SINGAPORE – The talk was about global rebalancing. U.S. President Barack Obama arrived in Asia on his first official tour, talking about a "rare inflection point in history". A time where "we have the opportunity to take a different path." A chance to rebalance the model where Asia consumers consume more and US exporters export more.
Chinese President Hu Jintao was among world leaders at the APEC summit in Singapore.
APEC leaders fully endorsed the strategy; virtually every economy in the world does. But look inside the APEC meeting in Singapore, and see the problems of turning this into reality. One of the biggest may be China.
More than two years ago, China began to allow its currency to appreciate against the dollar. By the time the financial crisis exploded, it had risen in value by about 20 percent. The crisis was the signal for China to freeze the exchange rate there at about 6.83 to the US dollar.
That was a year ago. Even China's Asian trade partners are now worried that the Chinese yuan is undervalued against the sinking dollar. So one of the key issues in Singapore was to put subtle pressure on China to unfreeze its currency.
Finance ministers talked about flexible exchange rates, the APEC leaders were expected to talk to about "market oriented" exchange rates - all aimed at prodding China to become a little more "market oriented" in its own exchange rates.
But by the end of the gathering, all reference to market-oriented exchange rates in the final statement from leaders had been erased. There had been debate behind closed doors between the U.S. and China about the statement. In the end China appears to have won out.
The message seem to be China will move only when its ready. And for all its newfound goodwill and push for re-engagement, there's not much the U.S. can do about that.
Singapore – Alphabet soup is on the menu everywhere here at the APEC summit. Acronyms, painful at the best of times, seem to be used continually by leaders, CEOs and politicians gathered in Singapore. Here’s a guide for those trying to follow the action.
Asia-Pacific Economic Cooperation, or APEC, consists of 21 member economies that account for more than half of global gross domestic product – the value of all goods and services a country produces. Members include power players such as the United States, Japan and China and developing nations such as Chile and Indonesia. A key part of the mission: achieving the 'Bogor Goals of “free and open trade and investment in the Asia-Pacific by 2010 for industrialized economies and 2020 for developing economies.”
Once famously described as"four adjectives looking for a noun,” APEC sometimes comes under criticism for being little more than a talking shop. Members have no treaty obligations and all agreements are non-binding. Still any event that puts Barack Obama and Hu Jintao in the same room is going to attract the world’s attention.
The Association of Southeast Asian Nations or ASEAN has 10 member states, with a combined GDP of US$1.5 trillion. The group’s mission is to promote economic growth and regional stability. Barack Obama will be the first U.S. president to meet with the group’s leaders, including Myanmar’s Prime Minister Thein Sein. The Obama administration has adopted a policy of engaging Myanmar, also known as Burma, in hopes it will push the country toward democratic reforms.
Until a few days ago, the Trans-Pacific Partnership or TPP was little known economic alliance formed between Chile, New Zealand, Singapore and Brunei. Now the U.S., Australia, Peru and Vietnam want to join, with the intention of using the TPP as a stepping stone toward the ultimate goal of free trade throughout the APEC region. This may be the first you have heard of TPP, but I doubt it will be the last.
Singapore – The dirty secret of events such as the APEC CEO Summit is that they are usually scripted, bloodless affairs where any "news" is typically of the tightly choreographed variety.
Exxon Mobil’s Tillerson: Can science predict what will happen with climate change?
So it was a welcome relief that the last session, devoted to the theme "The Shape of Things to Come," bucked that trend. The always provocative Kishore Mahbubani, author of "The New Asian Hemisphere," asked the panelists to speculate on an improbable version of the future.
Rex W. Tillerson, chairman and CEO of the Exxon Mobil Corp., talked at length about the harsh realities of creating and deploying new technologies for the world's growing hunger for energy. For his implausible vision of the future, he offered the following.
"Today, climate change issues so dominates energy policy… the implausible future may be climate change effects don't turn out the way we thought they would, that the climate models simply aren’t competent enough to predict the future.
"Perhaps the Earth has naturally occurring forces that bring it back into equilibrium, and the consequences don’t manifest themselves.
"Or alternatively, perhaps, none of the things we do to mitigate greenhouse gas emissions make any difference, that there are other factors in the climate system that are going to force a change to a warming planet regardless of what we do, which means the glaciers are still going to melt, sea levels are still going to rise, weather patterns are still going to shift."
That prompted a strong reaction from U.S. Commerce Secretary Gary Locke.
"I cannot accept the notion or find it implausible that we as human beings have no control over our destiny and that global warming is a natural phenomenon … or that it will suddenly reverse itself," he said.
"I find it implausible and I think unacceptable that we as human beings should simply do nothing about it or have no ability to control our destiny."
Perhaps Stephen Roach, chairman of Morgan Stanley Asia, summed up an unlikely future best: "The most improbable scenario that I could ever imagine... is what we've been through over the last year," he said.
"If you told anyone what we were about to go through the past year, they would have told you you're nuts.
"So we have lived through an improbable year and we must learn the lessons of this extraordinarily difficult period so that we never, ever have to go through it again."
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