Policy Alert #178 | November 27, 2018

The Rising Powers gathered in Singapore November 11th-15th for the 33rd Summit of the Association of Southeast Asian Nations (ASEAN). At the ASEAN Summit, the East Asia Summit subgroup and continuing negotiations of the Regional Comprehensive Economic Partnership (RCEP) multilateral free trade agreement also convened. The Economic Leaders’ Meeting of the Asia-Pacific Economic Cooperation (APEC) forum met on the heels of ASEAN November 17th-18th in Papua New Guinea. For the first time since APEC’s annual Economic Leaders’ Meetings began in 1993, no joint declaration was issued, which many observers attributed to tensions between China and the United States. Instead, Papua New Guinea’s Prime Minister and Chair of this year’s APEC Forum Peter O’Neill issued the Era Kone Statement to conclude the proceedings. In this RPI Policy Alert, we catch up on the developments in the Rising Powers’ whirlwind multilateral summit tours.

 

CHINA

Chinese Premier Li Keqiang attended the ASEAN Summit while Chinese President Xi Jinping attended the APEC Meeting. Addressing the ASEAN Plus Three (China, Japan, and South Korea) members, Premier Li hinted that the region’s economies needed to stay the course on free trade: “We should remain committed to economic globalization, multilateralism and free trade, and work to advance regional economic integration and build an open world economy.” At APEC, President Xi reiterated China’s position: “We need to firmly uphold the rules-based multilateral trading system and say no to protectionism.” US Vice President Mike Pence’s address at APEC directly criticized China for “unfair trade practices” such as engaging in “quotas, forced technology transfer, intellectual property theft, and industrial subsidies on an unprecedented scale” and indirectly took a stab at projects financed by China’s Belt and Road Initiative (BRI) and Asia Infrastructure Investment Bank (AIIB) as “unsustainable and of poor quality.” The Chinese Ministry of Foreign Affairs argued the “principal” reason for the failure to agree to a joint declaration at APEC was that a “certain economy insisted on imposing its own texts on other parties, excusing protectionism and unilateralism, and refusing to accept reasonable revisions from the Chinese and other parties.”

• The People’s Daily, the official media outlet of the Communist Party of China, offered a measured response to Pence’s barbs: “China respects the wills of South Pacific island countries on the issue of foreign aid. It never interferes in the countries’ internal affairs, never imposes its will on them, and attaches no political conditions, which is widely welcomed and recognized in the South Pacific region.”
• The China Daily, a state-sponsored newspaper, praised the success of ASEAN, and specifically the progress in RCEP negotiations: “The efforts to realize the RCEP, along with concurrent efforts to facilitate talks on the Code of Conduct in the South China Sea, show the region is standing together to reject a beggar-thy-neighbor approach in favor of equitable and rule-based free trade and international cooperation that helps each country and its neighbors to prosper alike.”
• The nationalist Global Times took aim at the US’s behavior at APEC in two editorials. “It’s delusional of some US elites to think that China is the largest beneficiary of the international system since they mistakenly blame China for the US’ own problems. China has realized its development through hard work, not by taking advantage of the international system,” one argued. To Pence’s apparent references to the BRI, the Times retorted, “The most prominent feature of China’s international assistance and cooperation is that it comes with no political strings attached. Is there a better way than this to show respect for others’ sovereignty?.”
• The independent South China Morning Post hailed President Xi’s trips to Brunei and the Philippines as evidence of the countries’ ability to manage their territorial disputes peacefully: “There can be disagreements in all friendships, but pragmatism will help calm stormy seas.”

 

JAPAN

Prime Minister Shinzo Abe met with Vice President Mike Pence on November 13th in Tokyo ahead of the summits, and Abe attended both the ASEAN and APEC Summits. Officials from the “Quad” or “security diamond” states–Japan, India, Australia, and the US–met on the sidelines of ASEAN and offered a brief statement reaffirming their “shared commitment to maintain and strengthen a rules-based order in the Indo-Pacific in which all nations are sovereign, strong, and prosperous.” At the East Asian Summit at ASEAN, Prime Minister Abe reiterated that a free and open Indo-Pacific for the development of this region.” However, Abe also noted the recent progress in China-Japan relations and added that “realizing a free and open Indo-Pacific does not exclude any countries.” Responding to reporters at a press conference, Foreign Minister Taro Kono expressed Japan’s commitment to free trade: “Japan has continued to raise the banner of free trade towards the entry into force of the TPP11 [Trans-Pacific Partnership] Agreement. Japan has also reached an Economic Partnership Agreement (EPA) with the European Union (EU), and we are now just waiting for the ratification procedures. Regrettably, the Regional Comprehensive Economic Partnership (RCEP) negotiations will likely continue into next year. We will advance negotiations on such major free trade agreements, while also proactively pursuing Free Trade Agreements (FTAs) with small economies one by one.” On the sidelines of ASEAN, Prime Minister Abe and Russian President Vladimir Putin discussed accelerating negotiations on a peace treaty. Despite having formally ended the “state of war” and normalizing ties with the Soviet Union in the 1956 Joint Declaration, relations between Japan and Russia have been complicated by the unresolved territorial dispute over the Kuril Islands.

