WASHINGTON, Nov. 22 (UPI) -- Progress on the economic front may have been limited at the latest meeting of the Asia-Pacific Economic Cooperation forum in Santiago, but China was clearly one of the biggest winners of the weekend talks.
For the world's most populous state, the APEC meeting was an opportunity to showcase its leader Hu Jintao as the head of an ascending nation that can call the shots as an economic as well as political power in its own right.
Of course, China's growing economic power has been acknowledged by the international financial community well before the APEC meeting. Indeed in September, China's finance minister was invited for the first time to represent the country at the Group of Seven meeting in Washington, the group that represents the world's richest nations, namely the United States, Japan, Britain, Germany, France, Canada, and Italy. At that time, China was asked only to take part as an observer at the latest G7 meeting, even though it has now become the world's seventh-largest economy and the fastest-growing country in the world.
China's growing clout in the diplomatic arena has become clear with ongoing talks with North Korea over nuclear arms in concert with the United States, Russia, Japan, and South Korea. But now, China is also clearly an economic power to be reckoned with which investors ignore or underestimate at their own peril, a fact that is illustrated by the amount of media coverage the Chinese delegation got this time around. While China has been a founding member of APEC since the group started in 1989 to boost trade relations in the Pacific Rim, never have the words of a Chinese leader been so closely scrutinized by international investors as they had been this time around, as they know full well that any signs of a slowdown in growth in China's economy could bode ill for growth worldwide.
"China's agenda is really clear and simple. It is determined to be a responsible member of the international community in such a way as to generate more free market benefits for its partners and for itself," said the on-line edition of a Beijing paper, China Daily, on Hu's message at the summit meeting.
Meanwhile, President Hu made sure that China was regarded not only as the outsourcing destination to the world, and the supplier of cheaply-made products across the globe, but also as a country that could invest in other nations. Indeed, prior to his arrival in the Chilean capital, Hu was in Brazil as well as Argentina, and in both countries, he announced major investment plans into Latin America by China over the next decade. Even though China's relations with the region has hitherto been fairly limited for historical as well as geographic reasons, Hu promised Argentine President Nestor Kirchner earlier this week that China would be pumping nearly $20 billion into the country, including a $8 billion plan to expand Argentina's railway system and $5 billion for oil exploration.
In Brazil, meanwhile, the Chinese premier promised President Luiz Inacio Lula da Silva to give Brazil greater access to China's poultry and beef products, and analysts estimate that the beef deal alone could be worth $600 million for Brazilian farmers. China also promised between $5 billion and $7 billion in investments to improve Brazil's transportation network.
Certainly, there is no doubt that China's status as an investor continues to grow. And the country's own declaration that it will catch up and exceed Japan's growth, which remains Asia's single-largest economy, by 2020 might not just be possible, but actually be achieved before then, according to some analysts.
At the same time, the world's most powerful nations made clear this weekend that they would try not to rattle China and force the country to take steps to liberalize its economy, lest it upset the delicate balance of international markets. At the Group of 20 finance ministers' meeting in Berlin which took place at the same time as the APEC talks, member nations including some of the world's wealthiest countries made no direct call on Beijing to float the Chinese currency, even though many analysts have argued that China is deliberately keeping the yuan weak to make its exports more competitive in international markets.
Instead of calling for the Chinese authorities to float the yuan, therefore, the G20 said instead that emerging Asian economies should allow exchange rates to become more flexible, thereby avoiding naming China directly.
