A hectic week of high-level diplomacy in Beijing has seen China asserting its weight and snatching the region’s economic leadership from traditional leader, the United States. The implications will not be missed as ASEAN leaders meet in summit in Myanmar this week.



THE APEC Summit that just concluded in Beijing was no doubt China’s show. Beijing came out looking very much what it is touted to be – the world’s second largest economy – now leading the charge towards a freely-trading region known as the Free Trade Area of the Asia Pacific (FTAAP). For a once-closed economy that was not even part of the global trading system, this is one giant leap. In so doing, China overshadowed and reduced a rival initiative from the United States – the Trans Pacific Partnership (TPP) which excludes Beijing – to what is a subsidiary platform.


President Xi Jinping has just shown that the agenda of liberalising trade in the Asia-Pacific cannot but take China into account; indeed, this agenda will henceforth be dictated by China. To show how serious it is, the Beijing APEC Declaration came complete with a roadmap towards the realisation of the FTAAP, though a clear deadline was shelved for now. With the US outmanoeuvered, the economic power game entered a second stage in Myanmar this week where ASEAN hosted the East Asia Summit in which both China and the US are members (with Beijing represented by Prime Minister Li Keqiang).


After APEC’s Revival, Now for The East Asia Summit

Interestingly Beijing saw the revival of APEC as a major platform for regional economic integration – led by China. APEC was actually the vehicle for trade liberalisation in the Asia Pacific since it was formed in 1989. Indeed, FTAAP is not a Chinese idea, as Singapore Prime Minister Lee Hsien Loong made clear, but an APEC vision conceived in 2004 as its end-goal of a huge free trade area of the Asia Pacific.


But APEC lost its shine over time when no clear big-power champion emerged with the visionary leadership and commitment of then President Bill Clinton who hosted the first summit in Seattle in 1993.


During APEC’s down-time years, ASEAN fell back on its own trade liberalisation process, the ASEAN Free Trade Area (AFTA), and preached the message of trade liberalisation to the wider region. Two major platforms then emerged: One is the TPP, for which the US took leadership with the exclusion of China. The other is the Regional Comprehensive Economic Partnership (RCEP), an outgrowth of the ASEAN Plus Three Summit comprising ASEAN’s three Northeast Asian trading partners China, Japan and South Korea as well as Australia, India and New Zealand.


China easily dominates the RCEP and insists that it be an East Asian platform – meaning it has no room for the US. This is partly the reason why the US is eager to have the TPP as the key pathway to reach the FTAAP.


While the RCEP and TPP evolve as competing platforms, both China and US have of late downplayed this rivalry. This is just as well for ASEAN whose members are divided between support for RCEP and for TPP. Only four out of the ten ASEAN members – Brunei, Malaysia, Singapore and Vietnam – are currently involved in the TPP negotiations which demand a higher standard of trade liberalisation. The RCEP, on the other hand sits better with many ASEAN members, virtually all of whom benefit from huge trade with China.