Chinese Paranoia

Inside China’s ‘tantrum diplomacy’ at APEC

By Josh Rogin 

Chinese and Papua New Guinea flags line a street in front of the parliament building in Port Moresby, Papua New Guinea, host of the Asia Pacific Economic Cooperation summit. 

PORT MORESBY, PAPUA NEW GUINEA — For the first time in its 20-year history, the Asia-Pacific Economic Cooperation summit ended in disarray Sunday when the 21 member countries could not reach consensus on a joint statement because of objections by one member — China. 

When the summit failed, to the disgust of the other diplomats, Chinese officials broke out in applause.
But that was only the final incident in a week during which China’s official delegation staged a series of aggressive, bullying, paranoid and weird stunts to try to exert dominance and pressure the host nation and everyone else into succumbing to its demands.
“This is becoming a bit of a routine in China’s official relations: tantrum diplomacy,” a senior U.S. official involved in the negotiations told me. 

“Them walking around like they own the place and trying to get what they want through bullying.”
Even before the summit started, and continuing right up to its end, Chinese officials used every opportunity to strong-arm or undermine the host nation government of Papua New Guinea (PNG) and the other summit members. 

Chinese tactics included being thuggish with the international media, busting into government buildings uninvited, papering the capital city of Port Moresby with pro-Beijing propaganda and using cyberattacks to stifle the message of Vice President Pence, the U.S. delegation leader.
I was traveling with Mr Pence, and the APEC summit was his last stop in a week-long Asia tour, which included visits to Japan, Australia and Singapore, where the Association of Southeast Asian Nations (ASEAN) summit was held. 

The PNG stop was a showdown of sorts between Mr Pence and Chinese dictator Xi Jinping, who had been in Port Moresby for several days prior for an official state visit.
China’s attempted “charm offensive” was visible everywhere. 

The Chinese delegation had filled the streets of Port Moresby with Chinese flags for Xi’s state visit. The PNG government demanded that they be taken down before the APEC summit.

The Chinese officials eventually complied, but then replaced them with solid red flags — almost identical to the official Chinese flags, but without the yellow stars.
A huge banner along a major thoroughfare touted China’s One Belt, One Road economic initiative as “not only a road of cooperation and win-win situation, but also a road of hope and peace!” 

In his speech at APEC, Vice President Pence called it “a constricting belt” and “a one-way road.”
China’s first outwardly intimidating move was to ban all international media from Xi’s meeting with the leaders of eight Pacific nations. 

Journalists had traveled from around the region to attend the event, and the PNG government gave them credentials. 

But Chinese officials barred them from entering the building and only allowed China’s state media to cover it. 

A U.S. official called it an “own goal” by China, because the journalists then could only write about China’s brutish behavior.
Things got worse from there. 

On Saturday, Xi and Vice President Pence were the final two official speakers at the public part of the summit. 

They gave their speeches on a cruise ship docked off the coast, while most journalists were stationed on shore in the International Media Center. 

But five minutes into Vice President Pence’s remarks, the Internet in the media center crashed for most of the reporters there, meaning they couldn’t hear or report on it in real time.

Just as Mr Pence was finishing his speech, the media center’s Internet mysteriously came back on. U.S. officials told me they were investigating what happened.
“Was there any trouble with the Internet for the speaker before Mr Pence?” another senior U.S. official asked me. (No.) “And who was that speaker again?” (Xi.)
Then things got even crazier. 

Behind the scenes, the member countries were furiously negotiating over the joint statement. 

Chinese officials, not happy with how they were faring inside the negotiations, demanded a meeting with the PNG foreign minister. 

He declined, not wanting to appear to violate PNG’s neutrality as summit chair.
The Chinese wouldn’t take no for an answer. 

They went to the foreign ministry and physically barged into his office, demanding he meet with them. 

He called the local police to get them out of the building. 

Every diplomat I talked to in PNG was stunned by China’s actions. 

But that’s not the end of it.
The negotiations continued into Sunday, and the Chinese delegation’s bad behavior continued apace. According to U.S. officials, Chinese were getting so paranoid about the statement that they began pushing into the meetings of smaller groups of countries on the summit’s sidelines. 

Inside the official sessions, Chinese yelled about countries “scheming” against China. 

