For the first time in 25 years, leaders at the annual Asia-Pacific Economic Cooperation (APEC) summit failed to come to agreement on an official joint statement. China was the lone hold out. The Chinese refused to sign a formal joint statement because it contained the line “We agree to fight protectionism including all unfair trade practices.”
It seems that the Chinese want to maintain their allegedly unfair trade practices. And Vice President Mike Pence, who was at the summit in President Trump’s place, was having none of it. While Pence has traditionally taken a quiet approach to his job, he slammed the Chinese several times at the summit. On one such occasion, Pence said, “China has taken advantage of the United States for many, many years and those days are over.”
Pence also slammed China’s relations with other countries. In particular, China’s propensity of extending massive loans to developing countries was the target of intense ridicule. Pence argued: “The terms of those loans are often opaque at best. Projects they support are often unsustainable and of poor quality. Too often, they come with strings attached and lead to staggering debt… The United States deals openly, fairly. We do not offer a constricting belt or a one-way road.”
China defended itself, claiming that they have mired no country in debt. However, China’s extensive loan programs have been criticized far and wide, and have even given rise to the term “debt colonialism.” And despite China’s claims, some projects have gone sour.
Most infamously, China built the Hambantota Port Development Project in Sri Lanka. It has since become evident that the port wasn’t really in Sri Lanka’s best interests, failing to draw traffic. Despite being located near busy shipping lanes, the port attracted only 34 ships in 2012.
Sri Lanka fell behind on payments and was forced to hand the port over to the Chinese on a 99-year lease. China has been accused for funding a project that most analysts believed would flop, and for extending onerous terms. Many fear that China could someday militarize the port.
Unsurprisingly, some world leaders have begun to question China’s intentions. When the Pakatan Harapan coalition scored a shock upset this year in elections in Malaysia, one of the new government’s first moves was to put a stop to Chinese-funded projects. Malaysia’s leader, Mahathir Mohammad argued that Malaysia could not afford the projects and that they were of dubious benefit to the Malaysian people.
Besides peddling debt, China has also been criticized for relying heavily on imported Chinese workers to complete projects. Instead of creating jobs for locals, many Chinese projects simply create jobs for Chinese workers.
The United States is also starting to be more forceful in pushing back against China’s growing military clout in the Asia-Pacific. The United States will be establishing a joint military base with Austria on the Manus Island in Papua New Guinea. The Chinese have been building man-made islands in the South China Sea, and have been positioning surface-to-air-missiles (SAMs) on them.
In a separate event, Adm. Phil Davidson noted that “what was a ‘Great Wall of Sand’ just three years ago is now a ‘Great Wall of SAMs’ in the South China Sea.”
All of this comes as China’s economy has begun to slow. Things could get worse with sanctions on hundreds of billions worth of Chinese goods set to increase from 10 percent to 25 percent come January 1st. There have been some reports that China and the United States are nearing a deal, but serious hurdles remain.