Tue, 11 Dec 2018
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Kansas City

U.S. embraces protectionism, China decries it on world stage

By Sheetal Sukhija, Kansas City News
18 Nov 2018, 20:26 GMT+10

PORT MORESBY - Engaged in an intense trade war for nearly a year now, the world's two largest economies locked horns on the world stage this week, battling it out over their respective 'economic values' - forcing several other countries to pick sides.

While the U.S. side remained defiant over its policy of protectionism at the Asia Pacific Economic Co-operation (APEC) summit on Saturday, China touted its open and free trade policy, warning against any further escalation.

While several other countries across the world, especially close U.S. allies, have denounced the U.S. President Donald Trump's America First policy, many nations have also taken a cautious approach, so as to not appear as siding with China in the ongoing war over trade and investment and inadvertently bolster the country's growing economic clout.

Apart from trade, the two leading economies also engaged in a bitter war of words over regional security in the Asia Pacific - an issue that has increasingly placed China at odds with the other countries in the region and one that has provided the U.S. with an easy opportunity to act as a protector against Chinese aggression.

Over the last few months, the Trump Administration has increasingly enhanced its defence ties with certain southeast Asian nations, offered military support and has opened up its high-tech military hardware for smaller, poorer nations.

The U.S. has also challenged China's aggression dominance over the disputed South China Sea, by increasing 'International Freedom of Navigation' operations in the resource rich waterways, through which about $5 trillion in shipborne trade passes each year.

China claims the entire South China Sea as its own territory, even though its claims are contested by Brunei, Malaysia, the Philippines, Taiwan and Vietnam.

In addition, Washington has also managed to anger Beijing after approving arms sales to self-ruled Taiwan, which China claims as its own.

China attacks America's 'selfish agenda'

With multiple conflicts facing the two nations, the speeches delivered by the Chinese President Xi Jinping and the U.S. Vice President Mike Pence at the APEC summit were being watched closely by countries across the region and the world.

In his speech to leaders gathered in Papua New Guinea's capital, Port Moresby on Saturday, the Chinese President was largely seen as maintaining the reconciliatory tone that his country has used ever since its trade ties with the U.S. went awry earlier this year.

China has refrained from initiating any provocative moves against the U.S., but has fought back tooth and nail, mirroring the trade tariffs and repeatedly warning Washington over harsh inward looking policies, that it claims will leave no winners.

Jinping repeated the warning, albeit carefully, only attacking the practice of protectionism, making only veiled swipe at Trump's America First policy, without mentioning his U.S. counterpart or the country itself.

The Chinese President warned that countries which embrace protectionism are "doomed to failure."

He then took a direct aim, warning the U.S. against any further escalation of tensions between the two countries.

Jinping said, "History has shown that confrontation, whether in the form of a cold war, a hot war or a trade war, will produce no winners. Attempts to erect barriers and cut close economic ties work against the laws of economics and the trends of history. This is a short-sighted approach and it is doomed to failure."

He further warned that those who close their doors "will only cut himself off from the rest of the world and lose his direction."

Criticizing the "America First" trade protectionism, Jinping urged countries to pursue free trade policies and "say no to protectionism and unilateralism."

He stressed that global trade rules should not be applied "with double standards or selfish agendas," and pointed out that economic protectionism is overshadowing global growth.

Adding that the world should "uphold the WTO-centered multilateral trading system, make economic globalization more open, inclusive, balanced and beneficial to all."

Jinping said, "We believe that there exist no issues that countries cannot resolve through consultation, as long as negotiations take place in a spirit of equality and mutual understanding."

He also offered a detailed defense of his country's ambitious "Belt and Road" infrastructure initiative that is aimed at expanding land and sea links between Asia, Africa and Europe with billions of dollars in infrastructure investment.

Jinping's massive project has faced intense attacks in recent months, with critics calling it "chequebook diplomacy to further Chinese interests in the region."

Jinping however argued, "It is not designed to serve any hidden geopolitical agenda, it is not targeted against anyone and it does not exclude anyone... nor is it a trap as some people have labelled it."

'America won't change, China should'

Later in the day, the U.S. Vice President Mike Pence addressed the CEOs and diplomats from the nations gathered at the summit and used his speech to further Trump's rhetoric and agenda - launching several direct attacks at China.

Pence responded to Jinping's warning against escalating tensions by threatening more tariffs against China.

In his statement, Pence clarified that the U.S. would not back down, instead warned of more tariffs.

The U.S. Vice President said, The United States though will not change course until China changes its ways. We have taken decisive action to address our imbalance with China. We put tariffs on $250 billion in Chinese goods, and we could more than double that number."

The Trump administration, which has so far imposed tariffs on $250 billion worth of Chinese imports, has laid out a list of demands that would change the terms of trade between the two countries.

However, China has responded with tit-for-tat import tariffs on U.S. goods.

Offering no compromise, Pence reiterated the U.S. demand that China improve market access and intellectual property protections for American companies, cut industrial subsidies and slash a $375 billion trade gap.

Attacking the country, Pence said, China has taken advantage of the United States for many years. Those days are over."

However, the warning by Pence to escalate the trade war came a day after Trump made contrasts remarks, telling reporters on Friday that he said he may not impose more tariffs.

Trump's statement came after China reportedly sent a list to the U.S., highlighting the measures it was willing to take to resolve trade tensions.

Meanwhile, in his speech, Pence also attacked Chinas territorial ambitions in the Pacific and said that the U.S. would work to help protect maritime rights.

Pence said, We will continue to fly and sail where ever international law allows and our interests demand. Harassment will only strengthen our resolve.

Mocking China's Belt and Road Initiative, Pence said, We dont offer constricting belts or a one-way road."

Pence said that APAC countries should not accept debt that compromised their sovereignty and said, 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 that the terms of China's loans were "opaque at best" and "too often, they come with strings attached and lead to staggering debt."

Making America's case, Pence said, "We don't drown our partners in a sea of debt We don't coerce, corrupt, or compromise your independence. The United States deals openly and fairly."

Later in his speech, Pence also pointed out that the U.S. wanted a "better relationship" with China, if it respects its neighbours' sovereignty, embraced "free, fair and reciprocal trade" and its human rights record.

During the summit, Pence also rebuked China by meeting with the representative from Taiwan and even announced the U.S. would join hands with Australia to develop a new naval base.

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