APEC 2025

Why in the News?

1. Xi Jinping used the APEC leaders’ platform in Gyeongju to publicly defend multilateral trade and cast China as a steward of regional economic cooperation.
2. S. President Donald Trump left before the leaders’ summit after a high-profile bilateral meeting with Xi, shifting diplomatic dynamics at the forum.

Key Highlights

1. Bilateral U.S.–China Meeting Set the Context
   1. President Donald Trump and President Xi Jinping met on the sidelines of APEC before the summit officially began.
   2. The two leaders agreed to ease ongoing trade tensions, focusing on limited issues such as S. tariff reductions and China’s resumption of soybean purchases.
   3. Beijing also pledged to allow rare earth exports, easing global concerns about supply disruptions.
   4. This meeting helped calm financial markets and set the diplomatic tone for the upcoming APEC discussions.
2. Trump’s Early Departure Altered Summit Dynamics
   1. Soon after the bilateral meeting, Trump departed South Korea, skipping the official APEC leaders’ session.
   2. His exit symbolised the S. preference for bilateralism over multilateral platforms.
   3. The absence of the U.S. President created a diplomatic vacuum, reducing American influence in shaping the final communiqués.
   4. This shift allowed other powers—particularly China—to play a more visible role in agenda setting.
3. Xi Jinping Emerged as the Voice for Multilateralism
   1. Xi took centre stage at the Gyeongju summit, positioning China as a defender of free and open trade.
   2. He called for strengthening multilateral cooperation, protecting global supply chains, and resisting protectionist tendencies.
   3. Xi’s speech framed China as a stabilising force in the Asia-Pacific, seeking to fill the void left by U.S. disengagement.
   4. The move reflected Beijing’s long-term strategy to lead regional economic governance through multilateral forums.
4. APEC’s Consensus Model Faced Strain but Endured
   1. With competing interests among members, the APEC process struggled to produce a strong, unified outcome.
   2. The summit discussions centred on trade facilitation, digital economy, supply-chain resilience, and green growth.
   3. The final statements reflected a delicate balance—acknowledging cooperation while avoiding confrontation over U.S.–China rivalry.
5. Broader Themes: Short-Term Relief, Long-Term Rivalry
   1. The bilateral relief between Washington and Beijing provided temporary economic relief and stabilised global markets.
   2. Yet, the summit underscored deep structural rivalries over technology standards, trade governance, and geopolitical influence.
   3. The event illustrated a dual trend: short-term diplomatic pragmatism alongside long-term competition for leadership in the Indo-Pacific.
   4. For many smaller economies, this competition presents both risks of fragmentation and opportunities for strategic balancing.

Implications for India

1. Strategic Balancing Opportunity:
   1. With the S. disengaging from multilateral forums and China taking the lead, India can project itself as a moderate and stabilising power in Asia-Pacific economic governance.
2. Trade and Supply Chain Diversification:
   1. The uncertainty in global trade dynamics encourages India to strengthen domestic manufacturing (Make in India) and join resilient supply-chain initiatives with trusted partners like Japan and Australia.
3. Boost for Act East and Indo-Pacific Strategy:
   1. Strengthened regional diplomacy through APEC and Indo-Pacific Economic Framework (IPEF) helps India promote open, rules-based trade and counterbalance China’s economic influence.
4. Advancing Digital and Green Economy Interests:
   1. As APEC focuses on digital connectivity and sustainable growth, India can leverage its IT capabilities and renewable energy progress to position itself as a leader in these domains.
5. Need for Economic Reforms and Competitiveness:
   1. To benefit from evolving trade routes and new value chains, India must improve logistics, ease of doing business, and regulatory predictability to attract greater investment and participation in regional integration.

Conclusion

The Gyeongju APEC summit revealed a contrast in diplomatic approaches: bilateral pragmatism exemplified by the U.S.–China mini-deals, and multilateral leadership articulated by China. While the bilateral meeting provided short-term market relief, lasting regional stability requires strengthened multilateral institutions, resilient supply chains, and cooperative frameworks for technology governance. Middle powers must seize the policy space to build durable, inclusive solutions.