US and China trade barbs at Apec over investment and economic policy
The United States and China swapped barbs over trade, investment and regional security at an Asia Pacific Economic Co-operation summit yesterday, 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.
Illustrating the impasse between the world’s two largest economies, a diplomat involved in negotiating an Apec leaders’ declaration said trade was a sticking point, and the host nation was having trouble finding language acceptable to all.
Mr Pence took direct aim at Mr 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 constricting belt or a one-way road,” Mr Pence told the Apec chief executive summit, a precursor to the official leaders’ meeting, held on a cruise liner tethered in Port Moresby’s Fairfax Harbour.
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 US.
US President Donald Trump is not attending the Apec meeting, nor is his Russian counterpart, Vladimir Putin.
Mr Xi, who is staying in Port Moresby, has been feted by PNG officials and stoked Western concern on Friday when he held a meeting with Pacific island leaders, in which he pitched the Belt and Road initiative.
Speaking before Mr Pence, Mr Xi said there was no geopolitical agenda behind the project, which was unveiled in 2013 and aims to bolster a network of land and sea links with South East 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 Mr 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,” he said.
Sri Lanka formally handed over commercial activities in its main southern port of Hambantota to a Chinese company last December as part of a plan to convert $6 billion of loans that Sri Lanka owed China into equity.
Soon after Mr 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.
There were differences between 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.
Mr Xi told delegates that the shadow of “protectionism and unilateralism” hung over global growth and erecting barriers and cutting ties was short-sighted and doomed to fail. But Mr Pence made it clear that the US would not back down, saying it could more than double the $250bn of Chinese goods subject to tariffs.
Mr Trump and Mr Xi are due to meet at a G-20 meeting in Argentina late this month.