BEIJING - Has the recent APEC summit between the US and Chinese presidents Barack Obama and Xi Jinping set the Pacific back to the quarrelsome times of 2009? Hardly - and if history ever repeats itself, we are told it is in the form of farce. Many things have changed in the past five years, too much to turn back the clock.
The 2014 APEC summit comes at a very different moment from when then-Chinese president Hu Jintao could not grant the requests the US wanted at the 2009 Copenhagen climate change conference. So perhaps, it is worth considering at the results of the recent summit.
Very briefly, the US and China released a common statement on climate change and the environment. Although this is not a formal agreement, it is certainly a step forward compared to the argument the two countries had in Copenhagen in 2009. The Chinese originally wanted to sign an pact in Copenhagen and were bitterly disappointed when Barack Obama could not meet their expectations. Differences in the structure of power in the two countries make it extremely difficult for an American president to take a commitment without the full support of Congress, something that until now the Chinese have for some reasons failed to fully understand.
After the breakup in Copenhagen came a series of new sources of friction and within a few months the new American policy of a "pivot to Asia," which many Chinese and international observers interpreted as an attempt to contain China. Originally the accord on climate change and the environment could have paved the way for a massive technologically transfer, which could have taken bilateral ties to a new level (see US road to recovery runs through Beijing, Asia Times Online, November 15, 2008). Now things are completely different, but could these possibilities reopen?
Xi Jinping, in his public statements at the joint press conference, also said that Asia is big enough for both the US and China. This is very different from a proposal allegedly advanced by the Chinese to divide Asia into spheres of influence, where Beijing wanted the upper hand in certain areas and was willing to leave the rest to America. China must have realized that its problems in Asia would increase with an American departure, rather than diminish. Tensions with neighboring countries, which can be checked by the American presence, may well explode without it.
These two gestures, which mark a big departure from China's former posture, prove the political and psychological strength of Xi Jinping. He can change policies and his mind when he understands things are not working. Now, will the next couple of years be enough to reset US-China ties? An important space for future cooperation is Central Asia. Here Russia and some Israelis too are greatly interested in collaborating with China on a new Silk Road. Just a few days ago, Beijing committed an initial investment of US$40 billion for an infrastructure fund necessary to develop this international trade network.
Moreover, the improvement is not just bilateral. After many months rattling sabers over the Senkakus, tiny islands in the middle of the ocean, the handshake between Xi and the Japanese Prime Minister Shinzo Abe at APEC defused the main source of tension in the region and also had a positive impact on the ties between China and America.
The APEC summit was a big and possibly unexpected success, and the only faulty point was the management of the Asian Infrastructure Investment Bank (AIIB). This was supposed to be a political, not merely financial, instrument, and from here perhaps lessons can also be drawn for future Chinese steps in the world of global credit.
The AIIB should have helped to unite the world within a Chinese-devised framework. However, the management of this bank has proved not to be up to the task. AIIB has little or no political influence and seems to have failed to understand the deep rationale for the World Bank and the International Monetary Fund.
According to Robert Mundell (in a private conversation), political economy is politics with numbers; that is, if there are numbers without politics, this is just bean counting. The point of the AIIB and the new fund for the Silk Road is to transform China's huge cash reserves into real credit, and this is the practical challenge awaiting China in the next weeks and months. (See my War, yuan way or another, Asia Times Online, September 4, 2014.) And the "soft power" China is rightly hankering after starts only with success in making its credit (as opposed to "money") available in Asia.
Francesco Sisci is a Senior Researcher associated with the Center for European Studies at the People's University in Beijing. The opinions expressed are his own and do not represent in any way those of the Center.
(Copyright 2014 Francesco Sisci.)