Nobody else in the room was yelling, the U.S. officials said.
All 20 countries except China finally agreed to the joint statement, except for China.

The Chinese delegation objected primarily to one line that read: “We agree to fight protectionism including all unfair trade practices.” 

They perceived that as singling out and targeting China.
The Chinese filibustered inside the session, giving long monologues, knowing that time was short and the world leaders had planes waiting to take them home. 

When the time ran out and therefore the summit had officially failed, the Chinese delegation stationed in a room near the main session broke out in applause.
There are three conclusions we can take away from this tragicomedy of errors put on by the Chinese government. 

First, they are behaving in an increasingly brazen and coercive way. 

This is especially true with the small Indo-Pacific countries — such as Papua New Guinea — that they are flooding with development projects and saddling with massive debt.
Second, the paranoid and oversensitive nature of China’s behavior is a clear indication that the government feels under threat from the United States and its allies. 

Lastly, the fact that Beijing is acting in a way that actually alienates other countries — which is clearly against China’s own interests — shows that Chinese official action is controlled from the top down in ways that often prevent good decision-making. 

Even when the Chinese delegation saw its tactics were backfiring, they didn’t have the authority to change course.
This is what the Chinese government is today: pushy, insecure, out of control and with no desire to pretend anymore they will play by the rules the international community has been operating under for decades. 

How to deal with that reality is the debate the rest of the world must now begin in earnest.

Trade War

Vice President Mike Pence vows no end to tariffs until China bows

Reuters

U.S. Vice President Mike Pence speaks during the APEC CEO Summit 2018 at Port Moresby, Papua New Guinea, 17 November 2018. 

PORT MORESBY -- The United States will not back down from its trade dispute with China, and might even double its tariffs, unless Beijing bows to U.S. demands, Vice President Mike Pence said on Saturday.
In a bluntly worded speech at an Asia Pacific Economic Co-operation (APEC) summit in Papua New Guinea, Pence threw down the gauntlet to China on trade and security in the region.
“We have taken decisive action to address our imbalance with China,” Pence declared. 

“We put tariffs on $250 billion in Chinese goods, and we could more than double that number.”
“The United States, though, will not change course until China changes its ways.”
U.S. President Donald Trump, who is not attending the APEC meeting, is due to meet Chinese dictator Xi Jinping in Argentina.
President Trump has imposed tariffs on $250 billion worth of Chinese imports to force concessions on a list of demands that would change the terms of trade between the two countries. 

China has responded with import tariffs on U.S. goods.
Washington is demanding Beijing improve market access and intellectual property protections for U.S. companies, cut industrial subsidies and slash a $375 billion trade gap.
There was no hint of compromise from Pence.
“China has taken advantage of the United States for many years. Those days are over,” he told delegates gathered on a cruise liner docked in Port Moresby’s Fairfax Harbour.
He also took aim at China’s territorial ambitions in the Pacific and, particularly, Xi’s Belt and Road Initiative to expand land and sea links between Asia, Africa and Europe with billions of dollars in infrastructure investment.
“We don’t offer constricting belts or a one-way road,” said Pence.
While not referring directly to Chinese claims over various disputed waters in the region, Pence said the United States would work to help protect maritime rights.
“We will continue to fly and sail where ever international law allows and our interests demand. Harassment will only strengthen our resolve.”

Rogue Nation

China hoped for a sharp power win at APEC, instead Xi Jinping left dissatisfied
By John Lee

With the presidents of the United States and Russia staying home, it seemed Chinese dictator Xi Jinping would dominate this weekend at the Asia-Pacific Economic Cooperation (APEC) summit and increase his country's influence in the Pacific.
China has already lent at least $1.3 billion to the Pacific Islands and about $590 million alone to the summit's host, Papua New Guinea (PNG). 

And to coincide with the PNG visit, Beijing promised $4 billion of finance to build PNG's first national road network, one of several gestures for which China secured effusive praise from Pacific Island countries including Samoa, Vanuatu, the Cook Islands, Tonga, Niue, Fiji and the President of the Federated States of Micronesia.
But nevertheless, Xi left PNG dissatisfied and disgruntled.
Xi Jinping says no one wins in 'cold war,' but Pence won't back down

For the first time in APEC's 25-year history, PNG was forced to end the summit with leaders failing to agree on a communique. 

