China, U.S. trade fiery barbs in speeches at Pacific summit

AP

Chinese leader Xi Jinping and U.S. Vice President Mike Pence traded barbs in speeches to a summit of world leaders Saturday, outlining competing visions for global leadership as trade and other tensions between them simmer.

Pence said there would be no letup in President Donald Trump’s policy of combating China’s mercantilist trade policy and intellectual property theft that has erupted into a tit-for-tat tariff war between the two world powers this year.

The U.S. has imposed additional tariffs on $250 billion of Chinese goods and China has retaliated. Pence reiterated Trump administration threats to more than double the penalties.

“The United States will not change course until China changes course,” he said, accusing Beijing of intellectual property theft, unprecedented subsidies for state businesses and “tremendous” barriers to foreign companies entering its giant market.

He harshly criticized China’s global infrastructure drive, known as the “Belt and Road Initiative,” calling many of the projects low quality and saddling developing countries with loans they can’t afford.

The U.S., a democracy, is a better partner than authoritarian China, he said.

“Know that the United States offers a better option. We don’t drown our partners in a sea of debt, we don’t coerce, compromise your independence,” Pence said. “We do not offer constricting belt or a one-way road. When you partner with us, we partner with you and we all prosper.”

Pence also announced the U.S. would be involved in a plan by its ally Australia to develop a naval base in Papua New Guinea, where the summit is being held. China has been intensely wooing Papua New Guinea and other Pacific island nations with aid and loans for infrastructure.

“Our vision for a free and open Indo-Pacific will prevail,” Pence said.

Xi, who spoke before Pence, anticipated many of the U.S. criticisms in his speech. He said countries are facing a choice of cooperation or confrontation as protectionism and unilateralism spreads.

Xi expressed support for the global free trading system that has underpinned his country’s rise to world’s second-biggest economy after the U.S.

“Mankind has once again reached a crossroads,” he said. “Which direction should we choose? Cooperation or confrontation? Openness or closing doors. Win-win progress or a zero sum game?”

Responding to a chorus of criticism of China’s international infrastructure drive, Xi said it was not a trap or power grab.

“It is not designed to serve any hidden geopolitical agenda, it is not targeted against anyone and it does not exclude anyone. It is not an exclusive club that is closed to non-members nor is it a trap as some people have labeled it,” he said.

Leaders of 21 Pacific Rim countries and territories that make up 60 percent of the world economy are meeting in Port Moresby, the capital of Papua New Guinea for an annual Asia-Pacific Economic Cooperation summit.

They are struggling to reach agreement on a joint declaration, particularly whether to push for changes to the World Trade Organization, which sets the rules for trade and can penalise nations that breach them.

WTO member nations have been unable to reach agreement on further freeing up trade for years and the organization is in danger of atrophy.

Two thirds of its members claim developing nation status that allows them to take advantage of benefits and exemptions to obligations not granted to advanced economies, according to the Center for Strategic and International Studies. The U.S., meanwhile, believes the WTO’s abritration body has made decisions beyond its mandate.

APEC is also facing questions about its future. Malaysia’s 93-year-old Prime Minister Mahathir Mohamad said it will become irrelevant if developing nations continue to be left behind by globalization and free trade.