Apec rivalry is only a part of broader Sino-US relationship
Andrew Leung says the economic tussle on display at the Apec summit between the US and China is only one aspect of their relationship, as global growth requires their willing cooperation
Amid crises over Ukraine and the Middle East, the world can be forgiven for failing to appreciate the full significance of China's plan to create a Free Trade Area of the Asia-Pacific. This was endorsed in Beijing by all 21 economies represented in the Asia-Pacific Economic Cooperation forum.
Against the background of the Asean-China Free Trade Area, America's pivot to Asia and Trans-Pacific Partnership, and Russia's recent energy tilt towards China, the broad-based support for the Apec initiative underlines the promise of what is likely to be a new Asia-Pacific Century.
Trade agreements do not by themselves create economic realities. So what are the underlining economic fundamentals likely to make the Asia-Pacific region the promised land?
The region accounts for 40 per cent of the world's population and 55 per cent of global gross domestic product. China is the hub of a global supply and value chain and the destination of choice to capture a rapidly rising critical mass of middle-class consumers. It's no wonder that the vast majority of Asia-Pacific nations depend on China for job creation and economic well-being. Likewise, Asia-Pacific growth driven by China will offer plenty of opportunities for US businesses and ingenuity.
There is increasingly less doubt that China will overtake the US as the world's largest economy in nominal terms within a decade or so, if not sooner. The usual caveats are that China will remain a poor country in per capita terms for many decades and that it lacks innovation.
While these caveats are valid, they do not alter the fact that overall economic weight matters much more than per capita measurements. Think Monaco and Macau, along with other smaller states or entities which rank richer than the US in per capita terms.