Tensions between the U.S. and China escalated on the final day of the Asia-Pacific Economic Cooperation (APEC)  summit, forcing the 21 members to wrap up without a joint declaration for the first time since meetings began in 1993. It is a huge failure and a big loss yet the organisation continues. Disagreement on trade, security, and investment led to create more differences and acute tension particularly between the United States and China. 

The APEC counts for more than 47 percent of world trade and over 60 of global GDP. The US and China trade war has been strongly reflected upon any consensus on APEC summit and yet the declaration has been delayed.  Unfair trade practices and protectionism became the strong reasons for opposition from U.S. point of view. For the United States, China exports more to the United States than it imports from that country. This is considered unfair by the United States.

The Trump Administration has repeatedly accused China of unfair trade practices to justify the tariffs it has imposed on US$ 250 billion of Chinese goods. US Vice President Mike Pence says that China has taken advantage of the United States for many years and those days are over. In his speech, Chinese President Xi Jinping spoke of the need for global cooperation and trade and said all differences could be bridged through consultation. “History has shown that confrontation, whether in the form of a cold war, a hot war or a trade war, will produce no winners,” Xi said to applause. 

Pence criticised China for a range of practices. APEC elders are worrying about the rise of China and counter it. The Port Moresby fails to produce any joint working declaration. G-20 at Argentina might solve some of the pending differences between the United States and China and how they would look upon the issues. 

ASEAN China relations have been strengthening and bilateral trade has crosses the barrier of US$ 515 billion in 2018. China’s share in global GDP has risen. The GDP of ASEAN nations have also rapidly increased that is 5 percent per year. The creation of the Free trade between ASEAN and China removed several of barriers. Goods and services industry have been paying a good role in promoting ASEAN-China business. 

China’s rapid GDP growth over the past decade has increased the country’s per capita GDP from US$ 2,650 in 2007 to US$ 8,670 in 2017, propelling China into the ranks of upper middle-income countries and creating a fast growing middle class that is driving consumer spending across a wide range of goods and services. China has become an increasingly important export market for many ASEAN members for a wide range of goods and services, including agricultural and mineral commodities, energy products, manufactured goods, and services such as tourism. 

An important new focus for economic cooperation between China and ASEAN has been through China’s Belt and Road Initiative (BRI). The BRI is providing large-scale financing for infrastructure projects in many developing countries worldwide, with ASEAN countries being a key part of the BRI. With two-way trade flows having grown so rapidly, improving transport connectivity between China and ASEAN countries through road, rail and port infrastructure will help to reduce logistics costs and further boost the growth in trade. 

Rail projects in Thailand, Indonesia, Laos, and Cambodia are quite lucrative for China and also promoting business with these countries. With the rise of China, these countries will be benefited. The Regional Comprehensive Economic Partnership has more potential to increased ASEAN-China trade and investment. Apart from China-ASEAN relations, the actual fight between the United States and China significantly matters. 

The absence of a joint declaration at the summit is huge failure. The member countries were tired of taking the sides with the United States and China.

The United States has been toeing a counter-narrative and more push on China. Surely the APEC leaders at Port Moresby are disappointed of a united front to talk about trade and connectivity. The entire world is worried. It is clear that the trade war and mutual differences between the United States and China have led the organisation at this point in time. The United States has made it clear that it is not yet interested in trade with China if rules were unchanged. 

A kind of the Cold War may disrupt their feelings and broader relationship between the United States and China has been deteriorated. The Port Moresby summit has touch upon the sensitive issues of trade and how the two biggest economies may cooperate with each other and remain isolated. If the United States and China would fight, only grass will suffer and it would be too difficult to lay down the rules to govern our trade.

 

The writer is Consultant at the

Institute of Strategic Studies Islamabad. He writes on East Asian affairs.