APEC looks to Europe, China

APEC looks to Europe, China

By Jason Leow

BEIJING: With pen to notebook and fingers to their recorders, reporters were ready to dash to the first delegate who emerged from the opening day of talks at the Asia-Pacific Economic Cooperation forum (APEC) Finance Ministers' Meeting last week.

Their mission: To record the wisdom of experts on how to beat the global gloom.

That was last Saturday in Suzhou, one day after the United States reported its jobless rate soaring to a four-year high of 4.9 percent. Japan, too, had announced a 0.8-percent contraction in the three months ending in June.

Delegate after delegate shunned the media or said they could reveal little until Sunday, when they would issue an official statement about an action plan. Indeed, two days of discussion and bilateral exchanges ended on an upbeat note.

Rallying together, ministers declared they would press on with efforts to lift the region from the slump and promote sustained growth. They issued a five-page joint ministerial statement signaling this commitment. But that was saying as little as they had before.

With so much serious engagement leading to so little, APEC had affirmed itself -- again -- as a talkshop, a view which China's Vice-Finance Minister Jin Liqun and Singapore's Finance Minister Richard Hu themselves tried to beat down.

They argued that APEC set the stage for free-flowing and candid talks among finance ministers, who would go away with clearer ideas of how different economies coped with the slowdown.

More importantly, said Jin, there was a need not to talk down the economy further. It made sense to rally together at a time of crisis, he said.

To reporters, and possibly their readers around the world, that view seemed just so many words.

But to be fair, last weekend's APEC platform did generate two important insights.

One was that Europe, which has for so long looked inwards to its own economic problems, needs to engage the global economy more aggressively -- particularly at a time when the U.S. and Japan cannot.

At a briefing for Singapore reporters, Dr Hu said: "There has been a feeling that we should leave everything to the U.S., to require the U.S. to lift everyone up.

"Now, all the major developed economies recognize they should contribute. Japan wants to do more. But with its current problems, that would be difficult but it is committed. So Europe has to do a bit more."

With hindsight, APEC yielded a timely wake-up call to Europe. Tuesday's terror attacks on the U.S. threaten to puncture American consumer confidence, which has been the one factor left preventing a complete economic fallout.

With the U.S. and Japan reeling from their domestic troubles, Europe needs to become the third leg propping up the global economy. It needs to step away from its "fixation", as Dr Hu described, with inflationary controls, and pump-prime its economy with more flexible fiscal programs.

Meanwhile, China also thought it was ready to play a bigger part. As one of the major beneficiaries of the global economy, it said it was now also ready to cooperate more.

Even more significantly, it was prepared to accept the ills that come with trade liberalization. Analysts are hoping its declaration indicates a willingness to share its 1.3 billion consumers with foreign partners.

Nothing from last weekend's joint ministerial statement could have sounded better than this.

-- The Straits Times/Asia News Network