APEC: open face-off between China and the US
Santiago (AsiaNews/Agencies) China's attempt to exert greater international clout has led to confrontation with the US at the Asia-Pacific Economic Cooperation (APEC) meeting that ended yesterday in Santiago (Chile).
Whilst leaders from Pacific-Rim countries discussed trade issues in the two-day summit, Chinese President Hu Jintao and US President George W. Bush also held bilateral talks over several issues. The exchange rate was one of them.
Beijing has been calling on the US to take steps to stabilise the US dollar. Unless this done, China will not reform its own foreign exchange system. The current situation is favourable to China whose exports are undervalued whilst imports are too expensive. This is substantially due to the fact that yuan is not yet convertible. Pegged at 8.3 against the green back for a decade, the value of yuan is so low that it unfairly favours Chinese exports.
China's trade relations with Latin America are another bone of contention. A declining dollar means a declining US influence in areas like Latin America. China intends to profit and become Latin America's main trading partner. In Santiago, Hu Jintao has unveiled plans to invest US$ 30 billion in the region and signed 11 bilateral accords with Brazil. China is already the largest importer of Chilean copper and iron as well as Brazilian bauxite and zinc. Bush did say that the growth in China's trade with Latin America was "good for global prosperity".
International security was another stumbling block. China called the United States an obstacle to a peaceful resolution of the North Korean nuclear issue. In bilateral meetings with South Korean President Roh Moo-Hyun and Mr Bush on Saturday, Mr Hu urged patience and flexibility on the North Korean issue and pledged to get a new round of six-party talks off at an early date. "The extreme mutual mistrust between North Korea and the United States is the biggest barrier to the peaceful resolution of the issue," China's Foreign Ministry spokesman Kong Quan said.
US-Sino relations are also clouded by the Taiwan issue. Hu Jintao called on the US to help crack down on separatist and independence forces on the island. "Taiwan independence forces [. . .] will seriously compromise peace, stability and prosperity in the Asian Pacific region," Mr Hu said. Up to now, Beijing had considered the Taiwan issue an internal affair and refused any outside interference.