Vice President Pence and Chinese President Xi Jinping exchanged harsh words last week at the Annual Asia-Pacific Economic Cooperation summit. The confrontation led to what Zerohedge referred to as “unprecedented chaos and disarray, without agreement on a joint communique for the first time in its history as the escalating rivalry between the United States and China dominated proceedings and reflected escalating trade tensions.”
Competition between China and the US over the whole Pacific region also became a point of focus as the US and her allies have launched a massive coordinated response to China’s Belt and Road initiative, according to Reuters.
A diplomat told the news wire organization that the two nations have been courting tensions all week. He said it all began when a Chinese diplomat took exception to two paragraphs in an early draft of the document which mentioned “unfair trade practices” and suggested reforming the World Trade Organization (WTO). The other mentioned sustainable development.
The diplomat, who has chosen to remain unnamed said, “These two countries were pushing each other so much that the chair couldn’t see an option to bridge them. China was angered that the reference to WTO blamed a country for unfair trade practices.”
The conclusion of the fallout on Sunday was precipitated by accusations that members of the Chinese government were attempting to intimidate officials in Papa New Guinea- the host of the event. According to the claims, the Chinese officials were trying to strong arm Papa New Guineans into issuing certain statements they were uncomfortable with.
Peter O’Neill, the Papa New Guinea Prime Minister said, the Chinese made threats, and he quoted them as saying, “You know the two big giants in the room, so what can I say?” The apparent insinuation was that two intimidating men would hurt the Prime Minister if the Chinese’ statements were not made into a general announcement.
O’Neill said that he had to be insistent that he would issue a statement of his own. His statement, he said would communicate issues that the 21 participants agreed on. O’Neill said that the main area of general concern was the belief, held by the Chinese, that the US feared that the communique would indicate a need to reform the WTO.
O’Neill refused to divulge which country is opposed to the WTO, adding, “Apec has no charter over World Trade Organization. That is a fact. That matter can be raised at the World Trade Organization.”
China has a record of supporting the WTO.
Following the summit at a press conference, Wang Xiaolong, a senior foreign ministry official said O’Neill’s reports were untrue. “We are having close interactions with our Papua New Guinea colleagues,” he said. “We are mostly on the same page both on the process as well as the substance of the agenda.”
A senior government source from an undisclosed southeastern Asian nation told a prominent Chinese newspaper that the talks were very intense. He said, “Try as we might, we could not come to an agreement on certain issues. The divide was too great. The US and China could not see eye to eye… I am not surprised at the outcome.”
Another source told the same newspaper that tensions between the US and China were anticipated from the outset, but that no one believed that the result would be as unnerving as they were. No one expected that both superpowers would hold the line to the extent that they did.
Vice president Mike Pence left Papua New Guinea in the afternoon as did Jinping. Pence said there had been a major disagreement between them. According to Bloomberg, the US inflamed relations between the two nations by calling for other nations to avoid taking loans out of Beijing. Pence said, the US is not looking to enter into a trade war with China, but that “the US will not change course until China changes its ways.”
Jonathan Pryke, a researcher specializing in the Pacific at the Lowy Institute, said: “The language used by Pence was concerning because it shows that we are moving toward zero-sum geopolitics in the Asia-Pacific.”
While all of the players and participants were noticeably vague in their comments to the press, we believe the situation is simple. Our appraisal is that China has grown accustomed to taking the lion’s share of every trade deal they enter into and that the Trump Administration is insisting on fairness.
The communist Chinese are not accustomed to dealing fairly with the US, and they do not wish to start doing so now.