• Following the meeting between Abe and Pence, the left-leaning Mainichi Shimbun warned the government against bungling the progress made with China: “[I]ntensifying a confrontational approach alongside the U.S. toward the [BRI] will damage Japan-China ties. Tokyo needs to strike an acceptable balance between Japan, the U.S. and China, and prevent Japan-U.S. and Japan-China ties from becoming mutually incompatible.”
• In response to the failure at APEC, the centrist Japan Times agreed: “Some see [Japan] playing a role as mediator, or bridge, between Washington and Beijing. That is too ambitious. Those two governments do not need Tokyo to facilitate their talks. Rather, Japan should stake out its own role.”
• The conservative Yomiuri Shimbun instead suggested Japan has other bilateral ties to broker: “Japan must exercise leadership even in the RCEP process and serve as a bridge between India and China, which are cautious about liberalization, and other nations.”

INDIA

Prime Minister Narendra Modi attended the ASEAN Summit, and participated in the EAS, RCEP, and Quad meetings. Despite the size of India’s economy and its geographic relevance, it is not a member of APEC. According to a press release from the Ministry of External Affairs, Modi “underlined the centrality of trade and investment in enhancing prosperity and security of the Indo-Pacific” and “emphasized that India remains committed to the early conclusion of a balanced and comprehensive RCEP” at EAS.

• The center-right Times of India called for the Quad members, especially India, to do more to balance against China: “[I]f it is to provide strategic hedge against an assertive China – which has basically imposed itself on the South China Sea through its island-building activities – the Quad needs to get its fundamentals right. Here, New Delhi is guilty of unnecessary timidity.”
• The liberal Hindustan Times similarly lamented the lack of progress in India’s efforts to counter China’s influence in the region: “India could take a page out of China’s playbook by speeding up work on long-gestating connectivity projects, such as the India-Myanmar-Thailand trilateral highway, and building new trade and transport linkages with all the Asean states. Stronger strategic and security relations that are underpinned by equally strong economic ties will create greater inter-dependence between India and the Asean members and serve as an effective counter to China’s growing clout in the region.”
• Regarding India’s role in holding up the conclusion of RCEP negotiations, the Times of India urged its government to get a move on: “RCEP should be seen as an opportunity to rectify earlier mistakes. A successful trade deal offers enough benefits to all partners to risk the costs.”

 

RUSSIA

Russian President Vladimir Putin attended ASEAN and made his first state visit to Singapore while Prime Minister Dmitry Medvedev headed to APEC. This year marked the first time Russia joined EAS as a full member and the finalization of Russia’s permanent mission to ASEAN. In his speech to the Russia-ASEAN Summit attendees, President Putin celebrated the 35 percent increase in trade between Russia and ASEAN member states in 2017, and affirmed that “Russia pays great attention to the development of relations with ASEAN based on mutual respect and consideration for each other’s interests.” Prime Minister Medvedev similarly charmed APEC members to take Russia’s efforts to strengthen economic ties seriously through an invitation to participate in the 2019 Eastern Economic Forum: “We have tried to create the most comfortable environment for the business activity that can be compared with all best analogues in the world.” Responding to questions about the developments in negotiations with Japan for a peace treaty, Ministry of Foreign Affairs spokesperson Maria Zakharova suggested the progress was modest: “It is unclear how the military alliance between Japan and the United States may affect the agreements that will be achieved during the talks. These are just some of the questions that come to mind. Clearly, there’s much to be done to improve mutual understanding and trust, and to create a new quality of Russian-Japanese relations that would help us resolve the most challenging bilateral problems.”

• Maria Osipova, an economist at the Centre for the Study of Southeast Asia, Australia, and Oceania at the Russian Academy of Sciences explained the role of US and European Union sanctions in Russia’s shift to Asia in an interview with the nationalist Pravda Report, “Under the current conditions of sanctions, Russia simply has no choice but to expand its influence in the East and look for new partners there. In Southeast Asia, people like and respect not only the Russian language, but also the Russian culture.”
• In an interview with state-owned TASS, Georgy Toloraya, Director of the Asian Strategy Center at the Institute of Economics of the Russian Academy of Sciences, forecasted that the “APEC format as a political platform is probably on the decline and will continue to work exclusively as an economic tool” while the “center of influence is now shifting towards the East Asia Summit (EAS) and other events associated with the Association of Southeast Asian Nations (ASEAN).”

 

RPI acknowledges support from the MacArthur Foundation and Carnegie Corporation of New York for its activities.