The 2017 APEC Summit: A Game Changer for the Asia-Pacific?


November 16, 2017

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Number 405 | November 15, 2017

ANALYSIS

The 2017 APEC Summit: A Game Changer for the Asia-Pacific?

By Le Dinh Tinh

One of the most important diplomatic, political, and economic events for the Asia-Pacific region this year – the APEC Summit – was held in Da Nang, Viet Nam (November 6-11, 2017). Amid the fast changing geostrategic context and domestic situation in a number of countries, the APEC Leader’s week may have been a game changing moment for the Asia-Pacific region for a number of reasons.

First, APEC is the premier forum in the region to facilitate the realization of the development goals set forth by the United Nations. Home to around 2.8 billion people, approximately 59 percent of world GDP and 49 percent of world trade, APEC includes the world’s biggest economies, such as the US, China, Japan, ASEAN, and thus has the potential to make important economic contributions to the region – and the world. APEC could help to promote economic development in the region in many important ways. Even though the Asia Pacific is the fastest-growing region at a time when the world economy is witnessing positive growth, there are lurking risks such as inward-looking policies of many countries, aging populations, as well as traditional and emerging security challenges. With the focus on “creating new dynamism, fostering a shared future,” the 2017 APEC under the host of Viet Nam proposed four areas for cooperation: a) sustainable, innovative and inclusive growth; b) regional economic integration and connectivity; c) dynamism for micro, small, and medium-sized enterprises (MSMEs) – a key driver of the region’s growth; and d) food security and achieving sustainable agriculture. Topics of discussion also included improving work force skills to meet the new demand for the fourth industrial revolution, reducing income gaps and, and promoting inclusive and equitable development. The Danang Declaration – unanimously adopted at the Summit – reaffirmed all these and called them “long-standing commitments” by all member economies. Similarly, the dramatic revival of the Trans Pacific Partnership Agreement talks (now changed to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) after intensive negotiations in Danang has helped tighten an embrace of “high-stardard,” “balanced,” “free,” and “fair” game of trade for concerned stakeholders.

Second, the APEC Summit provides an opportunity for regional economies to make their priorities better known to each other, thus boosting trust and cooperation. Through high-level interaction, the US and China, whose relationship is a crucial factor shaping the region’s geopolitical landscape, identified measures to address new realities. On the one hand, US policy toward the Asia Pacific, despite a rough start, has gained clarity, especially on the security-defense side. Soon after his arrival in Danang, President Trump delivered a speech promoting the idea of a “free and open Indo-Pacific”, with significant implications both for the regional architecture and the US future ties with allies and partners. On the other, China has become more confident internationally owing to its rise in both capacity and determination. Many argue that China has eased and even dropped the long-time brake on its strategy of “tao guang yang hui” (hide one’s capabilities and bide one’s time). An American scholar Michael Pillsbury has gone further by stating that China’s international strategy is already effective both at present and in the longer term. President Xi called globalization an “irreversible historical trend”, affirming China’s place as a leader in the trend. Japan, South Korea, and Australia – important members of APEC – have recently played more active roles in regional affairs. These new-found strategic contours give birth to a hope that following the meetings in Viet Nam, the United States, China, and other powers will be able to make necessary adjustments to their new postures for the larger interests of the region.

Third, at the APEC Summit, for the first time ASEAN leaders had a dialogue with APEC members’ heads of delegation. This is a testament to both ASEAN and APEC’s continued aspirations for a wider community of cooperation. APEC, like ASEAN, constitutes a significant building block for the region’s deeper integration and connectivity. ASEAN has endeavored to keep its centrality in the regional architecture, one with values shared by APEC, such as open regionalism and inclusiveness. The Association is however facing new challenges. ASEAN fears of a regional lack of unity are starting to become a reality. The principle of consensus that has helped ASEAN in the past now raises questions about the organization’s effectiveness. The last ASEAN Foreign Ministers meeting in Manila, for example, showed that to a certain extent reaching unanimity on vital issues like the South China Sea has become harder. Against this backdrop, the 2017 APEC, with its agenda on practical cooperation and community-building, and its multilateralism, should be a naturally complementary process for ASEAN.

