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As Trump era dawns, China moves to fill global leadership vacuum
[HONG KONG] China is moving after Donald Trump's election win to claim the mantle of the world's champion of free trade and the fight against climate change, prompting a melancholy warning from President Barack Obama that the US risks getting left behind in Asia.
Mr Obama met in Peru on Sunday with leaders of the 12-nation Trans-Pacific Partnership, a trade deal that Mr Trump vowed to kill on the campaign trail along with the Paris Agreement to tackle climate change. Mr Obama said that TPP members told him they want to move forward with the pact, "preferably" with the US.
"I believe that TPP is a plus for America's economy," Mr Obama told reporters while attending meetings of the Asia Pacific Economic Cooperation, the first major global summit since Mr Trump's win.
"Not moving forward would undermine our position across the region." China has wasted no time in seeking to reassure nations wary of a more protectionist US, with President Xi Jinping telling Apec leaders that he aimed to boost global trade and provide a level playing field for foreign companies.
Last week, China indirectly chided Mr Trump for his views on global warming, which he has called a Chinese hoax to hurt American manufacturing.
With TPP all but dead, many regional leaders are prioritising a China-backed alternative known as the Regional Comprehensive Economic Partnership. In a brief chat at Apec, Japanese Prime Minister Shinzo Abe - one of TPP's biggest proponents - told Mr Xi that he wanted to improve ties. Mr Abe had flown to New York last week to meet with Mr Trump to push the case for free trade.
"For years, China free-rode on America and Europe to make global rules and develop free trade," said Nick Mabey, who used to advise the UK government on climate issues and now runs E3G, a policy-research group. "Now China realises it needs to be more responsible for global rules because it needs that for its own development. They want stability globally so they can invest abroad while they manage the transition of their own economy."
Just months ago, it was the US pushing for China to respect the "rules-based" international order, chastising Beijing for ignoring the outcome of an arbitration court in The Hague that found its claims to most of the South China Sea had no legal basis. The ruling determined that China had "aggravated" tensions with other claimants and was seen as a set back for China's neighborhood diplomacy.
China is now using Mr Trump's victory to win back ground on the international stage. In Lima, Mr Xi touted the benefits of the 16-nation RCEP trade deal.
"We should deepen and expand cooperation in our region," Mr Xi said. "Any attempt to undercut or exclude each other must be rejected." Leaders of 21 Pacific Rim nations agreed over the weekend to continue working toward a regional free trade area and resist any shift toward protectionism. The 21-member group said the benefits of trade, investment and open markets required better explanation.
Mr Xi also called for "a smooth transition" to a new US administration. Mr Trump has blamed China for taking US jobs and has said he will instruct his treasury secretary to label the country a currency manipulator.
While China has long pushed for other countries to open up their markets, and has inked trade pacts with countries like Australia, the US has criticised Beijing for not opening up the economy more to foreign companies. Asian nations have also expressed concern about China's military clout and territorial ambitions.
Investing in China is very difficult, and RCEP is "low level" compared with the TPP, according to Jean-Pierre Cabestan, a professor in political science at Hong Kong Baptist University.
"China is taking advantage of the statements made by Mr Trump during the presidential campaign to occupy, if not monopolise, the high moral and political ground," Prof Cabestan said. "We will see on the ground which side will be fairer than the other. I continue to doubt that it will be China, because of the structure of its economy, the lack of transparency, of rule of law and the confusion between political and economic power."
Mr Obama said on Sunday that there were calls for a "less ambitious" trade agreement with fewer protections that the US wouldn't participate in. The TPP would go further than a traditional trade pact, including provisions on intellectual property, labor rights and state-owned company reform.
"TPP is not only a trade pact, it can also be seen as a geopolitical initiative," said Xie Tao, a professor of political science at Beijing Foreign Studies University. "If the US still wants to maintain its world No 1 position, it will have to play a leading role in promoting free trade. Giving up TPP potentially leads to giving up its trans-Pacific leadership role."
Some US allies aren't giving up just yet. While Mr Abe met with Mr Xi in Peru, last week he had called Mr Trump "a leader we can trust" after meeting the president-elect in New York. Australian Prime Minister Malcolm Turnbull also expressed hope that Mr Trump would eventually accept the TPP in some form.
For now, the demise of TPP in the US is "a big blow" to America's stature vis-a-vis China in shaping global trade policy, Eric Altbach, vice president at advisory firm Albright Stonebridge Group in Washington, said before the Apec meeting.
"We had our horse, the Chinese had their horse, but our horse has been put out to pasture and is no longer running in the race," said Mr Altbach, a former deputy assistant US trade representative for China affairs.
"It's a giant gift to the Chinese because they now can pitch themselves as the driver of trade liberalisation."