Chinese President Xi Jinping takes centre stage at APEC summit | East Asia Tonight (Oct 31)

Key Concepts

• APEC Summit: Asia-Pacific Economic Cooperation Summit, a forum for leaders of Pacific Rim countries to discuss economic cooperation.
• Supply Chains: The network of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer.
• Open Trade: A trade policy that does not restrict imports or exports.
• Multilateralism: The principle of treating all nations equally and without prejudice, especially in international relations.
• Protectionism: A policy of protecting domestic industries against foreign competition, often by means of tariffs and subsidies.
• AI Chips: Advanced semiconductor chips designed for artificial intelligence processing.
• Green Commerce: Trade and economic activities focused on environmental sustainability.
• Taiwan Strait: The body of water separating mainland China from Taiwan.
• Rare Earths: A group of 17 chemical elements with unique properties crucial for many modern technologies.
• Fentanyl: A synthetic opioid that is a powerful painkiller.
• Geopolitical Climate: The political and economic relationships between countries and their impact on international affairs.
• Bilateral Relations: Relations between two countries.
• Non-Alignment: A position of not aligning oneself with any of the major power blocs.
• Green Initiatives: Projects and policies aimed at environmental protection and sustainability.
• Asian Hall of Fame: An organization that honors indigenous Asian trailblazers.

APEC Summit and Geopolitical Tensions

The APEC Summit in Kyongju, South Korea, served as a central stage for discussions on global trade, technological innovation, and geopolitical stability. Chinese President Xi Jinping emphasized the importance of maintaining steady supply chains and defending open trade, urging nations to safeguard the multilateral trade system and foster an open economic environment. He also called for resistance against "unilateral bullying" without naming specific countries.

South Korean President EJ Myong highlighted the Asia-Pacific region's critical inflection point, advocating for cooperation and solidarity amidst a tense geopolitical climate. He stressed the need to keep the region open and connected, ensuring that growth and innovation benefit all.

A key point of contention at the summit was the potential issuance of a joint statement. While South Korea, as the host, sought to find middle ground and a wording that would please all 21 economies, disputes arose, particularly over the term "free trade," with reports indicating US opposition. The outcome of the summit regarding a joint declaration remained uncertain until the final moments.

Bilateral Meetings and Key Discussions

South Korea-China Bilateral Meeting: High expectations surrounded the meeting between South Korean President EJ Myong and Chinese President Xi Jinping, marking their first one-on-one since President EJ Myong took office and President Xi's first visit to South Korea in 11 years. Discussions were slated to focus on rebuilding trust, boosting economic ties in areas like supply chains, green energy, and technology. President EJ Myong was also expected to seek China's assistance in promoting peace on the Korean Peninsula and encouraging North Korea to return to the negotiating table. A symbolic gesture of goodwill was observed when President EJ Myong gifted President Xi a famous pastry from Kyongju, which President Xi reportedly enjoyed.

China-Japan Bilateral Meeting: Chinese President Xi Jinping met with Japanese Prime Minister Fumio Kishida, with China expressing a desire to develop relations on the "right track" and maintain communication. This meeting occurred despite prior expectations of a potentially frosty discussion due to the Japanese Prime Minister's views on Taiwan and Japan's wartime history. Observers suggested that leaders recognized the detriment of volatility and aimed to start on a positive note. However, concerns remained regarding the Senkaku/Diaoyu Islands and South China Sea tensions, with the long-term sustainability of improved relations yet to be determined.

China-Canada Bilateral Meeting: President Xi Jinping met with Canadian Prime Minister Justin Trudeau, with both sides noting a recovery and return to track in bilateral ties. President Xi invited Prime Minister Trudeau to China, an invitation that was accepted, signaling a significant turnaround from previous tensions, including Canada's branding of China as a "disruptive global power" and the imposition of tariffs on Chinese EVs. The meeting also occurred in the context of past detentions of Canadian citizens by China and President Xi's public criticism of Trudeau for discussing sensitive matters with the press.

