APEC summit sees US-China reversal
November 8th, 2009 | 
Author: By Sarah Stewart from AFP
In the 20 years since its launch, the Asia-Pacific’s top economic grouping has witnessed a stunning realignment with China on the march and the United States mired in crisis.
President Barack Obama heads to Singapore for this week’s annual Asia-Pacific Economic Cooperation (APEC) meeting with the US recovery painfully slow, the dollar on shaky ground, and US diplomatic standing in need of repair.
Unlike the United States, China was not a founding member of APEC when the club was launched in November 1989, five months after the violent Tiananmen Square crackdown made the Asian country an international pariah.
When it did join in 1991, China was still in transition from a centrally planned economy, but is now striking an increasingly confident pose on the world stage.
Poised to become the world’s second-largest economy, it is exerting its influence everywhere – financing America’s debt, becoming a top buyer of natural resources, and making its voice heard on major diplomatic issues.
But despite its reduced circumstances, the United States has a long history of leadership in the region and is still the major marketplace for goods produced by export-dependent Asia-Pacific nations.
“We believe America plays an indispensable role in Asia in many fields – economic, political, strategic, security,” APEC host Singapore’s Prime Minister Lee Hsien Loong said last week.
“We’ve been talking about a multipolar world, but de facto the US is the most powerful nation in the world and will be so for some time to come,” said Lee, who will welcome 20 other leaders for the November 14-15 APEC summit.
Lee’s comments came amid debate about the US role in various proposed free-trade zones and economic communities, including a Japanese-sponsored East Asian Community in which Washington’s involvement is unclear.
Charles Morrison, president of the East-West Center in Hawaii, said regional nations were content with the current balance in US-China relations.
“Asian nations don’t want to make choices and so they’re very comfortable in the framework where the US and China get along together,” he said.
“But it’s a very natural thing that, if you’re a smaller power, you want to be able to play off to some extent the larger powers but don’t want a conflict that forces you to take sides.”
Morrison said the United States also carries into this APEC summit the trump card of a “very articulate, popular young leader” in Obama, whose debut presidential tour of Asia will take him to China after Singapore.
Huang Yiping, professor of economics at Peking University in Beijing and a former chief Asia economist with Citigroup, said China would face challenges as it begins to exert its influence more heavily.
“Obviously the economy is growing significantly and its influence is rising very rapidly.
“But the issue China will have to deal with is whether or not we are ready to play a leadership role in regional or global affairs and that’s something I think we need to be a bit careful about,” he said. – AFP
“As a decision-maker you have to make choices. The strategy the Chinese government adopted 30 years ago was that we just want to focus on economic development and we don’t want trouble.
“Going forward there may be some difficult stages for China as well.”
Huang said that Asia-Pacific nations simply cannot afford to turn their back on the vast US economy and its diversified financial system.
“The US takes more than 20 per cent of the finished exports from Asia and China takes about six per cent so I don’t think it’s an equal competition,” he said.
“The US will continue to play a very significant role in the region, even though its relative importance is declining and the importance of the other developing economies is rising.”
APEC comprises Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, the United States and Vietnam.
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China is economically strong because of its mass productivity and high saving rate. If you ask them to run a company outside of China I don’t think they can. In terms of understanding management and cultural sensitivities, they are still no match for the Japs/Koreans or US. But maybe if given time, they will catch up.
They will catch up ? Yes, probably a long time coming. Its their culture that’s the stagnating their growth. From a historical perspective it has been so and will always be.
Take a look at the recent case involving an SGX listed China firm here. When faced with a critical call very recently all the company’s Chinese directors just abandoned ship like that (resigned en bloc) leaving the independent (local) director holding the fort (this was a non-executive director who was not involved in the company’s operations). Their level of corporate responsibilities is still in embryonic stage but they are talking about launching 3G spaceships. Their mindset and culture is to take the shortest cut to solve any problems that arise. To curb massive corruption in the establishment they employ punitive punishment (hoping that the problem would iron themselves out, an approach more akin to Indonesia, except that the Indons are more forgiving in their punishments such that they are always wallowing in perpetual cycle of self-gratification). The Chinese way is always to nip them in the bud and the exigent approach always produce temporary immediate result, but over the longer term the problem persists. No efforts were made to get to the roots of the corrupt culture, to understand its latency and to re-educate the population of its evil, etc.
That’s just an example to explain why the “sleeping dragon” has been named as such since time immemorial and will probably remain as one for a long time to come per se.
@Jim
you are spot on!
look at SHANGHAI…it was built almost instantly as quickly as i cook my packet of instant noodles.
Just a few years ago,they were still sending their top guns to
singapore-based global banks to understudy.
now,they are “playing” poker in the world’s FX markets!who could imagine this just some years back?But.of course,they have huge fx reserves they gotten from “cheap” exports including “human capital”.hp designed in USA,MANUFACTUED in prc
and sold still at america prices!
however,if you probe deeper,it’s only the top echelon that has gotten further,the main body of their workforce are still manned by workers of much lower sub-standard calibre.AND,THERE IS THE QUESTION OF BUSINESS ETHICS.
so,i do agree,as compared to other more developed nations and evn tiny singapore,they still need to do alot of “catch-up”.