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3 November 2014

What Beijing Wants From APEC

The upcoming APEC forum in Beijing offers China the opportunity for a reset.

By Elizabeth C. Economy
November 01, 2014


The Asia-Pacific Economic Cooperation (APEC) forum is just around the corner, and Beijing is pulling out all the stops. Elegant Chinese limousines will ferry the region’s leaders to and fro. The Gods—or maybe just the Communist Party, in this case—have preordained clear skies (since all factories within polluting distance will be shut down and each day half of all cars will be banned from the road). And Beijing is working hard to patch up political rifts with neighbors such as Vietnam and Japan to ensure that a spirit of collaboration rather than confrontation prevails.

On substance, the APEC agenda is tailor-made for China. The forum reflects all of Beijing’s top domestic priorities, including an antigraft initiative that will be signed at the meeting. And the main themes for the forum read like Chinese President Xi Jinping’s China dream: “advancing regional economic integration,” “promoting innovative development,” and “strengthening comprehensive connectivity and infrastructure development.” China’s vision for the region—connected through railroads, ports, highways, and pipelines—will be well served by the forum’s focus on just these issues. It will also be an opportune time for Beijing to try to win over a few of the major economies of the region—namely Australia, Indonesia, South Korea, and perhaps Japan—and persuade them to join the Asian Investment Infrastructure Bank. While some of these countries may have been pressured by the United States not to join, most have indicated that they have some serious concerns of their own about the bank and don’t need warnings from the United States to adopt a cautious approach. They are worried about the governance issues surrounding the bank and would prefer to have these settled before signing on rather than negotiated on the back end, when it may be too late.

Of course, there are some things that China won’t get. Likely on President Xi’s wish list for his meeting with U.S. President Barack Obama is a serious discussion of Chinese participation in the Trans-Pacific Partnership (TPP). After a few years of decrying the TPP as a plot to contain China, Beijing has apparently decided that it wants in—now. In the words of one Chinese official, Washington is being “selfish” by not sharing details with Beijing about the trade negotiations. Never mind that China is likely at least a decade away from being able to meet the standards set by the other major economies already engaged in the TPP negotiations, Beijing has apparently decided that given the slow pace of the negotiations, it may well be ready by the time the deal is done. More realistic is a step or two forward on a bilateral investment treaty between China and the United States, whose timeline is one or two years until completion rather than a decade or more.

The APEC forum in Beijing offers China the opportunity for a reset—to reclaim the mantle of a positive force as a driver of growth in the Asia-Pacific and to recapture a time a decade ago when China’s rise really was perceived as peaceful. This may be too tall an order for a three-day meeting. Nonetheless, Beijing can at least breathe a sigh of relief—if not of clean air—that it moved the location from Hong Kong to Beijing. Better to risk polluted air than polluted ideas.

Elizabeth C. Economy is C.V. Starr Senior Fellow and Director for Asia Studies at the Council on Foreign Relations. She is an expert on Chinese domestic and foreign policy and U.S.-China relations and author of the award-winning book, The River Runs Black: The Environmental Challenge to China’s Future. This post appears courtesy of CFR.org and Forbes Asia.

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