For all of these reasons the November 2017 APEC Summit came at a critical time and has the potential to make important contributions. Da Nang – a beautiful coastal city in central Vietnam – provided an ideal venue for dialogue between leaders from member economies. In early October, advance teams from 21 economies expressed their satisfaction with Vietnam’s preparatory work. This same positive feeling was also witnessed when the Summit’s most important moment – the Leaders’ Meeting Retreat – ended on November 11. US President Donald Trump’s attendance bodes well for regional cooperation, and adds clarity to US policy toward the region. Unlike many past US presidential trips to Asia, President Trump’s took place in the first year of his administration. Chinese President Xi Jinping also drew a lot of attention because the meeting took place not long after China’s 19th Party Congress. The region wanted to know Beijing’s major policy lines for the new term as could be seen in President Xi’s numerous sideline meetings, and Vietnam was the first foreign country President Xi visited. Russia, Japan, Canada, South Korea, and Australia (an APEC founding member) certainly took APEC seriously with their respective agreement on the host country’s proposed agenda. As for ASEAN, with the presence of Secretary General Le Luong Minh, it was able to seize the opportunity to cement its solidarity and the working principles that have brought about its successes in the last five decades.

The 2017 APEC Summit presents a key medium for regional stakeholders to tackle current problems and promote better understanding. APEC’s consensus-based approach, broad inclusiveness, and efficient platform for numerous multilateral and bilateral meetings make the venue important. Cooperative programs within the APEC framework may be either substantive or symbolic, but given all the present challenges and needs, both  are valuable for the region.

About the Author

Le Dinh Tinh, PhD, is a Senior Fellow at the Diplomatic Academy of Vietnam. He can be contacted at tinhiir@gmail.com.

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Remarks by President Trump on His Trip to Asia (Full Text)


November 16, 2017

Remarks by President Trump on His Trip to Asia

Source: The White House, Washington DC

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“I explained to all of the world leaders, and across Asia, how well the United States is doing. Economic growth has been over 3 percent the last two quarters and is going higher. Unemployment is at its lowest level in 17 years. The stock market has gained trillions of dollars in value since my election and has reached record highs. We are massively increasing our military budget to historic levels .–President Donald J. Trump

 

Last night, I returned from a historic 12-day trip to Asia. This journey took us to five nations to meet with dozens of foreign leaders, participate in three formal state visits, and attend three key regional summits. It was the longest visit to the region by an American President in more than a quarter of a century.

Everywhere we went, our foreign hosts greeted the American delegation, myself included, with incredible warmth, hospitality, and most importantly respect. And this great respect showed very well our country is — further evidence that America’s renewed confidence and standing in the world has never been stronger than it is right now.

When we are confident in ourselves, our strength, our flag, our history, our values — other nations are confident in us. And when we treat our citizens with the respect they deserve, other countries treat America with the respect that our country so richly deserves.

During our travels, this is exactly what the world saw: a strong, proud, and confident America.

Today, I want to update the American people on the tremendous success of this trip and the progress we’ve made to advance American security and prosperity throughout the year.

When I came into office, our country was faced with a series of growing dangers. These threats included rogue regimes pursuing deadly weapons, foreign powers challenging America’s influence, the spread of the murderous terror group ISIS, and years of unfair trade practices that had dangerously depleted our manufacturing base and wiped out millions and millions of middle-class jobs.

The challenges were inherited, and these products really showed what previous mistakes were made over many years — and even decades — by other administrations. Some of these mistakes were born of indifference and neglect. Others from naïve thinking and misguided judgement. In some cases, the negative influence of partisan politics and special interests was to blame. But the one common thread behind all of these problems was a failure to protect and promote the interests of the American people and American workers.

Upon my inauguration, I pledged that we would rebuild America, restore its economic strength, and defend its national security. With this goal in mind, I vowed that we would reaffirm old alliances and form new friendships in pursuit of shared goals. Above all, I swore that in every decision, with every action, I would put the best interests of the American people first.

Over the past 10 months, traveling across the globe and meeting with world leaders, that is exactly what I have done.

Earlier this year, in Saudi Arabia, I spoke to the leaders of more than 50 Arab and Muslim nations about our strategy to defeat terrorists by stripping them of financing, territory, and ideological support. And I urged the leaders to drive out the terrorists and extremists from their societies. Since that time, we have dealt ISIS one crushing defeat after another.

In Israel, I reaffirmed the unbreakable bond between America and the Jewish State, and I met with leaders of the Palestinian Authority and initiated an effort to facilitate lasting peace between the Israelis and the Palestinians.

In Brussels, I urged our NATO allies to do more to strengthen our crucial alliance and set the stage for significant increases in member contributions. Billions and billions of dollars are pouring in because of that initiative. NATO, believe me, is very happy with Donald Trump and what I did.

In Warsaw, I declared to the world America’s resolve to preserve and protect Western civilization and the values we hold so dear.

