November 23, 2014

SNAPSHOT

China Scores
And What the United States Should Do Next
Matthew Goodman and Ely Ratner
MATTHEW GOODMAN is senior adviser for Asian economics and holds the William E. Simon Chair in Political
Economy at the Center for Strategic and International Studies. ELY RATNER is senior fellow and deputy director of
the Asia-Pacific Security Program at the Center for a New American Security.
China is back. Nearly two centuries after it lost its traditional place at the center of Asian affairs, Beijing has begun
giving shape and substance to its renewed leadership on the regional stage.
This was on full display at the recently concluded meeting of the Asia-Pacific Economic Cooperation (APEC) forum,
a grouping of 21 economies from both sides of the Pacific. As this years host, Beijing not only rolled out the red
carpet for leaders from the rest of the region, it also announced a series of major initiatives designed to place China at
the center of Asias economic future.
Chinese President Xi Jinping articulated his vision for an Asia-Pacific dream of shared development and
prosperity, notable less for its inflated rhetoric than the concrete proposals and resources China is putting forward to
realize it. Backed by promises of nearly $100 billion in overseas loans and investments, Beijing used this years
APEC meeting to establish a new multilateral infrastructure lending bank, launch a Silk Road Fund to connect
China with its westward neighbors, and advance progress toward a region-wide Free Trade Area of the Asia-Pacific
(FTAAP). In doing so, Xi apprised his visitors that, China has the capability and the will to provide more public
goods to the Asia-Pacific and the whole world.
Chinas renewed regional activism is coming more rapidly than anyone expected. Having gone decades without
seeing another power quite so capable and confident, Washington will have to adjust accordingly, following four
principles.
First, economics is king in Asia and will have to feature front and center in U.S. policy in the years to come.
Although the regions military competitions and territorial disputes are all too real, the fact remains that leadership
and influence will flow from the wallet, not the gun. For that reason, the Obama administration is right to be striving
hard to conclude negotiations on the Trans-Pacific Partnership, an agreement among 12 countries that would cement
high standards in regional trade. To do so, the president will have to work closely with the new Republican Congress

to pass Trade Promotion Authority.

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