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G20: Hangzhou

By SCMP

G20: Hangzhou

Barack Obama to raise corporate tax avoidance at G20 summit in China, says White House

South China Sea disputes, sagging global economy and climate change also among US president’s concerns as he heads to Hangzhou this weekend, say analysts

PUBLISHED : Friday, 02 September, 2016, 12:21pm
UPDATED : Friday, 02 September, 2016, 12:21pm

US President Barack Obama is likely to have discussions with world leaders at the G20 meeting in China about controlling corporate tax avoidance and creating a fairer global tax system, the White House said.

White House spokesman Josh Earnest said he did not expect progress on corporate tax avoidance from the G20 meeting of global economic leaders that runs from Sunday to Monday in Hangzhou.

“But I would anticipate that this is an issue that the President will engage in, in the context of discussions at the G20,” Earnest said.

The EU ruled this week ruled that Apple must pay 13 billion euros (HK$112.6 billion ) in back tax payments, a decision the Obama administration has criticised.

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Obama starts his last trip to Asia on Saturday as US president, aiming to put a final stamp on his signature policy shift toward the Pacific, but distracted by crises ranging from Brexit to the battle against Islamic State.

With the clock ticking down on his presidency, Obama’s visit to China will underscore the challenges he has faced with a rising world power that is both an economic partner and strategic rival.

His final meetings in the region with Chinese President Xi Jinping could set the tone for his White House successor, who will be elected in November and take office in January.

Obama will seek to highlight his legacy of stronger ties with Southeast Asia, particularly during the first-ever US presidential visit to Laos, and his success in elevating the issue of climate change on the world stage.

But there will be few bright spots in talks with fellow world leaders, who are grappling with the sagging global economy, fallout from Britain’s vote to leave the European Union, increasing suspicion of globalisation, the fight against Islamic State militants and territorial disputes in East Asia.

Derek Chollet, a former defence adviser to Obama, said one of the challenges the United States faces is reassuring governments in Asia that the United States means what it says when it comes to rebalancing towards the region.

“Asia partners are suspicious that even if we really mean it, that we’re easily sidetracked,” said Chollet, author of The Long Game, a book about Obama’s foreign policy.

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Obama will start his visit on Saturday meeting Xi. The leaders have forged cooperation on combating climate change and curbing Iran’s nuclear drive, but have failed to narrow their countries’ main differences.

Irritants include US accusations of Chinese cyber hacking, disputes over trade and Beijing’s pursuit of contested claims in the South China Sea.

Michael Green, a top Asia adviser to former Republican President George W Bush, said he did not expect the Obama-Xi meeting to yield much. “No grand joint declaration as we saw early in the administration, no celebration, perhaps some agreements on climate change, but a pretty rough and scratchy relationship,” Green said.

Obama faces another tricky meeting when he holds talks with Nato ally Turkish President Tayyip Erdogan, with relations strained over strategy on Syria’s civil war and concerns about Erdogan’s crackdown on opponents after July’s failed coup.

White House aides have left open the prospect of an informal encounter with Russian President Vladimir Putin, which whom Obama is sharply at odds over Syria and Ukraine.

China will closely watch Obama’s first meeting with brash new Philippines President Rodrigo Duterte, slated for Tuesday at an East Asia summit in Laos. The Philippines, with US backing, won a challenge against China’s South China Sea claims at an international arbitration court in July.

Duterte recently insulted the US ambassador, calling him a “gay son of a whore”. Evan Medeiros, Obama’s former top Asia adviser, said such comments plus Duterte’s scepticism about the US relationship meant that trust needed to be rebuilt.

The White House has said Obama will not pull his punches over human rights concerns, which include thousands of extra-judicial killings since Duterte took office two months ago, according to date released this week.

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Strains with Duterte could add to Obama’s difficulties in forging a united front on the South China Sea with Southeast Asian partners.

China may see an opportunity to “drive a wedge” between the United States and Philippines as Beijing seeks an arrangement with Manila over the South China Sea, Medeiros said.

Western diplomats in Beijing, however, said the Chinese government had its own difficulties reading Duterte.

“He seems to change his mind every 24 hours,” said one senior Western envoy, referring to Duterte’s China policy.