In Rome, Sicily, Hamburg, and Paris, I strengthened our friendships with key allies to promote our shared interests of security and prosperity.

In September, at the United Nations General Assembly in New York, I urged that the nations of the world join in confronting rogue regimes that threaten humanity and laid out a model for international cooperation grounded in respect for sovereignty and the responsibilities that come with it.

On each trip, I have worked to advance American interests and leadership in the world.

And to each of these places, I have carried our vision for a better — a vision for something stronger and sovereign — so important — sovereign and independent nations, rooted in their histories, confident in their destinies, and cooperating together to advance their security, prosperity, and the noble cause of peace.

It was this same vision that I carried to Asia two weeks ago. And it was this same commitment to you, the American people, that was always at the forefront of my mind and my thinking.

Our trip was defined by three core goals. First: to unite the world against the nuclear menace posed by the North Korean regime, a threat that has increased steadily through many administrations and now requires urgent action.

Second: to strengthen America’s alliances and economic partnerships in a free and open Indo-Pacific, made up of thriving, independent nations, respectful of other countries and their own citizens, and safe from foreign domination and economic servitude.

And third: to finally — after many years — insist on fair and reciprocal trade. Fair and reciprocal trade — so important. These two words — fairness and reciprocity — are an open invitation to every country that seeks to do business with the United States, and they are a firm warning to every country that cheats, breaks the rules, and engages in economic aggression — like they’ve been doing in the past, especially in the recent past.

That is why we have almost an $800-billion-a-year trade deficit with other nations. Unacceptable. We are going to start whittling that down, and as fast as possible.

With these goals, it was my profound honor to travel on this journey as your representative. I explained to all of the world leaders, and across Asia, how well the United States is doing. Economic growth has been over 3 percent the last two quarters and is going higher. Unemployment is at its lowest level in 17 years. The stock market has gained trillions of dollars in value since my election and has reached record highs. We are massively increasing our military budget to historic levels. The House has just passed a nearly $700 billion defense package, and it could not come at a better time for our nation.

Once again our country is optimistic about the future, confident in our values, and proud of our history and a role in the world.

I want to thank every citizen of this country for the part you have played in making this great American comeback possible. In Asia, our message was clear and well received: America is here to compete, to do business, and to defend our values and our security.

We began our trip in Hawaii to pay our respects to brave American service members at Pearl Harbor and the United States Pacific Command, the guardian of our security and freedom across the Indo-Pacific region.

As our country prepared to observe Veterans Day, we remembered the incredible sacrifices and courage of all of the veterans whose service has preserved our liberty and a way of life that is very special. We also thanked military families for their support for our brave servicemen and women.

From Hawaii, we traveled to Japan, a crucial U.S. ally and partner in the region . Upon landing in Japan, my first act was to thank the American service members and Japanese Self-Defense Forces who personify the strength of our enduring alliance.

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Prime Minister Abe and I agreed on our absolute determination to remain united to achieve the goal of denuclearized North Korea. Shortly following our visit, Japan announced additional sanctions on 35 North Korean entities and individuals. Japan also committed to shouldering more of the burden of our common defense by reimbursing costs borne by American taxpayers, as well as by making deep investments in Japan’s own military. This will include purchases of U.S. advanced capabilities — from jet fighters to missile defense systems worth many, many billions of dollars — and jobs for the American worker.

The Prime Minister and I also discussed ways we can deepen our trade relationship based on the core principles of fairness and reciprocity. I am pleased that since January of this year, Japanese companies have announced investments in the United States worth more than $8 billion — 17,000 jobs. Thank you.

Oh, they don’t have water? That’s okay. What? That’s okay.

(Drinks water.)

THE PRESIDENT: Japanese manufacturers, Toyota and Mazda, announced that they will be opening a new plant in the United States that will create 4,000 jobs.

We also signed agreements between our nations to enhance infrastructure development, increase access to affordable energy, and advance our foreign policy goals through economic investment.

From Japan, we traveled to another key American ally in Asia — the Republic of Korea. My official state visit to South Korea was the first by an American President in 25 years.

Speaking before the National Assembly of the Republic of Korea, I spoke the truth about the evil crimes of the North Korean regime, and I made clear that we will not allow this twisted dictatorship to hold the world hostage to nuclear blackmail.

I called on every nation, including China and Russia, to unite in isolating the North Korean regime — cutting off all ties of trade and commerce — until it stops its dangerous provocation on — and this is the whole key to what we’re doing — on denuclearization. We have to denuclearize North Korea.

