China criticises Biden's regional IPEF economic pact

SUVA • Chinese Foreign Minister Wang Yi criticised President Joe Biden's wide-ranging economic framework for failing to lower tariffs, in some of the strongest disapproval yet of the US' plan to counter Beijing's influence in Asia.

"The so-called Indo-Pacific Economic Framework (IPEF) recently rolled out by the US claims to build a free, open, and inclusive new order, but how can any economic frame call itself free if it doesn't lower tariffs?" Mr Wang said on Monday during a visit to Fiji, according to a statement posted on the Foreign Ministry's website.

"How can it be called inclusive if it purposefully excludes China, the largest market in the region and in the world?" It wasn't clear under what circumstances Mr Wang made the comments.

Fiji last week became the 14th country and the first Pacific Island nation to join Mr Biden's IPEF. China this week failed get 10 Pacific Island nations on board with a sweeping trade and security deal during a summit attended by Mr Wang in Fiji as part of his rare 10-day visit to the region.

Beijing had reportedly proposed a free-trade deal and a special envoy for Pacific Island nations, but the plan was shelved after some of the countries expressed concerns about specific elements in the proposal.

Despite their small populations and economies, each Pacific state represents a vote at international forums such as the United Nations. They also control vast swathes of resource-rich ocean and access to a region with strategic military significance.

Mr Wang said IPEF sought to "confine other countries" with the United States' standards and rules. "The US is attempting to politicise and weaponise economic affairs, and even treat the matter ideologically," he said. "Such a practice violates basic norms of economics. It is putting shackles on the free market."

Mr Wang yesterday signed agreements in Tonga for police equipment and fisheries cooperation.

He signed several bilateral agreements with Tonga's Prime Minister Siaosi Sovaleni and also visited King Tupou VI at the Royal Palace, Tonga's government said in a statement.

"Both meetings focused on mutual respect and the common interest of the people of China and Tonga," it said.

Agreements between the two countries' disaster management agencies and for China to provide a police laboratory and customs inspection equipment as well as a memorandum would assist Tonga's long-term development, it said.

Mr Sovaleni "conveyed Tonga's gratitude to China with the relief assistances offered after the volcanic eruption... and tsunami".

Tonga, which was hit by a volcanic eruption and tsunami in January, owes two-thirds of its external debt of US$195 million (S$268 million) to China's Export-Import Bank, its budget shows.

Australia and New Zealand are its biggest donor nations, highlighting the squeeze some Pacific islands face as geopolitical tensions between China and US allies ratchet up.

In the aftermath of the eruption, Australia and New Zealand coordinated allies in a relief operation involving defence flights and naval vessels. China also sent aid and equipment on commercial and naval vessels in a highly publicised relief effort.

Meanwhile, New Zealand's Prime Minister Jacinda Ardern was to meet Mr Biden yesterday at the White House, where she said she expects to discuss ongoing US engagement in the Indo-Pacific region.

"Top of mind for us, alongside the situation in Ukraine, is the situation in our region," she told New Zealand media at a press conference in Washington DC. "We'll be encouraging the United States to really continue and strengthen engagement in our region including economic engagement, which is really critical to our region."

The meeting has taken on greater importance as New Zealand in recent weeks has raised concerns about China's presence in the region following news that Beijing had signed a security pact with the Solomon Islands.

On Monday, the virtual meeting hosted by Mr Wang in Fiji with counterparts from the 10 island nations deferred consideration of the sweeping agreement spanning policing, security, fisheries, data and a free trade zone, proposed by China.

A draft communique and five-year action plan was leaked ahead of the meeting, amid criticism the deal would bind the nations closely to China, and raise geopolitical tensions with the US.

BLOOMBERG, REUTERS