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APEC plaits economics and politics
12.11.14 13:38 Asia rising

From an Indian viewpoint, it is frustrating that the country is absent at the APEC Summit in Beijing. The point is, APEC is no longer an exclusive economic forum, as Australia might have conceived it a quarter century ago. It has transformed as a regional forum where critical questions of regional security and stability come up for discussion. India is the only major regional power that stands excluded from the cogitations of the ‘Indo-Pacific’. 

The ‘bilaterals’ that took place — or didn’t take place — on Monday on the sidelines of the APEC Summit in Beijing reveal so much about the undercurrent (and eddies) of regional security in East Asia. In sheer visibility, the meeting between Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe was head and shoulders above all other ‘bilaterals’ on Monday. 
However, that meeting was widely noted as a “chilly scene” — to borrow a New York Times deion. The ‘body language’ of the brief 25-minute meeting inevitably hogged attention. Indeed, nothing much by way of concrete results was expected from the meeting, which nonetheless was an important event in itself, signifying a ‘thaw’ in Sino-Japanese relations. 
There is probably room to speculate whether it was a full-fledged ‘thaw’ or a mere potential thaw or only the promise of a potential thaw and so on, but the meeting has certainly raised hopes for improvement in the relations between the two Far East adversaries, despite the palpable signs of strain hanging in the air. 
Abe harped on a new vision for the relationship, while Xi repeatedly harked back to historical issues and urged Tokyo to be mindful of Chinese sensitivities. A Xinhua commentary summed up that the “onus is now on Abe… to walk the talk” and to advance the detente process.  
The path ahead will not be easy for Abe because a huge adjustment is needed to cope with the shift in the dynamics of the relationship, borne out of China’s phenomenal rise and Japan’s struggle to maintain influence as a power that is inexorably in decline. 
Bloomberg draws a fine comparison between the China that Abe dealt with in 2006 in his first stint as prime minister (when he visited Beijing) and Xi’s China. Simply put, Japan no longer has the upper hand in comprehensive national power. (here). 
Besides, Xi’s meetings with leaders of other important regional states such as Thailand and Indonesia showed that it is China that the region sees as the principal driver of growth — and no longer Japan or the US. Connectivity, infrastructure development and trade and investment — these are the buzz words. 
Thus, the Thai Prime Minister Prayut Chan-o-Cha voiced strong support for China’s road map to develop the so-called R3A route as part of the North-South Economic Corridor, a road link leading from China’s Kunming, which crosses the Mekong River at Huay Xai in Laos and heads Chiang Khong in Thailand. Prayut told Xi that Bangkok also wants a dual-track rail link to be developed connecting Thailand, Laos and China. (here). 
Again, the Indonesian President Joko Widodo (”Jokowi”) told XI that his country wanted “concrete outcomes” in the relationship. Jokowi explained to the media later: “What I mean by concrete outcomes is that there should be more progress in the sectors of investment and trade. I’ve requested President Xi that Chinese state companies be involved more in the construction of our seaports, railways and toll roads. Infrastructure development is our most pressing issue. There should no longer be delays. The faster we build, the lower the cost. There should be political affirmation to speed them up. ”  
In substantive terms, Xi’s ‘bilaterals’ with his South Korean and Russian counterparts were the most productive. China and South Korea have concluded their FTA deal, bringing together an economic bloc that is the the biggest in Asia-Pacific (valued at $11 trillion). 
The give-and-take approach in the FTA negotiations is interesting and underscores the warm ties between China and South Korea. China gave in to South Korea’s demand that its agricultural sector needed protection from Chinese imports. 
The bilateral trade is expected to jump $70 billion overnight and reach $300 billion by end-2015. The FTA deal comes when Seoul is yet to decide whether to join the US-led Trans-Pacific Partnership pact. On the other hand, China is wooing South Korea to join the Asia-Pacific Free Trade Agreement, which it is promoting at the APEC Summit. 