And Beijing was also left embarrassed by reports of four Chinese officials being unceremoniously banished from the office of PNG Foreign Minister Rimbink Pato after trying to influence his statement.
For China, the trade summit should have been a public relations victory -- but it was turned into partial defeat when Chinese officials barred most reporters from participant countries and other international outlets from the forum and instead only allowed Chinese state-owned media journalists, citing space and security concerns according to Reuters.

Concerted and coordinated push back by the US and its allies
Of more enduring consequence than diplomatic embarrassment, is the concerted and coordinated push back by the US and its allies -- such as Japan and Australia -- which was done in a very public way. 

Earlier this month, Australia announced a $2.2 billion "step-up to the Pacific" -- which includes an Australian Infrastructure Financing Facility and an export credit agency to help Australian companies invest in the region.
Then on Saturday, the Trilateral Partnership countries of the US, Japan and Australia released a joint statement declaring together they would identify infrastructure projects for development and financing. 

Pointedly, these projects would adhere to "international standards and principles for development, including openness, transparency, and fiscal sustainability." 

That approach, it said, would "help to meet the region's genuine needs while avoiding unsustainable debt burdens for the nations of the region."
US Vice President Mike Pence was even more blunt during his speech at the APEC summit.

Taking a swipe at China, he said that the US "offers a better option" and "does not drown partners in a sea of debt... coerce" them or "compromise" their independence.
To indicate that the US and allied powers were serious about using economic and military means to counter Chinese influence, Pence announced over the weekend the US will join with Australia and PNG to redevelop and create a joint naval base on Manus Island. 

"We will work with these two nations to protect sovereignty and maritime rights in the Pacific Islands," he said.

Public distaste for 'sharp power' on show
Previously, in August, it was reported that China could be given the contract to redevelop a port on Manus Island. 

A military facility on Manus Island is of high strategic significance -- this is a deep-water port capable of hosting aircraft carriers and hundreds of naval vessels.
As one of the most important bases for the US fleet in the Pacific theater during World War II, it will be a second line of defence should China's People's Liberation Army Navy successfully break out of the so-called First Island Chain, a line of archipelagos that cover the Kuril Islands, Japan, Taiwan, northern Philippines and Borneo, and the Malay Peninsula.
But even if the reports about Chinese involvement in the Manus Island port are untrue, Beijing would be alarmed at the prospect of American and Australian military assets in PNG to counter any Chinese naval breakout.

As far as Beijing is concerned, the weekend was the time to showcase China's emergence as a benign superpower in the South Pacific. 

Instead, public distaste for and rebuke of its 'sharp power' was on show.
Xi defended China's trade practices and denied that its Belt and Road Initiative contained hidden geo-political and other sinister motivations. 

And no matter how adamantly he did so, it was not a conversation that Xi intended to have when he first landed in Port Moresby.
And it has not ended.
The more China offers economic largesse and inducements, the more it will need to reassure the recipient and the world that it is not laying a 'debt trap' or seeking to buy influence.
The weekend was supposed to be China's moment in the sun during this most important regional economic meeting. 

Instead, it became obvious to all that Beijing's ambitions are as feared and resisted by at least as many countries, as welcomed by others.

Axis of Evil

China and Russia’s awkward romance
By Jonathan Hillman

Oriental despots: Xi Jinping hosted Vladimir Putin in Beijing to discuss increasing economic and military cooperation between their two countries. June 25, 2016. 

This week, Chinese dictator Xi Jinping and Russian President Vladimir Putin are capitalizing on President Trump’s absence from two major summits. 

Putin met with the Association of Southeast Asian Nations (ASEAN) in Singapore, and Xi will attend the Asia-Pacific Economic Cooperation (APEC) summit in Papua New Guinea. 

In Asia, where economics is strategy, Xi and Putin are not only showing up but claiming to champion a new approach to globalization.
Lately, Xi and Putin like calling for openness and inclusivity, appropriating Western language to fuel resentment in many of the places that have benefited from globalization the most. 

They even pledged to link their signature economic visions in 2015, a political act kept alive by endless joint statements and signing ceremonies, including those last week. 

China’s Belt and Road Initiative promises $1 trillion of new infrastructure, trade deals and stronger cultural ties with over 80 countries. 