US-China Defense Talks and Taiwan Strait Tensions

On the sidelines of the ASEAN Defense Ministers Meeting in Kuala Lumpur, US Secretary of Defense Pete Hackith met with Chinese Defense Minister Admiral Dong Jun. This was their second face-to-face exchange, following virtual talks in September. Secretary Hackith raised serious concerns about Beijing's military activities around Taiwan and the South China Sea, warning of implications for US allies and partners. He described the discussion as "constructive" but stressed the importance of maintaining a balance of power in the Indo-Pacific, reiterating the US commitment to defending its interests and deterring aggression.

China's perspective, as articulated by Admiral Dong, emphasized that the reunification of Taiwan is an "unstoppable historical trend." He urged the US to exercise caution in its actions and words, and to unequivocally oppose Taiwan independence. China asserted its capability to calmly respond to any provocations or infringements, potentially in response to recent US-Taiwan discussions on joint R&D and arms sales. China's defense ministry had previously warned the US against "playing with fire" and vowed to crush any Taiwan independence plot or external interference. Cross-strait relations have been particularly strained since Taiwan elected William Lai as president, whom Beijing considers a separatist. China has recently demonstrated its military might through parades, exercise drills, and the release of high-resolution satellite images of Taiwan.

Economic Developments and Trade Relations

Nvidia's AI Chip Deal with South Korea: US tech giant Nvidia is set to deliver a record 260,000 high-powered AI chips to South Korea, aiming to fuel the nation's next wave of innovation. This landmark deal involves building large-scale AI computing centers, with Seoul allocating up to 50,000 Nvidia GPUs for a national sovereign AI platform. Nvidia will also collaborate with Samsung, SK Hynix, and Hyundai to enhance manufacturing processes and accelerate new technologies. This initiative is expected to position South Korea as a major AI computing hub outside the United States. Nvidia has also agreed to a $3 billion AI joint venture with Hyundai, focusing on self-driving cars, smart factories, and robotics.

Taiwan's Economy and the AI Boom: Taiwan's economy experienced better-than-expected growth of 7.6% in the July-September quarter, largely driven by its dominant position in the semiconductor and tech industry. Exports exceeded $70 billion, a significant increase year-on-year. Despite US tariffs, the bulk of Taiwan's semiconductor exports are exempt, though progress on a deal with the White House has stalled. Investor sentiment remains strong due to the AI frenzy.

Japan's Economic Performance: The Nikkei 225 index hit an all-time high, fueled by a rally in tech shares and a weaker yen, which benefits Japanese exporters. The Bank of Japan maintained its interest rates, with market participants awaiting further outlook on wages.

South Korea's Economic Outlook: The Kospi closed up by half a percent as the APEC summit opened. Concerns exist that a US-South Korea trade deal could pressure the won, which has been the worst-performing Asian currency since last year. Korean automakers saw a rally following a deal with Washington to lower auto tariffs, with Hyundai Motor and Kia closing significantly higher.

US-China Soybean Trade: Following the meeting between US President Donald Trump and Chinese President Xi Jinping, China has reportedly purchased at least four more US soybean cargos, totaling 250,000 tons. This follows earlier commitments from China to buy substantial quantities of American soybeans. US soybean trade with China was a significant market, worth over $12 billion last year, though China has been diversifying its supply sources.

China's Manufacturing Sector: An official survey indicated that China's manufacturing activity is showing signs of strain, with the Purchasing Managers' Index (PMI) remaining below the 50 mark for the seventh consecutive month, attributed to a "more complex international environment." The mainland market declined in response to this weak data, with the Shanghai Composite Index and the Hang Seng Index experiencing drops.

Regional Airlines and Aircraft Shortages: Airlines in the region, like their global counterparts, are facing significant delays in receiving new aircraft due to supply chain bottlenecks. The International Air Transport Association projects a shortage of over 5,000 aircraft, with issues potentially persisting into 2026. Some airlines are exploring alternative manufacturers like China's Comac, with Cebu Pacific Air CEO Mike Such expressing openness to considering Comac aircraft once they are certified for broader international operation.

