Chinese Handcuffs

Obama's Ill-Advised Asia Strategy

U.S. President Barack Obama with Chinese President Xi Jinping in 2013. Source: Reuters
U.S. President Barack Obama meets Chinese President Xi Jinping.
  • Why it matters

    Why it matters

    As members of the Asia-Pacific Economic Cooperation summit gather this week, the United States and China are butting heads over a new trade agreement, with the Americans pushing for a pact that would exclude Asia’s largest economy while the Chinese favor an agreement that includes all nations including America.

  • Facts

    Facts

    • The differences in the two trade pacts can be seen as a struggle for influence in the region.
    • The U.S. has lost influence in the region since the heady days of the 1990s, when it offered both military protection and economic opportunities to Pacific Asian countries.
    • President Obama’s latest strategy move in negotiating a free trade agreement is going to upset China.
  • Audio

    Audio

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Do you know what FTAAP and TPP stand for? Two world powers, China and the United States, are fighting over these acronyms.

Ostensibly, it’s about free trade. In reality, it’s about influence in the Asia-Pacific region, about waging a war without weapons. This assures a tense mood when President Barack Obama and the Chinese state and party leader Xi Jinping meet today when 21 Pacific rim country leaders gather for the annual Asia-Pacific Economic Cooperation (APEC) summit in Beijing.

China favors the FTAAP, or the Free Trade Area of the Asia-Pacific. The United States wants TPP, the Trans-Pacific Partnership. While the Beijing variation consists of all APEC members, including the United States, the Americans prefer a smaller version with only 11 members — excluding China.

Beijing wanted to pave the way for the FTAAP during the summit, but at the last minute, Washington has taken the vote for a FTAAP feasibility study off the table because it’s own TPP agreement hasn’t reached that stage yet. Naturally, Beijing is peeved, although the Americans’ tactical maneuver came as no surprise to the Chinese. Washington has been trying for years to clip the wings of the unbelievably successful economic power that China has become, though admittedly with less and less success.

The geopolitical situation in the Asia-Pacific region has changed greatly since America’s golden era in the 1990s. The U.S. military forces that provided security in Asia were still warmly welcomed. Military influence was seen as just as important as economic influence, and the United States provided both.

Economic growth is far more popular with voters than military security.

But then, economic growth became more important than tanks and aircraft carriers around the Pacific. And by the first decade of the new millennium, Asian nations discovered they could earn more money with nearby China than faraway America. Countries such as Malaysia, the Philippines and even Japan, Washington’s closest allies in Asia, faced the painful decision of having to choose the security that came with American forces or the prosperity through economic cooperation with China.

Increasingly, the choice was the latter. Economic growth is far more popular with voters than military security, despite Beijing’s increasingly strong buildup of armed forces.

The Americans were forced to rethink the situation and shift their political focus in Asia from the military to the economic, although that means they are now fighting in an arena where China is much better positioned. As a result, it’s likely there will be the occasional clumsy and not thoroughly developed strategy, such as this week’s approach at the APEC summit. By proposing a Pacific free trade agreement in Asia without China, Mr. Obama’s strategists have put their president into a disadvantageous starting position compared to his Chinese counter-part, Mr. Xi Jinping.

His strongest argument might be that a variety of relationships among Pacific nations doesn’t always require that China be included. But even the gangster bosses in 1920’s Chicago knew that parties where the top dog isn’t invited tend to become unpleasant.

 

Frank Sieren reports for Handelsblatt from Beijing and is considered one of the leading German experts on China. To contact the author: sieren@handelsblatt.com

 

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