We have ended the failed strategy of strategic patience, and, as a result, we have already seen important progress — including tough new sanctions from the U.N. council — we have a Security Council that has been with us and just about with us from the beginning.

South Korea agreed to harmonize sanctions and joined the United States in sanctioning additional rogue actors whose fund and funds have helped North Korea and North Korea’s nuclear and ballistic missile programs. It’s unacceptable to us.

The United States welcomed the decision of President Moon to remove the payload restrictions on missiles to combat the North Korean threat. And together we reaffirmed our commitment to a campaign of maximum pressure.

Like Japan, South Korea is increasing its defense contributions. During our meetings, President Moon acknowledged his desire for equitable cost-sharing for the United States military forces stationed in South Korea. And I visited soldiers at Camp Humphreys, a brand-new, joint American-South Korean base, paid for almost entirely by the South Korean government. At that base, I discussed with the United States and South Korean military leaders both military options and readiness to respond to North Korean provocation or offensive actions.

During our visit, President Moon and I also discussed America’s commitment to reducing our trade deficit with South Korea. At my discretion and direction, we are currently renegotiating the disastrous U.S.-Korea trade agreement signed under the previous administration. It has been a disaster for the United States.

Last week, 42 South Korean companies announced their intent to invest in projects worth more than $17 billion dollars in the United States, and 24 companies announced plans to purchase $58 billion dollars in American goods and services.

From South Korea, Melania and I traveled to China, where, as in Japan and South Korea, we were greatly honored by the splendor of our reception. Our trip included the first official dinner held for a foreign leader in the Forbidden City since the founding of the modern China, where we enjoyed a very productive evening hosted by President Xi and his wonderful wife, Madam Pung.

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During our visit, President Xi pledged to faithfully implement United Nations Security Council resolutions on North Korea and to use his great economic influence over the regime to achieve our common goal of a denuclearized Korean Peninsula.

President Xi recognizes that a nuclear North Korea is a grave threat to China, and we agreed that we would not accept a so-called “freeze for freeze” agreement like those that have consistently failed in the past. We made that time is running out and we made it clear, and all options remain on the table.

I also had very candid conversations with President Xi about the need to reduce our staggering trade deficit with China and for our trading relationship to be conducted on a truly fair and equitable basis. We can no longer tolerate unfair trading practices that steal American jobs, wealth, and intellectual property. The days of the United States being taken advantage of are over.

In China, we also announced $250 billion worth in trade-investment deals that will create jobs in the United States.

From China, I flew to the city of Da Nang in Vietnam, to attend the Leaders Meeting for APEC — Asia Pacific Economic Cooperation. There, I spoke to a major gathering of business leaders, where I reminded the world of America’s historic role in the Pacific as a force for freedom and for peace.

Image result for President Trump at APEC DanangU.S. President Donald Trump speaks on the final day of the APEC CEO Summit on the sidelines of the Asia-Pacific Economic Cooperation (APEC) leaders’ summit in Danang, Vietnam, Friday, Nov. 10, 2017. (Photo | Associated Press)

 

Standing on this proud history, I offered our vision for robust trading relationships in which Indo-Pacific nations can all prosper and grow together. I announced that the United States is ready to make bilateral trade deals with any nation in the region that wants to be our partner in fair and reciprocal trade.

We will never again turn a blind eye to trading abuses, to cheating, economic aggression, or anything else from countries that profess a belief in open trade, but do not follow the rules or live by its principles themselves.

No international trading organization can function if members are allowed to exploit the openness of others for unfair economic gain. Trade abuses harm the United States and its workers — but no more. No more.

We will take every trade action necessary to achieve the fair and reciprocal treatment that the United States has offered to the rest of the world for decades.

My message has resonated. The 21 APEC leaders — for the first time ever — recognized the importance of fair and reciprocal trade, recognized the need to address unfair trade practices, and acknowledged that the WTO is in strong need of reform. These leaders also noted that countries must do a better job following the rules to which they agreed.

I also made very clear that the United States will promote a free and open Indo-Pacific in which nations enjoy the independence and respect they deserve.

In Vietnam, during a state visit in Hanoi, I also met with President Quang and Prime Minister Fook to discuss the growing friendship between our countries. Our Vietnamese partners are taking new actions to enforce sanctions on North Korea. In addition, we committed to expand trade and investment between our countries, and we pledged to address the imbalances. I am particularly pleased that the United States and Vietnam recently announced $12 billion in commercial agreements, which will include $10 billion in U.S. content.

