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Free trade

Apec meeting to highlight increasing rivalry between China and US

China's President Xi Jinping speaking during the virtual Apec CEO meeting.
China's President Xi Jinping speaking during the virtual Apec CEO meeting. REUTERS - LIM HUEY TENG

The two-yearly Asia Pacific Economic Cooperation summit opens in Kuala Lumpur on Friday, bringing together leaders from the 21 Apec member states, home to some 3 billion people. The group aims to create the biggest free trade zone the world has ever known. But frictions between China and the US, and the ongoing Covid-19 pandemic cast a long shadow. 

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On the eve of the summit, Chinese president Xi Jinping called on member states to “work together” and warned against “protectionism”.

The Chinese leader spurned suggestions that his country might separate itself from the US and other trading partners amid tension with Washington and Europe over technology and security.

In his speech on 19 November, Xi warned against allowing the Covid-19 pandemic damage the world economy, which faces additional risks because of “mounting unilateralism, protectionism and bullying, as well as backlash against economic globalisation”.

Boasting that China had managed to bring its economy “back to normal,” Xi promised that “China will not reverse course or run against historical trends by ‘decoupling’ or forming a small circle to keep others out."

Apec members in green. 21 members are home to more than a third of the world's population.
Apec members in green. 21 members are home to more than a third of the world's population. © Wikimedia commons

Speaking by video link from Beijing to a meeting of Asia-Pacific CEOs, Xi also promised to open China’s market wider but announced no initiatives to respond to complaints that the ruling Communist Party improperly subsidises and shields technology and other industries from foreign competitors.

Xi rejected suggestions Beijing might respond to US sanctions on its fledgling technology companies by trying to separate their industries from global trading partners. 

The ruling Communist Party has promoted its own standards for mobile phones and other technology, which would encourage customers that adopt them to use Chinese suppliers. That has prompted fears world markets might split into smaller segments with incompatible industry standards, hurting productivity.

Largest free trade agreement

Thursday's event came ahead of a meeting of Asia-Pacific Economic Cooperation leaders hosted by Malaysia. The meeting on Friday is due to be conducted via video conference because of the pandemic.

Xi's comments followed Sunday's signing of the world's largest free trade agreement, the Regional Comprehensive Economic Partnership (RCEP), by Beijing and 14 other Asian neighbours.

The Chinese-initiated RCEP appeals to other developing countries because it reduces barriers to trade in farm goods, manufactured products and components, which make up most of their exports. It says little about trade in services and access for companies to operate in each other’s economies, which the United States and other developed countries want.

The Trump administration has cut off Chinese tech giant Huawei’s access to most US components and technology on security grounds. Washington has shut Huawei and a rival Chinese telecom equipment vendor, ZTE, out of the US market. The White House is pressing the Chinese owner of video service TikTok to sell its US operation, which American officials say is a security risk.

Trump was expected to take part in the Apec meeting on Friday.

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