China grabs limelight as US hobbled at Asia-Pacific summit

China grabs limelight as US hobbled at Asia-Pacific summit
China's President Xi Jinping and his wife Peng Liyuan attend the Asia-Pacific Economic Cooperation (APEC) Summit in Nusa Dua on the Indonesian resort island of Bali October 7, 2013.

NUSA DUA - China took centre-stage on Monday as Asia-Pacific leaders opened an annual economic summit in the shadow of global growth clouds that are darkening by the day with the US government paralysed by infighting.

The US federal shutdown has stopped President Barack Obama from attending the two-day Asia-Pacific Economic Cooperation (APEC) summit on the Indonesian island of Bali, and another summit this week of East Asian leaders in Brunei.

US Secretary of State John Kerry stressed anew Obama's determination to remain engaged with the Pacific Rim region, but his absence has left the arena clear for the leader of one-party China to trumpet the mounting heft of the world's second largest economy.

In a speech to APEC business leaders, President Xi Jinping insisted there was "enough space to sail together" despite territorial disputes in Southeast Asia and tensions with Washington.

"China cannot develop in isolation of the Asia-Pacific and the Asia-Pacific cannot prosper without China," he said, stressing that his country's recent economic slowdown was the intended result of policies designed to put growth on a more sustainable path.

"China will firmly uphold regional peace and stability," Xi added. "Without peace, development is out of the question, like water without a source or a tree without roots."

The communist leader has been touring Southeast Asia, where there is much disquiet about China's territorial ambitions, and also touted the benefits of free trade pacts after securing commercial deals worth tens of billions of dollars in Indonesia and Malaysia.

China is involved in talks on a trade agreement grouping 16 East Asian nations just as Washington's rival "Trans-Pacific Partnership" (TPP) of 12 countries appears to be running into trouble.

While sympathetic to Obama's political plight, the leaders of US allies in APEC such as Singapore expressed disappointment that he had been unable to throw his presidential weight personally behind the TPP and Washington's stop-start "pivot" towards Asia.

Foreign friends and rivals alike, as well as financial markets, are worried by a threat bigger even than the shutdown: the possibility that the US government might default on its colossal debts unless Congress raises the federal borrowing limit by October 17.

An unprecedented default by the holder of the world's reserve currency would affect "the entire planet, and not just those countries with a strong geographical and economic linkage to the US", Mexican President Enrique Pena Nieto said at an APEC business summit.

Russian President Vladimir Putin expressed similar sentiments to the business leaders gathered in Bali.

"The US dollar is still the biggest reserve currency in the world, so it is of utmost importance to all of us," he said.

But Kerry, taking Obama's place at APEC, said the president's epic tussle with the Republicans was merely "a moment in politics" that did not deflect the United States from its strategic goals.

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