A Sino-Indonesian Push for APEC

By Vibhanshu Shekhar

Presidents Yudhoyono & Xi at APEC 2013 in Bali. Source: APEC 2013 flickr photostream, used under a creative commons license.

Presidents Xi & Yudhoyono at APEC 2013 in Bali. Source: APEC 2013 flickr photostream, used under a creative commons license.

As the curtains were drawing to a close on the 2013 APEC summit meetings in Bali, Indonesia, both China’s president Xi Jinping and the host, Indonesia’s president Susilo Bambang Yudhoyono, were beaming with excitement. They had different reasons. For Xi, it was the limelight that was thrown on his conspicuous presence in the absence of President Barack Obama. For Yudhoyono, it was not only a display of his own charm, but also his country’s place at the center stage of geopolitics in the Asia Pacific.

The APEC ministers’ joint statement echoed the “Sino-Indonesian push” in its prescription for member economies to maintain “regional resilience” and APEC’s role as a growth facilitator.

The APEC summit offered China an opportunity to engage member economies in a more benign and cooperative atmosphere than ASEAN-led institutions, including the ASEAN Regional Forum and East Asia Summit, have provided during the past few years. Recent Chinese assertiveness in the South China Sea rang alarm bells across Southeast Asia, and escalated the level of uncertainty and insecurity in the region. The Chinese leadership used this summit to revive its much-debated charm offensive, projecting Beijing’s mutually interdependent existence within the region and its role as a driver of regional growth and investment.

Malaysian prime minister Najib Razak’s congratulatory reference to the Bali summit as the “best APEC” meeting highlights a success for Yudhoyono and Indonesia. Jakarta actively campaigned to project APEC as an important leg of its multilateral diplomacy, along with the G-20 and ASEAN, as a larger geostrategic space for Indonesia’s strategic positioning, and as an active platform to pursue its economic diplomacy. In fact, almost all ministerial remarks on APEC alluded to Indonesia’s long-term interests in the region, and the role of the grouping in promoting Jakarta’s regional and global profile.

The fast-growing Asia Pacific region, which accounts for more than two-thirds of Indonesia’s total trade, is an important stimulus for offsetting the country’s economic slowdown. President Yudhoyono pushed for more economic integration, better connectivity, and greater market access within the region while inaugurating the Bali summit.

Indonesia moved its ASEAN chairmanship from 2013 to 2011 in part so it could dedicate its full attention to this year’s APEC. Jakarta used state resources extravagantly to ensure the summit’s success.

The absence of both China and Indonesia from the hotly-debated Trans-Pacific Partnership (TPP) negotiations has provided an important impetus for their focus on APEC. The U.S.-spearheaded TPP may have distracted from APEC by muscling in on its central purpose—economic integration among the member states.

The 2013 summit sought to awaken APEC from its dormancy, and reminded the member economies to accomplish what they declared in 1994 at Bogor. The Bogor declaration called upon members to realize free and open regional trade by 2020. This year’s summit seems to have provided much-needed vitality because of the momentum generated by the active participation from the most powerful ASEAN member and the world’s second largest economy.

The summit also highlighted a growing level of diplomatic trust between China and Indonesia. The presidents of the two countries, while meeting on the sidelines of APEC, exhibited a new interpersonal chemistry and mutual appreciation. Beijing and Jakarta also agreed to elevate their bilateral relations to a comprehensive strategic partnership and introduce substantive content to their engagement. Xi acknowledged Indonesia as an emerging market with global and regional influence, and Yudhoyono identified the bilateral comprehensive strategic partnership as a historical event. The two countries agreed to strengthen their cooperation in trade, investment and infrastructure, and signed various bilateral agreements, including a currency swap agreement of $16 billion.

The two rising powers of the Asia Pacific have made it clear they are going to engage in both bilateral and multilateral partnerships on a range of levels – economic, security, political – irrespective of the United States’ presence or absence. It is yet to be seen whether Obama’s absence has made a dent in U.S. credibility as a reliable balancer in the region. It has certainly prompted what seems to be a warming-up in the region toward China. And the first signal has come from the informal leader of ASEAN — Indonesia.

Dr. Vibhanshu Shekhar is an independent political analyst based in Washington D.C. Follow him on twitter @vibshekhar.

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