Asia-Pacific leaders opt for Chinese free-trade pact instead of US proposal

America's Trans-Pacific Partnership deal would have excluded the Chinese

China's President Xi Jinping with leaders of other APEC economies (Getty Images)

In a potential blow to Barack Obama, leaders of the Asia-Pacific economies are now set to work together towards the adoption of a Beijing-backed free-trade pact, instead of Washington’s proposal.

Mr Obama had hoped to secure agreement on the Trans-Pacific Partnership (TPP), a deal including 12 countries, but excluding China. But today, delegates agreed to a two-year study of the China-promoted agreement.

“This is a historic step in the direction of an Asia-Pacific free-trade area,” Chinese President Xi Jinping said.

China said its motives are benign, but its growing economic weight as the top trading partner for most of its neighbours, from South Korea to Australia, has eroded US influence.

“[The US-led] TPP is being used to push aside China and to weaken China’s economic core status,” said Wu Xinbo, director of the Centre for American Studies at Fudan University in Shanghai. He said promoting its own initiative would “give China a bigger right to speak in the Asia-Pacific – to have a new status”. US trade officials have said the two proposals are not competitors.

Meanwhile, the White House said that Mr Obama and Russian President Vladimir Putin spoke three times on the sidelines of the meeting, tackling some of the tough issues that have strained their relationship, including Russia’s provocations in Ukraine.

For all of the serious diplomacy going on, one action from Mr Putin overshadowed much of the Apec talks. In what was described as a “warm gesture on a chilly night”, Mr Putin wrapped a shawl around Peng Liyuan, wife of Mr Xi, as the Chinese premier spoke to Mr Obama.

A video showed China’s First Lady standing up and politely accepting the grey blanket offered by the Russian head of state, before thanking him with a slight bow. But she soon slipped it off and put on a black coat offered by an attendant. The incident spawned a flurry of commentary on China’s social media before censors began removing any mention of it.

AP; Reuters