APEC to pursue closer cooperation amid economic headwinds

In late 1993, in a classroom at the University of Hawaii at Manoa, the late professor Seiji Naya introduced the concept of open regionalism, the unique feature of the Asia-Pacific Economic Cooperation established in 1989. Unlike other trade arrangements such as the European Union and the North American Free Trade Agreement, open regionalism meant that agreements reached among APEC members would be extended to non-members as well, fostering broader economic integration.

Naya, who served as the chief economist at the Asian Development Bank in the 1980s and later became the director of the State of Hawaii Department of Business, Economic Development and Tourism, was a champion of cooperation. He even led a Hawaii delegation to Shanghai to explore cooperation opportunities.

His course on Asian economic development was among the few economics classes I took, and the open regionalism advocated by APEC has greatly contributed to the Asia-Pacific becoming the most dynamic and fastest-growing region in the world.

Japan and the four Asian Tiger economies — the Republic of Korea, Singapore, China's Hong Kong, and China's Taiwan region — were the success stories much talked about in those days. When APEC was launched in 1989, China's GDP was only $350 billion, a fraction of the $19.5 trillion it reached in 2025. China is now the largest trading partner for more than 150 economies.

Other APEC economies, such as Indonesia, Malaysia and Vietnam, have also experienced remarkable growth in the past decades. The 11-member Association of Southeast Asian Nations, now the world's fifth largest economy, is on track to become the fourth largest in the coming years.

Free trade policies and an open global economy have long been the recipe for success for APEC members.

However, the global economy faces strong headwinds today, such as rising protectionism, dysfunction of the World Trade Organization and geopolitical tensions, all of which threaten to erode dynamism and jeopardize future growth prospects.

Shenzhen, the venue for this year's APEC leaders' meeting, exemplifies the economic transformation of the bloc.

A fishing village back in the 1970s, it has evolved to become a global technology powerhouse and home to companies such as Huawei, Tencent, ZTE, DJI and BYD. Its population has grown exponentially from 330,000 in 1980 to 18 million today.

During my visit to Shenzhen in early January, I could barely recognize the city I had seen in the 1990s. Shenzhen is a miracle. It has become the third largest city in China in terms of GDP, trailing Shanghai and Beijing. Its GDP of about $560 billion last year was slightly bigger than that of Vietnam.

Its port is the fourth largest in the world. The city is a showcase of China's success story of openness, innovation and economic integration not just with the Asia-Pacific but with partners from around the world.

The APEC economies, which account for roughly 60 percent of global GDP, are highly integrated today. Notably, intra-regional trade accounts for about half of the total trade by APEC members. So any threat of tariff wars and decoupling risks disrupting the highly integrated supply chains of the 21 APEC members.

As APEC leaders gather in Shenzhen, they will undoubtedly discuss many important global and regional issues, including the ongoing conflicts in the Middle East and Europe. However, the focus should definitely remain on building an Asia-Pacific community that prospers together, aligning with the theme of this year's meeting.

The leaders are expected to prioritize sustaining the region's dynamism through openness, cooperation and innovation, steering clear of confrontation, geopolitical conflicts, bullying tactics, decoupling and coercive tactics that force countries to choose sides.

The APEC leaders' meeting should be about expanding cooperation and there should be no room for those who advocate rivalry.

The author is a China Daily columnist.

chenweihua@chinadaily.com.cn