'Xi captures the limelight'

From October 6 to 12, US President Barack Obama was scheduled to attend the APEC, ASEAN and EAS summits in Indonesia and Brunei and then travel to Malaysia and the Philippines as part of "his ongoing commitment to increase US political, economic and security engagement with the Asia-Pacific," according to the White House.

But the president's week-long four-nation tour of Southeast Asia was ultimately scrapped due to a partial US government shutdown, brought about by the failure of Congress to agree on the budget for the financial year 2013-2014. Instead, the White House announced that Secretary of State John Kerry would be taking his place. In a DW interview, the chief Asia economist of the analytics firm IHS, Rajiv Biswas, says that despite Washington's declared commitment to focus its foreign policy on Asia, the economic reality on the ground is that the region has already pivoted towards Beijing.

DW: What has been the impact of Obama's Asia trip cancelation?

Rajiv Biswas: President Obama has canceled three major trips to Asia. While political leaders in Asia understand the tremendous domestic political pressures that he confronts, the repeated cancelations of Asia tours at the last minute inevitably send a signal that the region is not at the top of the political priorities for the US.

The cancelation has also highlighted the economic ascendancy of China in the Asia-Pacific. Chinese President Xi Jinping's (main picture) visits to both Indonesia and Malaysia last week captured the full political limelight both in ASEAN and across Asia. Xi's visits were successful in strengthening China's bilateral ties with the two nations, both of which are key members of ASEAN.

He also "walked the talk" during his visit to Southeast Asia, signing very large-scale bilateral commercial deals and sending a clear signal to the rest of Asia about Beijing's commitment to building economic ties with other Asian nations. At the APEC Leaders Summit, Xi effectively positioned China as the rising economic and political leader in the Asia-Pacific.

Do you think the current US government shutdown may have an impact on US foreign policy in Asia?

It is unlikely that the shutdown can continue for a protracted period of time, as it would create increasing pressure and outrage from the US electorate against Congress, forcing them to find a solution to restart government. However, in an extreme downside scenario where the shutdown is protracted due to a continuing game of brinksmanship, then it will impede the conduct of US foreign policy in Asia in areas such as important trade negotiations.

However, a far greater and more imminent crisis is looming due to the threat of a US government debt default by late October 2013, which would have widespread transmission effects to global financial markets unless Congress quickly agrees on a deal to increase the US government debt ceiling.

How important has China become for economies in the Asia-Pacific region?

The economic reality on the ground is that Asia has pivoted towards Beijing due to the rapid economic ascent of China in the last decade. The country is now the largest export market for an increasing number of Asia-Pacific economies, including South Korea and Australia. China-ASEAN bilateral trade has increased at a phenomenal pace since 2002, growing at an average annual rate of 22 percent per year from just USD 55 billion in 2002 to USD 400 billion in 2012.

China's economy is expected to continue to expand. IHS forecasts that the country will become the world's largest economy by 2022, with its gross domestic product (GDP) growing at an average annual pace of around 7 to 8 per cent per year until then.

What role is the US likely to play in the Asia-Pacific in the future?

From a strategic security perspective, Washington will continue to play an important role as many Asian nations continue to rely on the US military as a key bulwark against varying security challenges they face. For some nations, such as Japan and the Philippines, territorial disputes with China have resulted in strengthening of bilateral security ties with the US. Therefore most Asia-Pacific nations will continue to walk a delicate political tightrope between the world's current military superpower, the US, and the world's rising economic and military superpower, China, for the foreseeable future.

How can the US contribute to solving the territorial disputes between China and some Southeast Asian countries?

China's long-standing position has been to deal with its territorial disputes in the South China Sea through bilateral negotiations and without the involvement of third parties. Although ASEAN and China have discussed the possibility of negotiating a binding code of conduct for resolving territorial disputes, so far Beijing has preferred to negotiate on a one-on-one basis and ASEAN members have also been divided about the need for such a code of conduct.

Meanwhile, the Philippines has filed an arbitration case with the UN International Tribunal of the Law of the Sea to adjudicate regarding the competing territorial claims of China and the Philippines in the South China Sea.

Rajiv Biswas is senior director and chief Asia economist at IHS, a global information and analytics firm. He is responsible for coordination of economic analyses and forecasts for the Asia-Pacific region.

The interview was conducted by Gabriel Domínguez.