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