NUSA DUA (Indonesia), Oct 7: Asia-Pacific leaders opened an annual economic summit today in the shadow of global growth clouds that are darkening by the day as the United States struggles to shake off policy paralysis.
The US government shutdown has stopped President Barack Obama from attending the Asia-Pacific Economic Cooperation (APEC) summit on the Indonesian resort island of Bali.
That has worried US allies at a time when China is on the rise and Washington is trying to push through an ambitious 12-nation trade pact that excludes Beijing.
Obama’s enforced absence at both APEC and an East Asia summit straight afterwards in Brunei has left the stage clear for Chinese President Xi Jinping, who has been touring the region and will address a parallel meeting of APEC business leaders later today.
The title of Xi’s speech is “China in transition: what can the Asia-Pacific expect?” Some expect an economic bonanza. Others, looking nervously at Beijing’s far-reaching territorial claims, expect a more turbulent region and want reassurance from Washington.
But the United States may be ill-equipped to offer much immediate global leadership as it confronts a menace mightier than even the shutdown: the possibility that it might default on its colossal debts unless Congress raises the federal borrowing limit by October 17.
Malaysian Prime Minister Najib Razak said in Bali that “the debt ceiling has got to be reviewed, otherwise the consequences would be quite severe”.
The United States is hobbled at a moment when, according to a statement by APEC foreign and trade ministers, the world economy can ill afford more uncertainty following the 2008 financial crisis.
Previewing tomorrow’s final summit declaration, they said that “global growth is too weak, risks remain tilted to the downside, and the economic outlook suggests growth is likely to be slower and less balanced than desired”.
Interviewed by today’s Jakarta Post, Xi agreed that the “world economy has entered a period of deep readjustment” but said China was ready to lead the way as part of “the world’s most dynamic and most promising region”.
He also touted the benefits of free-trade pacts. China is leading talks on another trade agreement grouping 16 East Asian nations just as Washington’s rival “Trans-Pacific Partnership” (TPP) appears to be running into trouble.
“China is very important for the Southeast Asian economies, like it or not,” said Finance Minister Chatib Basri of Indonesia, which has stayed out of the TPP talks. (AGENCIES)
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