Xi Courts Pacific Countries at APEC
After meeting with U.S. President Joe Biden in San Francisco, Chinese President Xi Jinping took the next day to meet with leaders of a number of other Pacific countries including Mexico, Peru, Fiji, Japan, and Southeast Asian sultanate of Brunei, to talk about trade.
What We Know:
- Xi pledged to Mexican President Andrés Manuel López Obrador, Xi that he would bring the China-Mexico relationship to a new level. It is reportedly the first face-to-face meeting between the two leaders. They discussed collaborating on infrastructure, finance and electric vehicles. López Obrador said that Mexico would smooth the way for Chinese businesses investing in the country and that he would be willing to work with China and help promote relations between China and Latin America. The two also agreed to combat the illegal trafficking of precursor chemicals for the manufacture of fentanyl.
- Xi and Peruvian President Dina Boluarte discussed strengthening economic and trade cooperation and deepening cooperation on counter-narcotics efforts. And the Chinese president pledged support for Peru as the host of next year’s summit of APEC leaders. China aims to import more premium agricultural products from Peru and will encourage Chinese businesses to engage in major projects in the country. Boluarte said that the megaport project in the coastal city of Chancay, currently under construction with Chinese funding, will be inaugurated in 2024 and open a new avenue for free trade and new Chinese investments.
- Xi emphasized Fiji as a Global South partner in his meeting with that country’s Prime Minister, Sitiveni Rabuka. It was Rabuka’s first meeting with Xi taking office following the end of Frank Bainimarama's 16-year reign. Rabuka emphasized Fiji’s support for China’s Global Civilization Initiative and Global Security Initiative (GSI).
- Japanese Prime Minister Fumio Kishida agreed that the two countries would work toward mitigating disputes through meetings and dialogue. The chief dispute between the two countries currently revolves around China’s ban on Japanese seafood due to the decision to begin the discharge of radioactive wastewater from the Fukushima nuclear plant into the sea.
- Xi offered to buy more goods from Brunei and to encourage investment during his meeting with the country’s leader, Sultan Hassanal Bolkiah. Both sides emphasized that they should work together to promote joint maritime development as well as peace and stability in the South China Sea.
The Background: Xi spent four hours meeting with Biden on Wednesday on the sidelines of APEC. This was their first face-to-face meeting in a year. Xi dedicated the evening to dining with U.S. business leaders. In recent years, Mexico has been filling-in for production that had been done previously by Chinese businesses as U.S. tariffs and other restrictions have weighed on those supply chains. Peru’s $3.6 billion megaport project in Chancay is 60% owned by the Chinese state-owned company Cosco. Chinese companies also own or have a stake in at least five mines in Peru and there are concerns that two Chinese companies could soon control 100% of the electricity supply in Lima if a sale by the Italian energy firm Enel is completed. Brunei has kept silent on its claim to a relatively small area of the South China Sea off of northern Borneo. The country has focued on growing trade ties with China as it diversifies its economy. China’s Global Initiatives are Xi’s newest broad plans that serve as continuations to the Belt and Road Initiative. They aim to construct a diplomatic and security architecture through multilateral treaties, alliances, and institutions.
Likely Outcomes:
- Xi and López Obrador’s discussion demonstrates that Mexico has some wiggle room in the U.S.-Mexico relationship with regard to cooperation between the superpowers. The meeting with President Boluarte highlights China’s interests in South America and its resources. Interacting with Fiji’s leader signals China’s desire to act as a leader for Global South countries while Brunei represents a country that has leaned in Beijing’s favor in maritime disputes. Meeting with Japan’s prime minister gave Xi a chance to touch base with one of China’s neighboring countries that has a close relationship with the U.S. and also to reiterate positions on the seafood ban. Xi likely walked away from APEC with a sense that he is up to speed on some key ties between his country and these various Pacific countries.
- Aside from Japan, Xi’s meetings on Thursday give the impression that China gained favor among these countries vis-à-vis ties with the U.S. after these interactions. Although Biden keeps reiterating that the U.S. "isn’t going anywhere" with regard to the Pacific, China’s bilateral ties stand out in these cases. The U.S. may take this list as a hint for countries that Washington will have to step up engagement with in the future to counter Beijing.
Quotables:
“China’s economic difficulties and their implications for social stability and regime legitimacy have made Beijing more eager to improve relations with countries important to its economy than was the case six to 12 months ago.” - Thomas Fingar, East Asia expert at Stanford University
“With domestic demand constrained in these ways, foreign trade is essential for the Chinese economy. Chinese leaders realize this and want to mend bridges.” - Willem Thorbecke, senior fellow at the Research Institute of Economy, Trade, and Industry.
“Peru is not married to anyone, but is open to business with the whole world. It’s not as if the Americans and Europeans were not invited to invest. They were. But the Chinese were more proactive and came first. [The West] cannot expect us to refuse partnerships. We have gaps to fill, we have an infrastructure deficit of US$360 billion. Any company interested in helping us is welcome. Bring the money.” - Juan Carlos Mathews, Trade and Tourism Minister of Peru
Good Reads:
China’s Xi is courting Indo-Pacific leaders in a flurry of talks at a summit in San Francisco (AP)
Japan and China agree to work on stable relationship, though only vague promises in seafood dispute (AP)
Kishida and Xi aim for trade progress despite lingering tensions (Japan Times)
Peru President Boluarte Talks Trade Boost After Meeting China's Xi (US News)
With Peru port project, China gains a foothold in America’s backyard (CNBC)