Tue, Nov 20, 2018 - Page 9 News List

Pence-Xi showdown shows that US-China divide is widening

By Toluse Olorunnipa and Dandan Li  /  Bloomberg

US Vice President Mike Pence traded sharp barbs with Chinese President Xi Jinping (習近平) in back-to-back speeches at the APEC summit, showing that neither nation appears to be giving ground in an escalating trade dispute.

Xi on Saturday received applause when he told the summit in Papua New Guinea that implementing tariffs and breaking up supply chains was “short-sighted” and “doomed to failure.”

He called for a stronger WTO and defended his signature Belt and Road Initiative, saying it is “not a trap as some people have labeled it.”

Speaking moments later, Pence told delegates the US offers nations in the region “a better option’’ for economic and diplomatic relations than Beijing’s heavy-handed approach.

He warned against taking Chinese loans, saying the US “doesn’t drown our partners in a sea of debt” nor offer “a constricting belt or a one-way road.”

The back-and-forth on a cruise ship docked in Port Moresby, the capital, suggested the world’s biggest economies remained far from a deal to end a damaging trade spat, even after US President Donald Trump said he was optimistic about a resolution.

Trump and Xi are scheduled to meet in a few weeks at a G20 summit in Buenos Aires.

Trump on Friday last week told reporters that the Chinese response to US’ trade demands was largely complete, but was missing four or five big issues. Those comments helped US stocks erase losses, as investors bet on whether Trump would impose even more tariffs on Chinese goods than the US$250 billion already in place.

China has slapped tariffs on US$110 billion of imports from the US in retaliation.

On Saturday, Pence warned that Trump could still put more tariffs on China.

“We hope for better, but the United States will not change course until China changes its ways,” Pence said.

Later, Pence told reporters he was “very hopeful” the US and China could reach a deal, but “things have to change” for that to happen.

“We’re in a very strong position,’’ Pence said when asked whether there was a deadline to end the trade dispute. “The American people know that we have to do something to reset this relationship with China economically. So, I don’t think there’s a timetable.”

Xi gave no indication of giving in on some key US demands, including an end to technology transfers, support for state-run enterprises and giving up on its “Made in China 2025” plan to lead the world in key industries.

He said intellectual property rights are important to protect innovation, but they should not widen the digital gap between nations.

Xi also made a veiled reference to a new grouping known as “the Quad” that aims to counter China’s influence in the Asia-Pacific region. Consisting of the US, Japan, India and Australia, the group met in Singapore for the third time this week to discuss ways to cooperate.

“Attempts to form exclusive blocs or impose one’s will on others should be rejected,” Xi said. “History has shown that confrontation, whether in the form of a cold war, a hot war or a trade war, will produce no winners.”

China’s growing military prowess and debt-fueled economic aid to smaller nations has increased concerns that it could seek a base for its armed forces in the Pacific or Indian oceans.

The nation’s growing influence in Papua New Guinea was on display in Port Moresby: dozens of red Chinese flags line a new six-lane highway built by China, while a giant billboard shows Xi shaking hands with Papua New Guinean Prime Minister Peter O’Neill.

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