Gyeongju (South Korea), Oct 31: Chinese leader Xi Jinping told Asia-Pacific leaders on Saturday that his country would help to defend global free trade as US President Donald Trump snubbed an annual economic regional forum.
Xi took centre stage at the Asia-Pacific Economic Cooperation summit that began the previous day in the South Korean city of Gyeongju, as Trump left the country just hours before the summit opened, after reaching deals with Xi meant to ease their escalating trade war.
This year’s two-day APEC summit has been heavily overshadowed by the Trump-Xi meeting that was arranged on the sidelines.
Trump described his Thursday meeting with Xi as a roaring success, saying he would cut tariffs on China, while Beijing had agreed to allow the export of rare earth elements and start buying American soybeans. Their deals were a relief to a world economy rattled by trade tensions between the world’s two largest economies.
Trump’s decision to skip APEC fits with his well-known disdain for big, multi-nation forums that have been traditionally used to address huge global problems, but his blunt dismissal of APEC risks worsening America’s reputation at a forum that represents nearly 40 per cent of the world’s population and more than half of global goods trade.
Xi defends multilateralism
“The more turbulent the times, the more we must work together,” Xi said during APEC’s opening session. “The world is undergoing a period of rapid change, with the international situation becoming increasingly complex and volatile.”
Xi called for maintaining supply chain stability, in a riposte to US efforts to decouple its supply chains from China.
Xi also expressed hopes to work with other countries to expand cooperation in green industries and clean energy. Chinese exports of its solar panels, electric vehicles and other green tech have been criticised for creating oversupplies and undercutting the domestic industries of countries it exports to.
It’s Xi’s first visit to South Korea in 11 years, and he’s scheduled to meet South Korean President Lee Jae Myung and new Japanese Prime Minister new Japanese Prime Minister Sanae Takaichi separately on Friday.
APEC faces challenges
Established in 1989 during a period of increased globalisation, APEC represents more than half of global trade and champions free and open trade and investment to accelerate regional economic integration. But the APEC region now faces challenges like strategic competitions between the US and China, supply chain vulnerabilities, ageing populations and the impact of AI on jobs. The US strategy has shifted to economic competition with China rather than cooperation, with Trump’s tariff hikes and “America first” agenda shaking markets and threatening decades of globalisation and multinationalism.
Leaders and other representatives from 21 Asian and Pacific Rim economies are attending the APEC meeting to discuss how to promote economic cooperation and tackle shared challenges. Opening the summit as chair, Lee called for greater cooperation and solidarity to overcome new challenges.
“It’s obvious that we can’t always stand on the same side, as our national interests are at stake. But we can join together for the ultimate goal of shared prosperity,” Lee said. “I hope we will have candid and constructive discussions on how we can achieve APEC’s vision in the face of the new challenge of a rapidly changing international economic environment.”
Despite Trump’s optimism after a 100-minute meeting with Xi, there continues to be the potential for major tensions between the countries, with both seeking dominant places in manufacturing and developing emerging technologies such as artificial intelligence.
“It is certainly a contribution to bring the leaders of the two largest economies together for a meeting where they agreed to withdraw their most extreme tariff and export control threats. As a result, worst-case outcomes for global trade were averted,” said Leif-Eric Easley, professor of international studies at Ewha Womans University in Seoul.
“However, APEC is meant to be more than a venue for a trade war truce,” Easley said. “Greater multilateral efforts are needed to address the region’s most pressing economic challenges, including resisting costly and destabilising protectionism, harmonising regulations for sustainable trade, and coordinating standards for digital innovation.”
Host South Korea pushes for a joint statement
South Korean officials said they’ve been communicating with other countries to prod all 21 members to adopt a joint statement at the end of the summit so as not to repeat the failure to issue one in 2018 in Papua New Guinea due to US-China discord over trade.
South Korean Foreign Minister Cho Hyun said last week that issuing a joint statement strongly endorsing free trade would be unlikely because of differing positions among APEC members. He instead anticipated a broader declaration emphasising peace and prosperity in the region.
As host nation, South Korea places a priority on discussing AI cooperation and demographic challenges such as an ageing population and low birth rates, under the theme “Building a Sustainable Tomorrow: Connect, Innovate, Prosper.” South Korean officials say APEC members will share exemplary cases of responses to AI and demographic issues, explore common steps and formulate new growth strategies during this week’s summit. (AP)