 

Finally, I visited the Philippines, where I met with numerous world leaders at the U.S.-ASEAN and East Asia Summits. At ASEAN — the Association of Southeast Asian Nations — we made it clear that no one owns the ocean. Freedom of navigation and overflight are critical to the security and prosperity of all nations.

I also met with the Prime Ministers of India, Australia, and Japan to discuss our shared commitment to a free and open Indo-Pacific.

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During our visit, President Duterte of the Philippines thanked the American people and our armed forces for supporting the recent liberation of Marawi from ISIS. We pledged to strengthen and deepen our long-standing alliance.

At the East Asia Summit, the United States negotiated and signed four important leaders’ statements on the use of chemical weapons, money laundering, poverty alleviation, and countering terrorist propaganda and financing.

And crucially, at both summits and throughout the trip, we asked all nations to support our campaign of maximum pressure for North Korean denuclearization. And they are responding by cutting trade with North Korea, restricting financial ties to the regime, and expelling North Korean diplomats and workers.

Over the last two weeks, we have made historic strides in reasserting American leadership, restoring American security, and reawakening American confidence.

Everywhere we went, I reaffirmed our vision for cooperation between proud, independent and sovereign countries — and I made clear that the United States will be a reliable friend, a strong partner, and a powerful advocate for its own citizens.

The momentum from our trip will launch us on our continued effort to accomplish the three core objectives I outlined: to unite the world against North Korean nuclear threat, to promote a free and open Indo-Pacific region, and to advance fair and reciprocal economic relations with our trading partners and allies in the region.

We have established a new framework for trade that will ensure reciprocity through enforcement actions, reform of international organizations, and new fair trade deals that benefit the United States and our partners.

And we have laid out a pathway toward peace and security in our world where sovereign nations can thrive, flourish, and prosper side-by-side.

This is our beautiful vision for the future. This is a where this vision — this dream — is only possible if America is strong, proud, and free.

As long as we are true to ourselves, faithful to our founding, and loyal to our citizens, then there is no task too great, no dream too large, no goal beyond our reach.

My fellow citizens: America is back. And the future has never looked brighter.

Thank you. God Bless you and God Bless the United States of America. Thank you very much. Thank you. Thank you all.

Asia Trip: President Donald Trump reports to The American People


November 16,2017

Asia Trip: President Donald Trump reports to The American People

– President Trump Delivers Statement on Asia Trip – President Trump Delivers Remarks to the American People, November 15, 2017–The White House, Washington D.C

Full Text of President’s Statement to follow when it is available.–Din Merican

CNN Reports:

In Asia, Trump again finds success overseas easier than at home

China’s Neighbourhood Diplomacy in Full Swing


November 15, 2017

China’s Neighbourhood Diplomacy in Full Swing

By Zhong Feiteng

Source:http://www.globaltimes.cn

With the 19th National Congress of the Communist Party of China (CPC) having concluded, Chinese leaders kicked off visits to Southeast Asia, an important move in China’s neighborhood diplomacy as socialism with Chinese characteristics has entered a new era.

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President Xi Jinping with Cambodia’s Prime Minister Samdech Techo Hun Sen

From Friday to Tuesday, Chinese President Xi Jinping attended the Asia-Pacific Economic Cooperation (APEC) CEO Summit, APEC Economic Leaders’ Meeting and paid state visits to Vietnam and Laos. On Sunday, Premier Li Keqiang arrived in Manila for an official visit to the Philippines and a series of leaders’ meetings on East Asian cooperation. Choosing Southeast Asia as the first destination of diplomatic attention after the 19th CPC National Congress drew extensive international interest.

During the 19th CPC National Congress, two major diplomatic tasks for China were proposed: Forging a new form of international relations featuring mutual respect, fairness, justice, and win-win cooperation; and building a community with a shared future for mankind.

These two major tasks are the new interpretation of China’s international relations in the new era, and they are also the philosophy underpinning China’s diplomacy as a major country.

From a big country to a great one: Although the adjectives are synonymous, the connotation varies greatly. As a great nation, we should not only provide the world with substantial goods, we also need to create new ideological pillars for the peace and development of the world. At the 19th CPC National Congress, new diplomatic concepts, ideas and strategies were put forward.

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In the structure of China’s diplomacy, the periphery is prioritized. Compared with other big powers, China is the country with the largest number of neighbors, including 14 nations sharing land borders and eight others across the sea. No other major country has such a geopolitical environment. The US has only two land neighbors: Mexico and Canada. Therefore, its diplomacy often emphasizes international instead of peripheral strategies.

