BUSINESS

Sea disputes cloud focus on trade at Asia-Pacific summit as soured Japan-China ties bubble

10/08/2013 01:39 EDT | Updated 12/07/2013 05:12 EST
BALI, Indonesia - Soured ties between China and Japan bubbled beneath the surface of a regional summit after Beijing was announced as the host of next year's meeting, putting renewed focus on the testy relationship between the two Asian powers.

The official agenda for the 21-member Asia-Pacific Economic Cooperation gathering is mainly about forging a consensus on freer trade, but in speeches and meetings, territorial tangles between China and most of its neighbours were a constant subtext.

The APEC summit, held this year on the Indonesia resort island of Bali, gave regional leaders a chance to talk through issues in formal and informal settings. The grouping of nations and territories includes over 3 billion people and more than the half the world economy, ranging from tiny Brunei to powerhouses such as China, Japan and the U.S.

"The close collaboration will result in a win-win situation, especially at a time when the world economy has yet to fully recover," said Indonesian President Susilo Bambang Yudhoyono, concluding the summit Tuesday.

Most of APEC's final declaration was a reiteration of longstanding goals. Yudhoyono said one new initiative was to consider threats to food, water and energy security from a "holistic" point of view, encompassing population growth and climate change. Leaders of the dozen countries participating in the Trans-Pacific Partnership, a U.S.-led free trade initiative, were due to issue a statement later Tuesday.

Much of the work at the summit was done in meetings on the sidelines, though that did not include any progress on a stalemate between China and Japan over disputed islands in the East China Sea.

Japan Prime Minister Shinzo Abe says the door is open to dialogue, but Tokyo is steadfastly refusing to discuss the conflicting claims over the uninhabited islands called the Senkakus in Japan and Diaoyus in China. With the two sides so far apart, the closest the two leaders may have gotten to speaking at APEC was a brief handshake.

China will host APEC's annual summit next year and many preliminary meetings before that. The recent souring of ties, which flared into anti-Japanese riots last year, prompted top Beijing officials to stay away from an annual meeting of the International Monetary Fund in Tokyo in 2012.

Japanese officials said they did not anticipate any problems with the APEC meeting in Beijing. But they were more forthcoming when asked about Chinese criticism of defence collaboration between Japan, Australia and the U.S.

"These three countries are not only bound by treaties, but these countries value openness and rules-based structures," said Tomohiko Taniguchi, a councillor in Abe's Cabinet. "We have to team up together to preserve the freedom of movement of goods in these public spaces."

Territorial disputes between Southeast Asia and China that centre on Beijing's vast claims to the South China Sea were also under discussion.

The 10 members of the Association of Southeast Asia Nations hope to agree a common policy in handling territorial disputes, an aim backed by Japan. Beijing, in principle committed to it, says it is not in a hurry to quickly conclude the talks.

Philippine President Benigno Aquino III, speaking to Filipino journalists Monday evening, said there was some progress in talks between ASEAN and China toward drafting a code of conduct to govern how the parties solve territorial disputes.

"I am not saying that the signing of the Code of Conduct is near," Aquino said. "But to convince everyone to talk about — and it is really being discussed — I think is progress in finding a solution to the rift over sovereignty."

He said that after being on the backburner for 10 years, "the issue is now at the forefront of everyone's thinking."

As many in the region worry over mishaps that could trigger further conflict, both China and Japan sought in Bali to reassure their neighbours over their peaceful intentions — Japan because of its wartime past, China because of its growing assertiveness as a rising economic and military power.

Meetings between Abe and his Vietnamese and Indonesian counterparts touched on their disputes with China over islands and waters in the South China Sea, said Kuni Sato, press secretary at the Japanese Foreign Ministry.

"Both sides said it was important to have dialogue on issues to be resolved, including the Law of the Sea," Sato said Abe told Vietnamese President Truong Tan Sang.

The issue also arose in Abe's meeting with Indonesia's president, she said.

Many of the leaders gathered in Bali will go straight to Brunei for the annual ASEAN summit, where the same issues could take on an even higher profile.

Abe, who has been exasperated by Chinese incursions into waters near the Senkakus, told business leaders Monday that Japan is "aspiring to become a pro-active contributor to stability and security in the world as a country that observes international norms." Describing APEC as a family of harmony, Xi told the same group "China is ready to live in amity with others."

President Barack Obama's absence from the APEC summit due to the impasse with Congress over the budget was a letdown for other leaders.

Secretary of State John Kerry sought to fill the Obama vacuum by saying nothing will shake America's commitment to Asia and that the government shutdown in Washington will soon be over and forgotten.

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Associated Press writers Hrvoje Hranjski in Manila, Philippines and Niniek Karmini, Stephen Wright and Margie Mason in Bali, Indonesia contributed.