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1 Talking Point 6 Week in 60 Seconds 7 Energy and Resources Week in China 8 China Tourist 9 China and the World 12 Cross Strait 13 China Consumer 15 Environment 18 October 2013 16 Society and Culture Issue 212 20 And Finally www.weekinchina.com 21 The Back Page Debt ceiling drama m o c . n i e t s p e a t i n e b . w w w Short fuse: Beijing angered as Washington plays politics with the full faith and credit of the United States, risking a global crisis Brought to you by Week in China Talking Point 18 October 2013 Beijing floored by US ceiling Xi steals limelight at APEC but China frets about its dollar debt holdings by dysfunction in Congress. Thankfully, the unthinkable didn’t happen and with just a few hours to spare before the midnight deadline a deal was brokered on Wednesday to raise the ceiling (though only till February) and end the government shutdown. Though left dangerously late, mar - kets were still relieved that the im - mediate threat of America defaulting on its government bonds had passed. Not that anyone has emerged from the debacle with much confi - dence in the current state of US governance. “Our country came to the brink of disaster,” said Senate majority leader Harry Reid. Veteran Repub - lican Senator Lindsey Graham made perhaps the most signifi - cant admission when he told CNN Was he praying for a deal on the debt ceiling? John Kerry in Bali in the wake of the deal “our sys - tem here is completely broken”. hoto calls at APEC conferences of purple, it may even have reflected Indeed, the Chinese remain Pusually rouse the mildest of at - Kerry’s mood as he was steered to worried that this won’t be the last tention and normally that’s only the outermost fringes for the tradi - time US politicians flirt with de - thanks to amusement at the garish tional photo. While Kerry stood on fault – with it likely we could go shirts that some of the leaders look tiptoe at the back, Chinese president through a repeat of the exercise to be wearing under sufferance Xi Jinping was front-and-centre, early next year. Notably, 144 Re - (something that we remarked upon beaming. If a picture really tells a publican congressmen voted in WiC44). But in Bali this month story, the moment was full of sym - against Wednesday’s disaster- the buzz was less about what was bolism, with American influence averting deal (a greater number being worn at the summit and clearly subordinate. than those who voted for it). As more about who hadn’t turned up, Meanwhile, as the biggest holder HSBC’s chief economist Stephen after Barack Obama stayed at home of US debt, the Chinese also wanted King points out, perhaps the to face the crisis over the federal their voice heard in Washington, as scariest outcome of the week: shutdown and a looming sovereign fears grew that the Americans “Many Republicans voted on default. might not raise their debt ceiling. Wednesday night in favour of de - P h o t o In his place, he sent Secretary of As the week dragged on, patience fault.” S o u r State John Kerry, who soon looked wore thinner. Anger grew in the All in all then, it wasn’t a great c e : R e suitably uncomfortable in a long- Chinese state media that the rest of week for Uncle Sam’s image u t e r s flowing Balinese shirt. A deep shade the world could be dragged down abroad... 1 Week in China Talking Point 18 October 2013 Back to APEC: the no-show was a blow to American standing in the region? Obama regretted that he had been forced to cancel “critical meetings in Asia” and accepted that the debt ceiling row was tarnishing the US reputation. “Whenever we do these things, it hurts our credibility around the world,” he admitted. “It makes it look like we don’t have our act together. And that’s not some - thing we should welcome.” He missed out the APEC Leaders Meeting in Bali on October 7-8, fol - lowed by the East Asia Summit in Brunei over the following two days. The impact is likely to be felt in two main policy areas. Firstly, the no-show could lead to further de - lays in Washington’s efforts to seal the so-called Trans-Pacific Partner - ship (we discussed the TPP in WiC172). Beijing regards the TPP as an attempted sidelining of its own interests in the region (partly be - cause it touches on a number of contentious policy areas like greater protection for intellectual property and a reduced role for state enter - “At least I turned up”: President Xi Jinping with his wife Peng Liyuan prises, but mostly because the Chi - nese haven’t been invited to join the As America prevaricates, China’s