Since the founding of the People’s Republic of China, and especially since the start of reform and opening-up, the stable neighborhood has gradually become a significant part of China’s diplomacy. Entering the 21st century, Chinese leaders regard the country’s neighborhood as an important reference zone for China’s peaceful development. An overall concept of the neighboring regions has gradually taken shape and become an essential part of the diplomacy of a major country with Chinese characteristics. From a diplomatic perspective, the economies on China’s periphery are prominent in the global economy.

First, in terms of the periphery of China’s diplomatic vision, the total economy is in the rise. Its total share in the global economy has increased by an average of 1 percentage point annually over the past 10 years and currently accounts for about 31 percent of global output.

Second, the region’s rising proportion of the world economy is mainly due to China. India’s growth momentum over the past few years is impressive, but its economy remains far below China’s economy as measured by size. China’s economy as a percentage of the neighboring economies will rise to 45.9 percent in 2017 before climbing above 50 percent by 2022.

Third, neighboring economies and China have become a major driver of global GDP growth. According to the IMF’s World Economic Outlook published in October, the global economy is projected to grow 3.6 percent in 2017, its best performance since 2012. It’s expected to record 3.7 percent growth in 2018. The IMF raised its China growth forecast for this year to 6.8 percent from 6.7 percent. The combined GDP of five ASEAN members – Indonesia, Malaysia, the Philippines, Singapore and Thailand – will increase by 4.9 percent in 2018.

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Singapore’s Prime Minister Lee Hsien Loong with Presdent Xi

As such, seizing opportunities in China and its neighboring economies is to some extent like capitalizing on the opportunities of future global economic growth. China’s economic development will play a particularly significant part in powering world economic growth. “In the next 15 years, China will have an even larger market and more comprehensive development. It is estimated that China will import $24 trillion worth of goods, attract $2 trillion inbound direct investment and make $2 trillion of outbound investment. ” Xi said Friday at the APEC CEO Summit in Da Nang, according to the Xinhua News Agency.

The vision is a promise for the world from China as well as a signal of China’s confidence in the outlook for its own economy and the entire Asian region.

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“China has, as always, given priority to its relations with ASEAN in neighborhood diplomacy and is committed to being ASEAN’s good friend and good neighbor who can work together to tide over difficult times and strive for a community of shared future with common ideals, prosperity and responsibility,” Li said Monday at the 20th China-ASEAN (10+1) leaders’ meeting in Manila, according to the Xinhua News Agency.

Following the 19th Party Congress, China is seeking to send signals while pushing forward with its neighborhood diplomatic initiatives: China will respect and advance an array of agreements it has reached with Southeast Asian countries, and it will also continue and deepen cooperation with these countries in the fields of security, trade and humanity.

That is to say China’s neighborhood diplomacy will be largely stable, while being given more importance as its goals are fleshed out.

The author is a research fellow with the National Institute of International Strategy at Chinese Academy of Social Sciences.

An American Bull in Asia’s China Shop


November 14, 2017

An American Bull in Asia’s China Shop

By: Asia Sentinel editors

https://www.asiasentinel.com/politics/donald-trump-asia/

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The Donald Trump wrecking ball has now completed its swath across Asia, from Saudi Arabia to Japan. It began on May 20 when he chose Riyadh, the capital of the medieval kingdom and ground zero of Muslim extremism, as his first overseas visit after taking office and has ended with his now-concluded 12 day swing and his embrace of the Philippines’ murderous president Rodrigo Duterte. He took time out to outrage the US’s intelligence community by his fawning embrace of former KGB Colonel Vladimir Putin, who, wide-eyed, told Trump he had nothing to do with sabotaging the US election that brought Trump to power.

Thus far the results have been more dangerous in West Asia, where the young Saudi de facto ruler Prince Mohamed bin Salman has since embarked on confrontations with Iran in Yemen and now Lebanon, actions which appear to please few other than Israeli Prime Minister Benyamin Netanyahu’s expansionist government.

In east Asia on the other hand, the reaction to Trump has been to gasp at his gaffes and empty rhetoric and try to carry on as though he did not exist. So far the only damage has been to the US itself as it sees the policies of 70 years which have so benefited trade and prosperity in the US itself as well as much of Asia viewed as contrary to US interests. For Trump it appears that the only free trade he wants is ability to plant Trump Towers everywhere from Riyadh to Bali to Manila via Moscow.

