Divided APEC leaders battle for unity after US, China spat

PORT MORESBY (AFP) - Leaders from 21 Asia-pacific nations battled to paper over gaping differences yesterday after an unusually sharp exchange of words between the group’s two most powerful members, the United States and China.

With just hours of the two-day summit remaining, officials scrambled to forge enough of a consensus to issue a formal joint statement and were admitting privately that it might not be possible, amid yawning differences on trade policy.

The annual gathering has been overshadowed by speeches on Saturday from Chinese President Xi Jinping and US Vice President Mike Pence, which appeared to represent competing bids for regional leadership.

Pence warned smaller countries not to be seduced by China’s massive Beltand-road infrastructure programme, which sees Beijing offer money to poorer countries for construction and development projects.

The “opaque” loans come with strings attached and build up “staggering debt”, Pence charged, mocking the initiative as a “constricting belt” and a “one-way road”.

He urged nations instead to stick with the United States, which doesn’t “drown our partners in a sea of debt” or “coerce, corrupt or compromise your independence”.

In a speech to business leaders just minutes before Pence, Xi insisted the initiative was not a “trap” and there was no “hidden agenda” -- amid criticism that it amounts to “chequebook diplomacy” in the region.

Xi also lashed out at “America First” trade protectionism, saying it was a “short-sighted approach” that was “doomed to failure”.

The feisty barbs on a gleaming white cruise ship moored in Port Moresby set the scene for a potentially fiery meeting between Xi and US President Donald Trump at the G20 summit in Argentina at the end of this month.

But Xi and Pence, who both wore shiny, red shirts provided by the Pacific island did hold talks on Saturday night at the leaders’ gala dinner.