pence had talks with Taiwan's envoy to APEC, Morris Chang.

Beijing considers Taiwan a wayward province of "one China", ineligible for state-to-state relations, and has never renounced the use of force to bring the island under its control.

Despite Taiwan's lack of diplomatic recognition by the majority of countries, APEC allows it to participate as an economic, rather than political, entity.

Pence later told reporters travelling with him he would "carry back" a Taiwan proposal for a free trade agreement.

DOUBLE TARIFFS?

US President Donald Trump is not attending the APEC meeting, nor is Russia's president, Vladimir Putin.

Trump and Xi are due to meet at a G20 meeting in Argentina late this month, raising some hope that trade tension could ease.

There were differences between other APEC members, with some calling for radical change to trade systems while others argued for a return to the status quo on globalisation.

Malaysian Prime Minister Mahathir Mohamad warned globalisation was leaving some people behind and fuelling inequality.

Australian Prime Minister Scott Morrison mounted a defence of free trade, saying a billion people had been lifted out of extreme poverty since 1991 because of the jobs and cheaper goods that free trade brought.

"Global growth is shadowed by protectionism and unilateralism," Xi told delegates, saying that erecting barriers and cutting ties was a short-sighted approach doomed to fail.

But Pence made it clear that the US would not back down.

"The United States though will not change course until China changes its ways," he told delegates gathered on a cruise liner tethered in Port Moresby's Fairfax Harbour.

"We put tariffs on US$250 billion in Chinese goods, and we could more than double that number."

Trump is pressing China to reduce its huge bilateral trade surplus and make sweeping changes to its policies on trade, technology transfers and high-tech industrial subsidies.

China has denied that US companies are forced to transfer technology and sees US demands on rolling back its industrial policies as an attempt to contain China’s economic rise.

Additional reporting by Brandon Tanoto

Source: Reuters/CNA/ic(aj)

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