APEC 2015 Highlights Regional Goals And Domestic Strengths – Analysis


The Philippines will play host to the 2015 Asia-Pacific Economic Cooperation (APEC) Summit this week, taking on the torch passed by China, which hosted the key regional event last year. The packaging and messaging of APEC’s theme and its priorities by both China in 2014 and the Philippines this 2015 suggest an attempt to reflect their domestic agendas and leverage on their relative strengths as they advance regional goals.

Last year’s APEC theme was “Shaping the Future through Asia-Pacific Partnership,” a very resonant theme considering the flurry of regional, as well as global, initiatives being launched and led by China. China’s the BRICS Bank, “One Belt, One Road” (OBOR) and the Asian Infrastructure Investment Bank (AIIB), both nicely complemented the objectives of APEC. China had also invested strong efforts in cultivating and developing new partnerships (e.g. strategic partnerships) with many countries in the region and the world. Among the actions pledged to be undertaken during the 2014 APEC Leaders’ Declaration were the following: 1) Advancing regional economic integration; 2) Promoting innovative development, economic reform and growth; and 3) Strengthening comprehensive connectivity and infrastructure development. Under advancing regional economic integration, APEC member-economies pledged to pursue free and open trade and investment, advance global chain development and supply chain connectivity, and strengthen economic and technical cooperation among themselves.

In terms of promoting innovative development, emphasis was made on the areas of economic reform, new economy, innovative growth, inclusive support, and urbanization—areas that have also attracted the attention and resources of the Chinese leadership domestically. Deepening the economic reform and moving away from the export-led and manufacturing-driven growth model that propelled it to become the world’s second largest economy has preoccupied Chinese economic planners of late. Stimulating local consumption, support for new business platforms—such as electronic or mobile commerce—and encouraging outward investments have become the new emerging characteristics of the Chinese economy. Working with APEC can and will help China realize this.

Chinese companies are also moving up the value chain, gradually shedding the image of being exporters of inexpensive, but lackluster quality, goods. Acquiring overseas assets enabled many Chinese firms to access sophisticated technology, new managerial know-how and expertise, and penetrate new markets, all of which contribute to the growing international competitiveness of Chinese brands. Accelerating urbanization and improving urban planning and delivery of services to city residents are also key goals for the Chinese government. Furthermore, transport connectivity and infrastructure development also jive with China’s OBOR and AIIB projects. Progress on this front is already being made, such as in the case of the Thai section of the proposed Singapore-Kunming Rail Line, which, when completed, will link all the capitals of mainland Southeast Asia (except Kuala Lumpur) with the Yunnan capital. The convergence of APEC’s regional goals and China’s domestic development and foreign politico-economic policy goals is, thus, very much apparent.

Turning to the Philippines, the theme of this year’s APEC Summit to be held in Manila is “Building Inclusive Economies, Building A Better World,” a theme that suggest the satisfaction of more immediate needs without any allusion to regional leadership aspirations. Inclusiveness, here, has three levels – domestic, regional, and macro. The Philippine economy made significant gains in recent years under the Aquino Administration; however, concerns were raised about the need for these economic achievements to trickle down to those in the bottom rung of society. Hence, part of the government’s goal is to create more jobs, thus allowing for the lower and middle classes to also benefit from the improving economy. In this aspect, the lessons from the Chinese experience in uplifting millions of people out of poverty could be instructive. At the regional level, focus is given on expanding access to economic opportunities facilitating people to realize their full potentials. Finally, at the macro level, inclusive growth aims to bridge the gap between more developed and less developed APEC members in order to maximize the benefits of a more open trade and investment regime. In terms of priorities, 2015 APEC Summit aims to: 1) Invest in human capital development; 2) Foster small and medium enterprises’ (SMEs) participation in regional and global markets; 3) Build sustainable and resilient communities; and 4) Enhance regional economic integration agenda. The fourth one is a clear continuation from the 2014 Summit goals.

Like the case for China’s 2014 hosting, these 2015 agenda resonates clear Philippine domestic imperatives. As a major labor exporter and with a burgeoning services sector, the Philippines is projected to work well with investments in human capital development. Encouragement and support for local SMEs is also another policy direction for the country, and working with APEC may enable Filipino SMEs to tap into a bigger regional market. Building sustainable and resilient communities reflects the country’s desire to mitigate the adverse socio-economic impacts of natural disasters, such as typhoons, that perennially hit the country. This vision is also regionally shared due to the location of various APEC members in the Cicum-Pacific Ring of Fire, a string of active volcanoes located along the Western Hemisphere, the Asia-Pacific, and the Pacific monsoon belt. Improving the ability for disaster-prone communities to recover from natural disaster setbacks will greatly help in fostering regional economic stability.

In relation to enhancing regional economic integration, the 2015 APEC Summit envisions adherence to the 1994 Bogor Goals. This goalaims for a phased establishment of a free and open trade and investment regime in the region with developed members set to opening their economies by 2010 and developing members by 2020. Trade in services, which accounts to almost half of APEC member economies’ GDP, is also a major component at the heart of the push for regional economic integration. In line with this, the Summit aims to further promote connectivity, particularly with regards to people-to-people and institutional connectivity within the region. Moreover, this year’s Summit also hopes to create stronger regional financial institutions to better respond to prospective economic shocks such as those that wreaked havoc in the region in 1997 and 2008.  Finally, it also aspires to strengthen the global supply chain and global value chains in the APEC region, another carry-over from the 2014 Summit.

Overall, there appears to be a strong sense of continuity between the past and this year’s APEC Summits. Both Summits look to continue to strengthen and advance supply chain development and regional economic integration. China and the Philippines appear to have made good use of their hosting privilege to marry their domestic agendas with that of the region and to leverage on their comparative advantages. China, for instance, being an emerging outbound infrastructure investor, stressed hard projects, such as infrastructure connectivity, among others, while the Philippines, being a major labor exporter with a vibrant services sector, emphasized soft projects, such as skills development and institutional capacity-building. Thus, despite the obvious challenges in their current bilateral relations, both countries seem to perform their obligations in advancing the common economic interests of the region.

This article was published by China-US Focus and reprinted with permission.

Lucio Blanco Pitlo III

Lucio Blanco Pitlo III is a Research Fellow at the Asia-Pacific Pathways to Progress Foundation. He was a lecturer at the Chinese Studies Program at the Ateneo de Manila University and the International Studies Department at the De La Salle University and contributing editor (Reviews) for the journal Asian Politics & Policy. He is also a member of the Board of Directors of the Philippine Association for Chinese Studies. He obtained his Master of Laws from Peking University and is presently pursuing his MA International Affairs at American University in Washington D.C.

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