The record of the President‘s Asian tour was indeed remarkable, leaving a string of Asian leaders agog at his superficiality. Shinzo Abe was suitably flattering and took him golfing. But the highlight of the visit was a meal which proved that the Donald had little taste for his host nation’s acclaimed foods but needed a large cheeseburger of US-produced beef and cheese to keep him going while Abe looked on, bemused. On trade issues, which he says are so important, nothing significant transpired, with the President focusing on the art of the deal across Asia rather than the structural reforms that the trade regime needs.

China did even better in flattering him with a display of pomp which would give credit to an ancient empire, with Xi Jinping as emperor – an emperor whose growing power is sending tremors throughout the rest of Asia.  But again Trump came home empty-handed on trade.  Promises of US$250 billion of imports to China may well be built on sand. Commercial sales announced totalled US$65 million, many involving goods that Chinese companies buy routinely. Others were merely memorandums of understanding.

A Chinese decision to ease foreign access to financial markets appears to have had no direct connection to the visit. Trump even undercut his own cause by suggesting that China’s huge trade surplus with the US was the fault of the system, not China itself, saying “I don’t blame China. Who can blame a country for being able to take advantage of another country for the benefit of its citizens? I give China great credit.”

Instead, Trump blamed past American presidents. By definition this undermined demands of US businessmen for fairer treatment by China – treatment of the type which was the norm in most of its major trade partners. Legitimate US complaints could be ignored.

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His South Korea visit demonstrated just how much his violent rhetoric against North Korea, not to mention his attacks on trade pacts, had already so damaged relations that Seoul succumbed to Chinese economic and diplomatic pressures and agreed to limiting deployment of THAAD missiles.

On to Vietnam and, the APEC meeting in Da Nang showed just how far Trump was out of step with the attempts of the other nations on either side of the Pacific to forge closer economic links and reduce trade barriers. Meanwhile the remaining nine members of the Trans-Pacific Partnership, following withdrawal of the US, humiliated Trump while he was in Asia by announcing the revival of the plan, albeit under a slightly altered name.

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If that wasn’t a huge slap in the face for the US from its major Asian allies, more derision was to follow.  Trump proclaimed himself a potential mediator in South China Sea disputes. Reactions ranged from open-mouthed amazement to guffaws of laughter. The only person who seemed to take it seriously was the Philippines’ neophyte foreign minister Alan Peter Cayetano who was quoted saying “We welcome that offer.”

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But at least for Trump he was now headed for the one country in the world where, according to recent surveys, he enjoys more positive than negative views. That certainly fits well in a nation which still gives high marks to President Duterte despite, or because of, a campaign of extrajudicial killings of thousands of supposed, mostly poor, drug users – or, too often – people who weren’t drug users at all, but infants as young as 3 who were murdered mistakenly by police.

Trump remained silent on that topic but meanwhile was able to share with Duterte their mutual disdain for President Obama.  This was certainly no way to win friends and influence people in the rest of Asia which has relatively very fond memories of the thoughtful and dignified former president.

Nor did Trump’s pals-act with Duterte make any dent in Duterte’s preference for Chinese money over asserting the rights in the sea accorded by the Permanent Court of Arbitration.

Image result for Trump and Modi in Manila

The one plus, at least in some quarters, of the visit was Trump’s reference to the Indo-Pacific rather than Asia Pacific, bringing India into the regional equation. This was not in fact new. The phrase had been used by Obama and it accords with history in so far as Indian cultural and trade influence was long bigger than China’s in much of Southeast Asia.

 

But that for now is a sideshow as apparent battle lines are drawn between an east Asian focus on open trade and a Trumpian desire to tear up multilateral pacts in favor of bilateral deals. That would spell the death of US influence in the region. Most likely it will not happen because US business, military and bureaucracy are all more concerned with building US influence to counter China than retreating behind tariff walls. But meanwhile China is tempted to gloat and smaller Asian countries are reluctantly trimming their policies in response to US trade threats and general incoherence.

ASEAN leaders should embrace 4IR for another 50 years of peace, growth


November 24, 2017

ASEAN leaders should embrace 4IR for another 50 years of peace, growth

by Jayant Menon and Anna Fink, ADB

http://www.eastasiaforum.org/2017/11/09/asean-looks-to-the-fourth-industrial-revolution/

The 10-member ASEAN is celebrating this year its 50th anniversary.
The 10-member ASEAN is celebrating this year its 50th anniversary.

When the leaders of the Association of Southeast Asian Nations (ASEAN) gather for their 31st Summit in the Philippines this week, they will also celebrate “ASEAN@50” – testimony to ASEAN’s endurance and durability, as the longest-running regional grouping of developing countries in the world.