The Eurasian Economic Union puts Russia at the center of a single market for goods, services, capital and labor.
The problem is not American ignorance of this threat but the absence of a coherent strategy in meeting it. 

“Moscow and Beijing share a common interest in weakening U.S. global influence and are actively cooperating in that regard,” the U.S. Defense Intelligence Agency concluded in a 2017 report. 

But unintentionally, the cumulative effect of U.S. sanctions against Russia and tariffs against China could hasten the very threat Washington seeks to avoid: an anti-Western authoritarian partnership between the world’s largest nuclear power and second-largest economy.
That nightmare can still be avoided. 

Thankfully, the Sino-Russian partnership still has an artificial flavor, supported more by leaders-on-high than organic developments on the ground. 

After each round of ceremonial signings and partnership promises, China still towers above Russia in economic and demographic terms. 

With a long history of invasions, Russia’s paranoia about foreign powers approaching its borders will not vanish overnight.
But Russian policymakers must be persuaded to take China’s economic power as seriously as the West’s military power. 

China’s grand ambitions run through Russia and its neighbors, but its investments and infrastructure projects have not yet triggered alarms in Moscow. 

Russia is the gatekeeper for China’s overland push westward, but Xi now holds the keys in the form of investment and respect that Putin, economically and diplomatically isolated from the West, craves.
Washington should highlight the risks of China’s Belt and Road in Russia’s backyard. 

Three of the eight countries with the highest debt risk from Chinese lending are Russia’s close neighbors: Tajikistan, Kyrgyzstan and Mongolia. 

China can exploit the weakness of small economies that borrow big, as it did when it wrote off a portion of Tajikistan’s debt in exchange for disputed territory in 2011. 

Inevitably, as China’s economic footprint grows, so will its security footprint. 

Sightings of Chinese military vehicles and construction in Afghanistan’s Wakhan Corridor suggest this expansion is already underway.
To take the air out of Xi and Putin’s globalization tale, Trump’s trade policy must be updated. Yesterday, a memorandum of understanding was signed to boost trade between ASEAN and the Eurasian Economic Union. 

China is backing the Regional Comprehensive Economic Partnership, a regional deal that gained momentum when Trump withdrew from the 12-nation Trans-Pacific Partnership. 

Easier said than done, but the United States urgently needs to get back into the game of offering regional alternatives rather than bilateral ultimatums.
Finally, a bit of old-fashioned diplomacy would go a long way. 

For now, the United States does not need to choose between Russia and China, as President Richard Nixon famously did over four decades ago. 

It would be wiser to work selectively with both sides, toning down the “with us or against us” rhetoric and noting areas of existing cooperation. 

Before reflexively approving the next round of sanctions, American policymakers should carefully evaluate their longer-term consequences, such as encouraging the rise of alternative payment systems, harm to the dollar, and pushing U.S. competitors closer.
With restraint and patience, the United States could reestablish itself as a natural wedge between Russia and China. 

At the very least, it must avoid becoming a bridge that unites them.

China's boulevard to nowhere: The battle for influence in APEC's Pacific host

By Jonathan Barrett, Colin Packham

A general view shows the APEC Haus building in Port Moresby, Papua New Guinea, August 10, 2018, in this picture obtained by Reuters on October 25, 2018 from social media. 

SYDNEY -- Workers are putting the finishing touches on a Beijing-funded boulevard designed to showcase Papua New Guinea’s (PNG) capital to visiting world leaders at this month’s Asia-Pacific Economic Cooperation forum.
Critics say the six-lane road -- complete with wide, illuminated footpaths -- is emblematic of a regional power play whereby donor countries vie for influence with show-stopper gifts, even as deeper problems plague the Pacific nation.
Australia, PNG’s traditional partner and a close Washington ally, is lifting aid and has plowed more than A$120 million ($86.5 million) into APEC, seeking to keep its sway over its neighbor.
Allan Bird, a parliamentarian and governor of PNG’s second largest province, said the boulevard outside parliament house had little practical benefit.
“Whatever the Chinese government spent on it, it could have been better spent somewhere else, buying medicine or building a school,” Bird told Reuters.
Bird said such gifts put pressure on traditional partners such as Australia to place less restrictions around donated funds and refrain from criticizing PNG’s own spending, which controversially includes buying 40 Maseratis and three Bentleys for APEC.
“There is no transparency around the use of public finances,” Bird said.
“The government can turn to other donors and tell them to ‘toe the line or else we’ll be quite happy to take Chinese money’. They use it as leverage.”
The PNG government did not respond to questions on funding for the boulevard project or other aspects of APEC. 