Green Commerce and Climate Initiatives

China's Green Commerce Plans: China has unveiled new plans to boost green commerce over the next five years, aiming to build a "beautiful China." These measures include strengthening foreign trade firms' low-carbon capabilities through training and research on international standards, and expanding trade in green technologies and products. These initiatives are expected to lower global costs for clean energy and low-carbon goods. China's green trade policies are being integrated into various trade deals, such as the China-ASEAN upgraded 3.0 free trade deal, and agreements with Switzerland, South Korea, and Peru. This aims to align standards, facilitate the export of low-carbon tech goods like solar panels and electric vehicles, and potentially lead to the import of fewer goods that do not meet China's carbon goals.

Commitment to the Paris Agreement: China's push for green commerce signals a commitment to the Paris Agreement, especially as nations prepare for COP30. China is expected to send a delegation, while the US is unlikely to send an official delegation following its withdrawal from the agreement. China has announced new climate goals, including a commitment to cut greenhouse gases by up to 10%, marking the first time it has vowed on reduction targets rather than limiting growth. This will be achieved through increasing zero-carbon factories, green logistics, and clean energy across its supply chain.

Singapore, Chile, and New Zealand Green Initiative: Singapore has initiated talks with Chile and New Zealand on a new deal focused on green initiatives such as sustainable aviation fuel and carbon credit trading. This Green Economy Partnership Agreement (GEPA) is the world's first plurilateral pact of its kind, aiming to modernize trade and investment policies to support environmental goods and services, unlock green economy opportunities, and lower trade barriers while accelerating the green transition.

Space Exploration and Cultural Recognition

China's Shenzhou Mission: China is set to launch its next manned mission, Shenzhou 21, to its Tiangong space station. The mission will carry three astronauts, including mission commander Zhang Lu, payload specialist Zhang Hong Zhang, and 32-year-old Wu Pu, China's youngest astronaut deployed to space. They will complete a rotation with the previous crew and conduct experiments for six months. China is also training Pakistani astronauts for a future mission to Tiangong, indicating close ties with Pakistan.

Asian Hall of Fame: The 21st induction ceremony of the Asian Hall of Fame in Los Angeles honored indigenous Asian trailblazers across various industries, including technology, sport, culture, and public service. The organization aims to provide recognition and impact for Asians, challenging the tendency to view silence as humility and encouraging the celebration of achievement and pride of legacy. Notable inductees included Dr. Yi So-yeon, the first South Korean in space, and Japanese rock legend Yoshiki. The Hall of Fame also plans to nurture future generations of Asian trailblazers through scholarships and workforce programs.

Nuclear Weapons Testing and Global Security

Japanese atomic bomb survivors, represented by Nihon Hidankyo (the organization that won last year's Nobel Peace Prize), have strongly criticized US President Donald Trump's decision to resume US nuclear weapons testing after a three-decade hiatus. They deemed the move "utterly unacceptable" as it contradicts global efforts towards a world without nuclear weapons. This decision was announced just before President Trump's meeting with Chinese President Xi Jinping in South Korea, with President Trump citing Russia and China's nuclear weapons programs as reasons for the resumption of testing. The UN has also issued warnings about the risks associated with such testing.

Conclusion and Key Takeaways

The APEC Summit and related bilateral meetings highlighted a complex global landscape characterized by both cooperation and tension. While leaders emphasized the need for steady supply chains, open trade, and technological collaboration, geopolitical rivalries, particularly between the US and China, continue to shape economic and security policies. The focus on AI and green commerce signifies a shift towards future-oriented industries, with China actively pursuing leadership in these sectors. The ongoing discussions around Taiwan remain a critical flashpoint, influencing defense dialogues and international relations. The economic implications of trade disputes, tariffs, and supply chain reconfigurations are significant, impacting various economies and industries. Meanwhile, efforts towards global peace and disarmament, such as the criticism of nuclear weapons testing, underscore the persistent challenges in achieving a stable international order. The growing emphasis on green initiatives and sustainable practices, coupled with cultural recognition through platforms like the Asian Hall of Fame, points towards evolving priorities in global affairs.