US and China avoid contentious issues at the APEC meeting

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Where China and US disagreed

While the United States and China did make progressive announcements in the area of climate change and military cooperation at the Asia-Pacific Economic Cooperation (or APEC) meeting held in China recently, there were some areas of disagreement. There were also some stones that were left unturned.

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Trade deals

As touched upon in Part 3 of this series, during the meeting, Chinese President Xi Jinping urged APEC’s 21 members to move toward a Free Trade Area of the Asia-Pacific (or FTAAP). He proposed that members study the idea over the next two years, and then join.

Meanwhile, US has been waiting for China to join its 12-nation Trans-Pacific Partnership. This leaves both countries in a pickle, as the treaties seem to stand in contrast to one another.

Indeed, the new Chinese-designed institutions, such as the Asian Infrastructure Investment Bank (or AIIB), the Asia-Pacific Free Trade Area, and an Asian security architecture, have given rise to a predicament. Why? Because all of these institutions compete with pre-existing or proposed institutions led by the US or other countries in the region. For example, the US has actively opposed the establishment of the AIIB, viewing it as a challenge to the US- and Japan-supported Asian Development Bank.

Stones unturned

Both China and the US decided to steer clear of more contentious issues at the meeting. Accordingly, the disputes over Hong Kong and cyber space were not even brought up.

While China seems convinced that the US has a hand in the pro-democracy protests in Hong Kong (EWH), the US is no closer to accepting China’s territorial claims on the island than it was before.

On the cyber front, government officials in the US (SPY) (IVV) and India (EPI) have linked various attacks on corporate and infrastructure computer systems in their country to computers in China. Meanwhile, China (FXI) denies all accusations of cyber warfare.

Most of the focus of this year’s APEC meeting was on developments and announcements involving the United States and China. But there were also some important agreements reached between China and Russia, and China and Japan ahead of the meeting, as you’ll discover in the next part of this series.

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