APEC summit’s failure highlights profound US-China divisions

For the first time since the Asia-Pacific Economic Cooperation (APEC) forum was founded in 1989, the group’s leaders failed to reach consensus on a joint communique. The tension-filled summit, capped by its lack of a final agreement, laid bare how growing strain between the U.S. and China has riven the Pacific in two.

For nearly thirty years, APEC summits have concluded with the issuance of a joint statement by the leaders of the bloc’s member economies. That tradition of consensus has now officially been bucked, as this year’s summit ended not in accord, but rather in disarray and bitterness: unhappy with the wording of the proposed final statement, the Chinese delegation filibustered throughout the main session, and, according to one US official, broke out in applause as the clock ran out on the summit.

Port Moresby in the spotlight

This year’s conference was hosted by Port Moresby, the capital of Papua New Guinea (PNG). The troubled city, which struggles with rampant poverty, crime and unemployment, hoped to use the summit to raise its international profile and attract investment, but instead became the latest flashpoint in Washington and Beijing’s vying for influence along the Pacific rim. Chinese delegates engaged in a series of bizarre stunts which cast a pall over the conference from its outset. Beijing put up giant posters of Xi Jinping all over Port Moresby and flooded the capital with Chinese flags; when the PNG government demanded that they be taken down, the Chinese delegation replaced them with solid red flags, preserving the effect if not the exact design of the original banners.

Beijing’s posturing—what one senior American official described as “tantrum diplomacy”—only escalated from there. After first banning any international media from Xi Jinping’s meeting with other Pacific leaders, speculation mounted that the Chinese had been behind a timely Internet failure at the summit media centre during U.S. Vice President Mike Pence’s big speech.

China saved its biggest fit of pique, however, for when it felt the negotiations over the final communiqué were going poorly. In an extraordinary attempt to bypass normal diplomatic channels and negotiate the wording of the draft statement directly with the APEC chair, the Chinese delegation allegedly forced their way into the office of PNG’s foreign minister, obliging the Papua New Guineans to call local security to remove the Chinese officials.

Grievances on both sides

The disagreement between Beijing and Washington which caused the APEC summit to disintegrate into such petty squabbling centered around two principal grievances. Beijing, bitter over Donald Trump’s deepening trade war which has eroded relations between the two Pacific powers over the past year, objected to language in the draft communiqué regarding “unfair trade practices” and reform of the World Trade Organization (WTO), rhetoric which they felt singled out China.

The U.S. also had its fair share of complaints which PNG’s Prime Minister blamed for derailing the summit. Firing salvo after salvo in his blunt speech, Mike Pence’s harshest remarks were directed against Chinese President Xi Jinping’s pet project— the Belt and Road Initiative (BRI), which seeks to establish Chinese-built infrastructure around the world. Taking aim at the vast loans offered to small countries as part of the BRI—China, according to Pence, is “trying to drown our partners in a sea of debt”—the vice president spoke favourably of U.S.-led development in the region, insisting “we do not offer a constricting belt or a one-way road”.

A scrabble for influence

Along with trade, development has become a particular hot spot in tensions between the U.S. and China. While China continues to vigorously promote BRI projects, the U.S. has become more insistent in calling China out for exposing developing countries to the risk of defaulting on their considerable loans— a habit the international media has taken to calling “debt trap diplomacy”.

On the ground, this rhetoric translates into open competition for the favour of developing countries. While Xi was at APEC inaugurating a Beijing-built highway in Port Moresby and signing mysterious deals with Vanuatu, the U.S. and its allies were unveiling an ambitious $1.7 billion plan to provide 70 percent of Papua New Guinea’s population with electricity by 2030.

Nor does the intense rivalry between Beijing and Washington stop at roads and electricity cables. As a parting shot at the APEC summit, Pence announced that the U.S. would be partnering with Australia to develop a military base on PNG’s Manus Island. The announcement is a clear move to counter Chinese influence in the Pacific, prompted by rumours that China is scouting out nearby locations for a military installation of its own.

Uncomfortable neighbours

Duelling American and Chinese bases in near proximity in the Pacific could very easily be a disaster, if the situation in Djibouti—currently the only place in the world where U.S. and Chinese military installations are in close quarters—is any indication. Since China opened its hulking fortress in the tiny African country, tensions have escalated sharply.

In one surreal incident, American authorities insisted that China had tried to blind their Djibouti-based pilots with lasers. Relations have been further strained by Djibouti’s forcible nationalization in February of the Doraleh port, operated by Emirati company DP World. The port’s seizure, which has been ruled illegal by a London-based court, spawned rumours that Djibouti’s autocratic government intends to hand the key port over to China as a gift—or as a partial repayment of the billions of dollars Djibouti owes Beijing. U.S. lawmakers have reacted with alarm to the possibility that Doraleh might fall into Chinese hands, warning that such a move would entail “significant consequences”.

Whether similar military tensions are to take over the Pacific remains to be seen, but the failure of this year’s APEC summit does not bode well for congenial relations between the region’s major powers. As two of the most important players in global politics, any tensions between the U.S. and China cannot but help spill over into the wider region. As the APEC summit demonstrates, the ongoing spat between Washington and Beijing has clear diplomatic and economic consequences for the Pacific.