The two ambitious projects are competing for space. The FTA deal with South Korea is China’s ninth bilateral FTA; another FTA is expected to be signed with Australia before the end of this year. 
The ties with Seoul have become extremely important for Beijing due to the strains in Japan-ROK relations. Abe and South Korean President Park Geun-hye have never held a meeting so far after coming to power. Equally, it is of interest to Beijing that Seoul discounts the zero sum argument that it must make a choice between China and the US. 
Having said that, China-ROK relations entail many large strategic consequences going beyond the matrix of overlapping economic and political interests. As the leading East Asia scholar at Brookings Institute, Jonathan Pollack wrote in a recent research paper, the growing ties between the two regional powers is “one of the most consequential changes in East Asian politics.”  
On the sidelines of the APEC Summit in Beijing yesterday, unsurprisingly, Xi’s meeting with Russian President Vladimir Putin also produced substantive outcome. China and Russia have signed another mega energy deal. Just as Europe is diversifying its sources for import of gas and hoping to cut down the energy dependence on Russian supplies, Moscow is diversifying its export markets by turning to China.
Clearly, apart from bolstering the Sino-Russian strategic partnership, the deal signed in Beijing yesterday also highlights Putin’s ‘pivot’ to Asia, which is predicated on the assessment that the chill in the country’s relations with the West is not going to dissipate in the foreseeable future. 
As regards Russian-American relations, to quote from an FT dispatch from Moscow, “Mr. Putin is under no illusion that things will get any easier. The next US president is almost certain to be more hawkish towards Russia than Barack Obama, who entered the White House seeking a hopeful reset of relations.” 
Therefore, it came as no surprise that Obama and Putin only had a “brief encounter” in Beijing yesterday and there was no substantive interaction on issues. The White House officials maintain that there are no plans for formal face-to-face talks either in Beijing or in the sidelines of the G20 in Brisbane later this week. Rather grim scenario, isn’t it, presaging a possible cascade of tensions over Ukraine? 
Ukraine also blights the promise of a bloom in Russia-Japan relations. This became evident in Beijing yesterday following a meeting between Abe and Putin. But then, there is a difference here from the Obama-Putin standoff. 
Abe and Putin make it a point to meet whenever and wherever they can, but strictly on the sidelines of international events. Japan’s G7 commitments over Ukraine-related sanctions against Russia prevent Tokyo from holding normal ‘bilateral’ with Moscow. 
Put differently, Abe and Putin are keen on taking the Russo-Japanese relations to a qualitatively new level (which also creates new elbow room for them in Asia-Pacific security), but they are helpless so long as Obama keeps saying ‘Nyet’ to Tokyo. 
Thus, it became clear after the Abe-Putin meeting yesterday that the expected visit to Japan by Putin (who is regarded highly in Tokyo as capable of steering the relationship to new heights) stands postponed indefinitely. 
Of course, what is Abe and Putin’s loss is gain for Beijing. Russia’s isolation from the West draws it much closer than ever historically to China. But the big question remains: Is Putin’s ‘pivot’ indeed for real signifying a strategic decision — or is it a merely tactical move pending a reset (some day) in Russia’s relations with the US? 
Indeed, much as Russian rhetoric about ties with China is resonant, a strong case can be made equally that the present bonhomie is not sustainable. (See a commentary in Huff Post). 
The fact of the matter is that for China, the relations with the US are of far greater significance than with any other country. And from recent indications, both Beijing and Washington are striving to ensure that the relationship does not become a strategic rivalry, spiraling downward. 
Beijing and Washington seem conscious of the need to “not only negotiate and renegotiate the boundaries of their power and influence, but also develop a shared understanding of their global roles and responsibilities.” (NYT). To be sure, the Xi-Obama ‘bilateral’ tomorrow — after all other APEC leaders have departed from Beijing  — will be the one to watch. 
 

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