neighbours view Washington as an pact). So it has opted to forge re - commercial clout grows. Peter Drys - essential counterbalance to Beijing gional trade ties instead (most no - dale, who heads the East Asia Forum in the region, so Obama’s non-ap - tably with ASEAN and Taiwan; see at the Australian National Univer - pearance rankled (one Asian diplo - WiC67) and is also talking about set - sity, says that the Chinese share of mat privately described the ting up yet another trade group, the East Asian trade doubled to 20% be - decision to send Kerry instead as Regional Comprehensive Economic tween 2000 and 2012, while the US “stark raving mad”, according to Partnership. The plan is to invite proportion fell from 19.5% to 9.5%. The Economist). most of the TPP candidates (not It’s a similar story in Southeast Asia. Others went on record to urge America, of course), plus a few non- In Brunei Premier Li Keqiang pre - Washington to stay active in the re - APEC members like India. dicted that China’s two-way trade gion, including Singapore’s Prime Aware that talks on the TPP have with ASEAN economies will reach $1 Minister Lee Hsien Loong, who ex - been dragging on for years, the trillion by 2020, more than double plained that America plays a role Obama administration had prom - last year’s amount. “which no other country can re - ised to complete negotiations by The East Asia Summit focused place: not China, not Japan, not any the end of 2013. But without the more on security issues with Kerry other power”. Hence there was president in Asia, there was less op - calling on the six parties claiming extra disappointment when P h o t o portunity to push for a deal. Ta all or part of the South China Sea to Obama’s team was also forced to S o u r Kung Pao, a pro-China newspaper in agree on a code of conduct to re - cancel his proposed trip to Kuala c e : R e Hong Kong, likened it to having “an solve disputes peacefully. But that Lumpur, postpone a visit to Jakarta u t e r s orchestra without a conductor”. rang a bit hollow. Many of China’s (for the third time) and drop a 2 Week in China Talking Point 18 October 2013 planned stop in Manila. der of civilians. But he then turned Richard Haass, president of the to the specifics of the debt dispute Council of Foreign Relations, was as further evidence of Washington’s concerned by the symbolism, damaging impact beyond its own telling Politico.com that the no- borders. “As US politicians of both show “makes a mockery” of Wash - political parties are still shuffling ington’s Asian “pivot” – supposedly back and forth between the White a key foreign policy theme for House and Capitol Hill without Obama’s administration. striking a viable deal to bring nor - Without fuller US engagement in mality to the body politic they brag the region, Haass says, smaller about, it is perhaps a good time for countries will be more likely to bow the befuddled world to start consid - to Chinese demands, while stronger ering building a de-Americanised ones like Japan will feel that they world,” he demanded. will have to take it upon themselves “Such alarming days when the to stand up to the Chinese. destinies of others are in the hands “One can hear the tectonic plates of a hypocritical nation have to be shifting in a part of the world des - terminated,” the commentary con - tined to shape much of the trajec - tinued. “Instead of honouring its tory of the 21st century,” he What Asia pivot, says Haass duties as a responsible leading lamented. power, a self-serving Washington All of this activity contrasted has abused its superpower status So what did the Chinese do in Bali with Obama’s absence, delighting and introduced even more chaos and Brunei? the Global Times, which reported into the world.” Xi and his prime minister, Li Ke - that Xi had found himself “in the qiang pressed the flesh at the two driver’s seat” at the APEC gathering. Elsewhere, some of the Chinese summits, as well as touching down The Economist agreed, describing views were a little different? in several Asian capitals before and the Chinese president as “oozing Alongside sniping at Washington’s after the main meetings. personal authority and commercial weakness, there were signs of self- Prior to arrival in Bali, Xi visited clout at every stop”, while Ta Kung reflection in the social media. De - Malaysia, signing pledges to boost Pao went further, gushing that Xi spite the chaos on Capitol Hill, not bilateral trade to $160 billion by was now “the brightest political star everyone was persuaded of the su - 2017, up from $95 billion last year.