PNG has previously thanked China for its infrastructure funding and aid, and denied Beijing had asserted any diplomatic pressure.
Chinese Foreign Ministry spokesman Lu Kang said people should be supportive of the PNG government’s efforts to promote regional economic integration by hosting the summit.
Speaking in Port Moresby on Wednesday, the Chinese government’s top diplomat, State Councillor Wang Yi, said in recent years his country had helped build more than 100 projects in PNG and other Pacific island nations, including schools and hospitals, which these countries had greatly appreciated.

AIDING AND INDEBTING
If the region -- pivotal in the Pacific battles of World War II -- is a strategic treasure, PNG is one of its jewels.
It controls large swaths of ocean, is rich in mineral resources and is close to both U.S. military bases on the island of Guam and to Australia.
Formerly administered by Canberra, PNG has in recent years turned increasingly to China for financing as Beijing becomes a bigger player in the region.
PNG has the largest debt to China in the South Pacific, at almost $590 million, representing about one-quarter of its total external debt.
When world leaders arrive in the capital of Port Moresby for APEC, the contributions of donors will be obvious.
Australia will provide security personnel, naval patrol boats and a helicopter-docking ship; and the city will have an upgraded sewerage system care of the Japanese government.
Beijing has refurbished the show-piece convention center and gifted coaches, mini-buses and fire-engines.
China also rebuilt city’s main highway, which according to Moresby-based think tank the Institute of National Affairs, didn’t really need an upgrade.
The institute’s executive director, Paul Barker, said the resurfaced streets and new boulevard had little public benefit.
“It’s hard to imagine the boulevard will have any use other than marches or grand displays from time to time,” he said.
“It’s not really a road that goes from anywhere to anywhere.”
While the exact cost of each project is unclear, a Reuters analysis of PNG government announcements shows China’s total bill would be several tens of millions of dollars.
Australia’s A$120 million contribution to the event represents nearly a third of what Canberra spent when hosting world leaders for G20 in 2014.
Australian foreign aid to PNG is budgeted to hit a record A$572 million this year as Canberra diverts more capital to the Pacific at the expense of other regions.
On Thursday, Australia announced it would help fund a PNG navy base that China had expressed an interest in funding.
“Over the last year, we have seen Australia and New Zealand aggressively expand their focus on the Pacific, which is something we are very pleased about,” said a senior U.S. official, who spoke on condition of anonymity.
Australia’s Minister for Foreign Affairs Marise Payne declined to comment on Canberra’s funding for APEC. 

Australia has previously said it was “partnering” with PNG to showcase trade, tourism and investment opportunities.

THE FAST AND THE FURIOUS
“(PNG Prime Minister) Peter O’Neill sees APEC as putting PNG on the world stage,” a British official told Reuters. 

“If a donor wants to win favor with O’Neill, assisting with APEC is the way to do it.”
Yet, while gifts pour in, parts of PNG are still struggling to recover after a massive earthquake in February killed more than 100 people, destroying crops and infrastructure.
Polio, a potentially deadly and highly infectious viral disease almost eradicated globally, also re-emerged in PNG in recent weeks.
Faced with such challenges, the purchase by the PNG government of a fleet of luxury vehicles has sparked public protests.
Retailing in Australia at more than A$200,000 ($141,560), a Maserati is well beyond the reach of a typical PNG local, who earns on average $2,400 each year, according to U.N. data.
PNG’s government has said it has agreements in place to sell the cars immediately after APEC and taxpayers will bear no financial loss.
Diplomatic sources told Reuters nearly all leaders attending the event would travel in special armored vehicles, making it unclear what the sports cars will be used for.
Donors have so far largely refrained from public comment.
“Some are worried about rocking the boat and don’t want to threaten bilateral relations by publicly criticizing O’Neill for buying luxury cars,” said the senior British diplomatic source.