A major item on the agenda will be regional security and addressing the rising tide of terrorism.  This takes ASEAN back to its roots, having been born as a politico-security pact during the Vietnam War in 1967.

Indeed, ASEAN’s role in sustaining peace and stability in Southeast Asia is often undervalued, if not overlooked. It’s easy to see why. War cannot go unnoticed but peace can, easily. ASEAN deserves its share of the credit for delivering the peace dividend. Moving forward, its economic success may depend on a different kind of revolution.

Inclusive, innovation-led growth

The summary of Key Outcomes from the 49th ASEAN Economic Ministers Meeting in September noted that the overall thematic priority of this year’s Summit would be “Inclusive, Innovation-led Growth”.  This would be supported by three strategic measures: increasing trade and investment, integrating micro, small and medium-sized enterprises (MSMEs) into global value chains, and developing an innovation-driven economy.

The trade slowdown appears to have bottomed out, and there are early indications that both domestic private investment and foreign direct investment are showing promising signs of recovery in countries like Malaysia and Indonesia, and continue to increase impressively in the Mekong countries. To sustain this growth, reforms will need to continue. Achievements on tariff liberalization have been partially offset by a rise in non-tariff measures which are a much more significant barrier to trade.

  Innovation-driven ASEAN economy must address 4IR

A new and growing trend in cross-border investment involves MSMEs, so much so that the last ASEAN Investment Report took this as its theme. And an innovation-driven economy has to address the challenges and opportunities presented by the so-called Fourth Industrial Revolution (4IR).

Image result for ASEAN and the 4th Industrial Revolution

All three strategic items are linked, especially the last two, as discussed in a joint Asian Development Bank-World Economic Forum report titled, What does the 4IR mean for ASEAN Regional Economic Integration?, to be presented to leaders at the upcoming Summit.

The report notes the differing level of preparedness of member countries, negatively correlated to their level of development, and how this may widen rather than narrow development gaps if not addressed.

4IR brings challenges and opportunities

One of the major challenges of the 4IR will be the loss of jobs caused by automation and increasingly advanced robotics and artificial intelligence. Jobs losses will affect some countries more than others. Low-skilled, repetitive jobs (such as assembly line workers) are most at risk, but increasingly service jobs (such as business process outsourcing) will be threatened.

As an immediate response, enabling greater mobility of unskilled workers would curtail unemployment in sending countries and help sustain growth in receiving countries, while also helping counter growing economic inequality within and between countries.

Image result for ASEAN and the 4th Industrial Revolution

In the medium term, new industries will grow and workers will need new skills. Investing in improving human capital must start now. The skills needed extend beyond technical capabilities to include creativity and innovative problem solving. What’s more, the accelerating pace of change calls for adult training and life-long learning not just early-life education. In addition, mutual recognition agreements must expand to cover new occupations, while expediting the harmonizing and streamlining of employment visas.

Integrating MSMEs into global value chains

One of the major opportunities of the 4IR, as highlighted in the report, is the potential of “disruptive technologies” to empower MSMEs. More than 90% of enterprises within ASEAN are MSMEs and they provide most of the employment in member states.

MSMEs are often constrained by lack of access to business and financial services. Blockchain technology has the potential to dramatically increase the security of cross-border financial transactions and logistics even in countries where these services are relatively underdeveloped. This technology has the potential to benefit the smallest firms in the poorest countries of ASEAN.

The rise of online marketplaces also provides platforms for MSMEs to access regional and global markets.

  4IR can help integrate ASEAN MSMEs into global value chains

The 4IR, therefore, provides an opportunity for ASEAN to meet its goal of greater inclusion by integrating MSMEs into global value chains. But it also presents a challenge to the region to invest in human capital to continue to trade and attract investment, and to enable innovation-driven economies.

Given the unequal impact of new technologies in the region, the promotion of inclusive growth must also be seen as a key pillar in underpinning peace in the region. Growing economic inequality could quickly contribute to social unrest and political instability.

Embracing the 4IR, and inclusive, innovation-led growth will be essential to securing another 50 years of peace in ASEAN.

Jayant Menon is Lead Economist in the Economic Research and Regional Cooperation Department at the Asian Development Bank, and Adjunct Fellow of the Arndt–Corden Division of Economics, The Australian National University.

Anna Fink is Economist in the Economic Research and Regional Cooperation Department at the Asian Development Bank.

This blog was first published as an op-ed by the Jakarta Globe, Singapore Business Times, Phnom Penh Post, Agence Kampuchea Presse, Myanmar Times, Philippine StarEast Asia Forum, Daily Star (Bangladesh), and the Bangkok Post.