U.S. President Barack Obama‘s decision to skip a series of Asia and Pacific summits to attend to the partial government shutdown in Washington gives China an edge in the two superpowers’ tussle for influence in the fastest-growing corner of the global economy.
An Indonesian vegetable vendor passes a giant banner for APEC in Nusa Dua on Indonesia’s resort island of Bali.
China and the U.S. have competing visions for the future of the region, ranging from trade and security to resolving deep-seated territorial disputes in the resource-rich waters of the South China Sea.
America’s rebalancing, or pivot, of its foreign policy away from the Middle East and Afghanistan toward East Asia was in part a way to ensure that the U.S. isn’t locked out of new trade pacts in the region, and ensure that smaller Asian nations can profit from what U.S. officials have described as a healthier, more equitable relationship with China.
However, the stalemate in Congress over enacting a new budget for the fiscal year, which began Tuesday, is turning out to be a significant setback for the U.S.’s longer-term aims in the region, and lends China fresh momentum for its own charm offensive in Southeast Asia and beyond.
And Mr. Obama’s decision to skip the Asia-Pacific Economic Cooperation meetings in Indonesia and the East Asian Summit in Brunei next week “is a blow to America’s image in Asia, where symbolism is everything,” said Ian Storey, senior fellow at the Institute of Southeast Asian Studies in Singapore. “It projects the image that America is politically dysfunctional and fiscally irresponsible, and not as committed to Asia as the Obama administration would have us believe.”
China, in contrast, has launched a full-court press in the region ahead of the meetings. President Xi Jinping met with Indonesia’s president Wednesday and addressed the country’s parliament while signing a $15 billion currency swap agreement that could lend some support to Indonesia’s wilting rupiah. Mr. Xi traveled to Malaysia on Thursday for a state visit to meet with Prime Minister Najib Razak and sign a series of commercial agreements amid signs that China’s economy is beginning to regain some momentum, with its Manufacturing Purchasing Managers’ Index rising for the third consecutive month in September. Mr. Obama earlier this week postponed scheduled trips to Malaysia and the Philippines that were to have followed his summit appearances.
Speaking at a news briefing with Mr. Najib, Mr. Xi said China was looking forward to elevating its relationship with Malaysia and to promote more cooperation across the region.
Indeed, “China appears prosperous and full of self-confidence. As America struggles to resolve its severe political and economic problems, China will have the floor in Bali and Brunei,” Mr. Storey said.
Obama’s planned spin around Asia was hotly anticipated around the region. Carlyle Thayer, emeritus professor at the Australian Defence Force Academy in Canberra, said the Southeast Asian countries in particular were hopeful that Mr. Obama’s attendance at the East Asia Summit and a summit level-meeting between the U.S. and the Association of Southeast Asian Nations would help ensure that the 10-member grouping would remain at the center of trade and security negotiations in the region.
The Obama administration’s “pivot” to Asia, launched in 2011, already has had some successes. It helped open up debate over how to resolve territorial disputes in the South China Sea, which is claimed in whole or in part by China, the Philippines, Vietnam, Taiwan, Brunei and Malaysia. To Beijing’s chagrin, Washington has pushed for a multilateral process to resolve the conflict, which China would prefer discuss from a position of strength with individual countries. The U.S. also has notably expanded military ties with the two countries most frequently at loggerheads with China over the waters, Vietnam and the Philippines.
Washington’s move to eliminate many of its economic sanctions against Myanmar as it continues its transition to democracy has helped open up the former military state to outside investment, and reduce its economic dependence on China, analysts say.
In addition, the Obama administration’s efforts to push forward talks on the proposed Trans-Pacific Partnership were expected to be one of the main points of discussion at the APEC meeting in Bali, Indonesia. The U.S. now ships more exports to the Asia and Pacific region than it does to the European Union or Canada. The free-trade talks include the U.S. and 11 other countries, including Japan, Australia, and Chile, although so far not China, which is working toward expanding an existing free-trade pact in the region which excludes the U.S.
Speaking before the White House canceled Mr. Obama’s trip, U.S. Trade Representative Michael Froman said in an interview in Bali that the coming TPP discussions would help assess the progress of the trade talks, and that a deal by the end of 2013—the negotiators’ goal—”is ambitious but doable.”
Now, though, the impact of the government shutdown is reviving doubts about the U.S.’s long-term commitment to Asia. “What America is facing will unavoidably have an impact on the U.S.’s international standing,” said Dewi Fortuna Anwar, who heads Indonesian Vice President Boediono’s political affairs team.
“There are jokes going around now,” she said. “‘Why did Mr. Obama cancel his trip? Maybe because he can’t pay his fuel and hotel bills.’ It’s not a funny joke.”
The question on many commentators’ minds now is what China might do to capitalize on Mr. Obama’s absence. While Secretary of State John Kerry will attend the meetings in Mr. Obama’s absence, and undertake trips to Malaysia and the Philippines that the White House canceled earlier this week, the president’s no-show means that China’s Mr. Xi will be the “shining star” at the gatherings, Ms. Anwar said.
Other observers go further. With Mr. Obama diverted by the deadlock in Congress, Ernest Bower at the Center for Strategic International Studies in Washington warned that while U.S. allies will worry about America’s commitment, other countries will view Mr. Obama’s absence as a sign of weakness.
“The former will cause hedging behavior by governments worried about U.S. staying power, and the latter may result in more aggressive postures by nations interested in exploring the limits of U.S. determination,” he said.
—Ben Otto, I Made Sentana and Abhrajit Gangopadhyay contributed to this article.
Write to James Hookway at james.hookway@wsj.com and Natasha Brereton-Fukui at natasha.brereton@dowjones.com
Obama Cancels Asia Trip, Leaving More Space for China
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