Hu’s Messages From Singapore

Dressed in Asian garb and smiling for the cameras, the leaders of the 21 nations that make up the Asia-Pacific Economic Cooperation (APEC) looked as though they were at a love fest in Singapore this weekend. For those who cared to read between the lines, though, President Hu Jintao of China, the country whose importance in Asian affairs is increasing, just as that of the United States wanes, delivered some pretty clear messages.

Trade

“Protectionism will not help any country move out of the crisis; it can only pose a threat to the fragile momentum of economic recovery,” Hu said at a keynote speech at the APEC CEO Summit.  “To reverse the global economic downturn, the world must oppose protectionism of various forms, President Hu told Asia-Pacific business leaders.

President Hu elaborated: “The international financial crisis has fueled trade and investment protectionism of various cues, and developing countries, in particular, have been victimized by a mounting number of unreasonable trade and investment restrictions.”

Just in case it wasn’t clear which countries his president was referring to, Vice-Minister of Commerce, Yi Xiaozhun, cleared things up when he pointed out last Friday that China has become one of the biggest victims of protectionist measures. According to his Ministry of Commerce, 19 economies launched 88 probes into Chinese products, involving $10.2 billion of export goods in the first nine months of 2009. During this period, the United States alone carried out 14 probes into Chinese products, affecting exports valued at $5.84 billion, soaring by 639 percent from a year earlier, according to the Ministry.

I suspect that President Obama will hear this message more than a few times in the coming days.

Climate Change

China has received a great deal of praise in the past several months regarding its position on climate change. President Hu made some clear commitments at the G20 meeting in Pittsburgh which he repeated in Singapore. At the APEC meeting, President Hu reiterated China’s promise to cut carbon dioxide emissions per unit of gross domestic product (GDP) by a “notable margin” by 2020 from the 2005 level.

There is no question that China is taking environmental issues seriously. Heavily polluting plants are being closed, loans and approvals for companies to do IPOs are being conditioned on compliance with environmental regulations, government officials are being evaluated based upon actions taken to improve the environment, and China set a goal in its Eleventh Five-Year Plan to reduce the amount of energy needed to produce one unit of GDP by 20 percent from 2005 to 2010. China remains less energy efficient than developed countries like the United States, so it will continue to set such goals until it reaches comparable levels.

Through the efforts of Al Gore and others, however, the arguments for energy efficiency and environmental protection are now being framed in the rhetoric of “climate change,” and China has done a masterful job of taking the high ground on this issue by setting goals to “cut carbon dioxide emissions per unit of GDP,” which of course is another way of saying that it will improve its energy efficiency. In the meantime, China has other metrics in mind for developed countries like the United States.

China’s position on climate change was set forth in a document published by its National Development and Reform Commission (The “NDRC Document”) in May of this year. In Singapore, President Hu repeated one of the central tenants of China’s position, which is the “Principle of Common but Differentiated Responsibilities” between developed and developed countries.

The NDRC Document states that:

Developed countries shall take responsibility for their historical cumulative emissions and current high per capita emissions to change their unsustainable way of life and to substantially reduce their emissions and, at the same time, to provide financial support and transfer technology to developing countries. Developing countries will, in pursuing economic development and poverty eradication, take proactive measures to adapt to and mitigate climate change.

To remedy the current situation, the NDRC Document says that “Developed countries shall undertake measurable, reportable and verifiable legally-binding deeper quantified emission reduction commitments,” and that, “given their historical responsibility and development level and based on the principle of equality, developed countries shall reduce their GHG emissions in aggregate by at least 40% below their 1990 levels by 2020.”

Absolute reductions in overall emission levels of greenhouse gases for developed countries versus increased carbon efficiency goals and financial support for developing countries–China’s position makes it very clear that, while every country is at least paying lip service to the issue of climate change, there is a huge gap in opinion between developed and developing countries about how it should be addressed. It’s no wonder that no agreement on climate change was reached at APEC, and why none will be reached in Beijing.

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