Asian nations not forced to choose between US and China despite trade war, senior American diplomat says

Washington is not forcing Asian companies or nations to choose between trading with the United States and China, a senior American diplomat said in Hong Kong on Tuesday. However, in pointed remarks that appeared to be directed at Beijing, the US Ambassador to Indonesia, Joseph Donovan, railed against “unfair protectionist measures” that “undermine growth”. “Our vision for a free and open Indo-Pacific excludes no nation. It is important to emphasise that we’re not asking anyone to choose between the US and China,” Donovan said. “Like the US, China is an Indo-Pacific country. We welcome their instructive participation in upholding an international system based on clear and transparent rules. Indeed we welcome investment from all countries if it is commercially motivated, transparent and follows international rules.” Donovan said that “no other country has invested more in the Indo-Pacific region than the United States”. He added: “Unlike others, where we invest, we create jobs.” Donovan, who formerly served as US Consul General for Hong Kong and a diplomat in Seoul, Taipei and Tokyo, made his remarks at an American Chamber of Commerce (AmCham) event in Hong Kong. His speech attempted to lay out a vision of US commitment to Asia-Pacific based on “reciprocal and balanced bilateral trade and investment relationships”. Donovan highlighted the near-US$1 trillion investment the US had made in the Indo-Pacific region in 2017, which has almost doubled since 2009. However, Donovan’s remarks came as US-Chinese commercial relations seem to worsen on a daily basis. US-China trade war forcing American companies overseas Alongside a full-blown trade war, a diplomatic dispute over the detention of Meng Wanzhou, the chief financial officer of Chinese technology giant Huawei, has threatened to boil over into a full scale international crisis. Meng is reportedly to sue the Canadian government, which is set to extradite her to the US to face trial, while two Canadian prisoners in China have now being charged with stealing state secrets. Indeed, allegedly under pressure from the US, other countries have banned Huawei from bidding for contracts in the roll-out of 5G networks, including Australia. However, Michaela Browning, the Australian Consul General for Hong Kong, said that her country’s trade policy was evidence that you can maintain strong ties with the US and China, both of which have free trade agreements with Australia. “You can engage with both together enthusiastically,” she said. Donovan’s speech also came at a time when many question the US’ commitment to the multilateral trading system, thanks in part to US President Donald Trump’s decision to withdraw from the Trans-Pacific Partnership. Indeed, this withdrawal was criticised on multiple occasions over the AmCham event’s two day programme. Another speaker, James McGregor, Greater China chairman of the consultancy firm APCO Worldwide, described the US’ withdrawal as “the stupidest thing” it could have done if it was serious about maintaining its dominant presence in Asia-Pacific. How I almost got a job at the world’s largest iPhone assembly plant Further to this and the US-China trade war, the Trump administration has also issued tariffs and duties on imports of goods such as steel and aluminium on other US trading partners in the region, most notably Japan and South Korea. Donovan’s address built on remarks made by US Consul General in Hong Kong, Kurt Tong, who spoke on Monday about the US vision for the region being “much deeper than a rejection of not good practice, it is an embrace of good practice, seeking mutually advantageous and high quality investment and trade”. Tong appeared to criticise local media coverage of the US approach, saying: “There has been a lot of talk in the region, and if you read Hong Kong newspapers you get a lot of this, of presenting US vision for the region as a negative one.” “Certainly there are problems with China’s approach to economic relationships, particularly with respect to transparency, governance, debt sustainability.” Tong recently criticised the intervention of China in Hong Kong’s affairs, saying that “certain recent events in Hong Kong have raised cautionary flags for some US observers, as they consider the sustainability of Hong Kong’s high degree of autonomy going forward”. How weak iPhone demand led to mass resignations at this factory Donovan chose to focus on the substantial US trade and investment ties with the rest of Asia and their potential expansion, particularly in the areas of digital economy, infrastructure and energy. In particular, he said that America’s abundant reserves of natural gas could help satisfy Asia’s massive demand for energy over the coming decades. “Gas consumption in Indo-Pacific will account for 80 per cent of consumption over the next decade, requiring almost US$80 billion in liquefied natural gas (LNG) infrastructure investment in Asean and India alone. Today, the US has 30 billion cubic metres of LNG export capacity with additional capacity expected to come online,” Donovan said.