HONOLULU (Reuters) - Barack Obama and Hu Jintao presented dueling trade agendas as an antidote to weak global growth as the U.S. and Chinese presidents faced off on Saturday at a Pacific summit where Europe’s debt crisis loomed large.
The heads of the world’s two biggest economies laid bare their countries’ growing rivalry and some of their entrenched differences in back-to-back speeches to executives at the Asia-Pacific Economic Cooperation summit in Honolulu.
Obama took China to task for currency and trade practices — issuing a veiled threat of more punitive action unless it “plays by the rules” — as he sought to reassert U.S. influence in a region he said was more vital than any other to America’s interests.
Hu pushed back, insisting on more clout for China as an emerging global power. He also made clear Beijing prefers to work through existing global trade architecture rather than allowing itself to be subject to U.S.-led efforts to pry open Asia-Pacific markets.
Obama and Hu will meet face to face later on Saturday.
Hosting the APEC summit in his native Hawaii, Obama said earlier the “broad outlines” of a deal had been reached on the Transpacific Partnership, a regional free trade pact being negotiated by the United States and eight other countries.
It was hailed by U.S. officials as the summit’s signature achievement and a possible template for an eventual APEC-wide free trade zone. APEC’s 21 members make up the world’s most economically dynamic region and account for more than half of global output.
The deal being sought with China’s neighbors also reflected a U.S. drive to counter Beijing’s competitive threat.
With Europe’s debt crisis sending shock waves around the globe, this year’s APEC meeting was emerging as a forum to push the euro zone to sort out its problems and for APEC members to strengthen defenses against the fallout.
Fostering free trade is one of the few steps leaders can take to spur global growth when fiscal and monetary measures are virtually exhausted in many developed countries.
While insisting the United States was “rooting for China to grow,” Obama urged Beijing to do more to allow its currency to appreciate, create a level playing field on trade and prevent theft of U.S. intellectual property.
“The bottom line is that the United States can’t be expected to stand by if there’s not the kind of reciprocity in our trade relations and our economic relationships,” Obama said. “Where we see rules being broken, we’ll speak out and in some cases we’ll take action.
Speaking before Obama, Hu sought to soothe the concerns of foreign businesses over market conditions in China. He repeated China’s commitment to reform and opening up its markets but he offered little new to address concerns that American business cannot compete fairly.
At the same time, he insisted China be given what it sees as its rightful place in world affairs.
“The new mechanism for global economic governance should reflect the changes in the world economic landscape,” Hu told executives. “It should observe the principle of mutual respect and collective decision-making and increase the representation and voice of emerging markets and developing countries.”
China has been reluctant to sign trade deals that would subject it to U.S-led efforts to further open its economy to foreign players because that would put competitive pressure on its state-owned enterprises.
Hu told the business leaders he favors pursuing more open trade through bodies such as the World Trade Organization, saying “we should uphold the multilateral trading regime and deepen regional integration ... fulfill our commitments, firmly oppose and jointly resist protectionism of all forms.”
Hu has touted trade with China as a way to boost U.S. growth and help Obama achieve his goal of doubling exports. With Europe edging toward a recession, fast-growing Asia — led by China — is vital to sustaining global economic growth.
Developing Asia is expected to grow 8 percent in 2012, roughly four times faster than the United States, according to International Monetary Fund forecasts.
Reporting by Reuters APEC team; Writing by Matt Spetalnick and Emily Kaiser; Editing by John O'Callaghan