China's interest is guarding its subs

The tug-of-war over the South China Sea is seen mainly as a struggle among rival claimants - China, Taiwan and several South-East Asian states - for control of valuable fisheries as well as sea bed oil, natural gas and mineral resources.

China's claim to about 80 per cent of the 3.5 million square kilometre sea and its hundreds of atolls, rocks and reefs, has also alarmed outside seafaring and trading nations, including the United States, Australia and Japan.

They regard the South China Sea as an international maritime highway with free navigation for seaborne trade, unimpeded movement of naval vessels, and unfettered over-flight for military aircraft.

But recent developments in China's nuclear weapons program suggest there is another important dimension to China's increasing assertiveness in enforcing its claimed jurisdiction in the semi-enclosed sea: protecting a new generation of nuclear-powered submarines armed with atomic warheads and based at Sanya on China's Hainan Island.

Okazaki Institute in Tokyo special research fellow Tetsuo Kotani says, ''Without understanding the nuclear dimension of the South China Sea disputes, China's maritime expansion makes little sense.''

One of the new generation subs was first spotted by a commercial satellite at Sanya in 2008. It was tied up to a pier that analysts said was China's first and so far only demagnetising facility for submarines. Demagnetisation is conducted before deployment to remove residual magnetic fields in the metal of a sub to make it harder to detect by hostile submarines, surface ships and anti-submarine aircraft.

Initially, these new generation Chinese subs and the nuclear-tipped ballistic missiles they could launch while submerged would be able to target potential adversaries in the Asia-Pacific and US bases in the region.

Eventually, with longer-range intercontinental missiles, they could cover the whole of the US from launch points in the deep waters of the South China Sea without having to venture too far from their rock shelter tunnels bored into a mountain that forms part of the Sanya naval base for China's South Sea Fleet. This would give China a more effective deterrent against nuclear attack, one that operated from under the sea in addition to land-based nuclear missiles.

In recent years, China has built up a relatively small but increasingly impressive arsenal of approximately 140 nuclear ballistic missiles either concealed in silos or mounted on special launch vehicles and moved around to different hiding places on land.

Each carries a single nuclear warhead. But earlier this month, a newspaper controlled by the ruling Chinese Communist Party reported that China was developing the capability to do what Russia and the US have the technology to do - put multiple warheads on its intercontinental ballistic missiles, each capable of hitting different targets. This could greatly increase the number of China's operational nuclear weapons and overwhelm any missile defence system.

At the same time, China is building a fleet of new JIN-class nuclear-powered ballistic missile submarines (SSBNs), known as Type-094. Two are in operation, a third is under construction and may already have been launched, and at least two more are expected to be built.

Meanwhile, China is hoping to complete testing of the JL-2 nuclear-tipped missile for the Type-094 sub, which can carry 12 of the missiles. The US Defence Department's annual report to Congress in May on China's armed forces and military strategy noted that the while the JL-2 program had faced repeated delays, it ''may reach initial operating capability'' within the next two years, giving the Chinese Navy ''its first credible sea-based nuclear'' deterrent.

In addition to adding a nuclear dimension to China's interests in the South China Sea, having a sea-based nuclear deterrent may pose serious control problems for the Central Military Commission which supervises the country's nuclear arsenal. The commission and the Chinese Navy have no experience in operating SSBNs in either peacetime or during a crisis. Yet remaining submerged and out of communication for lengthy periods is essential if SSBNs are to remain undetected.

So for the foreseeable future, China's land-based nuclear missile force is expected to be the mainstay of the country's deterrent and retaliatory strike capability against the continental US or other faraway targets.

But that will be cold comfort for any regional adversary of China that might soon be targeted by a new SSBN fleet armed with nuclear ballistic missiles.


Michael Richardson

APEC Focuses on Food Security

Leaders representing 21 Asia-Pacific economies, meeting in the eastern Russian port city of Vladivostok, are focussing on food security on the second day of their conference. Discussions Saturday looked at ways to enhance global growth by tearing down barriers to trade.

Russian President Vladimir Putin called food security one of the most acute problems today as he opened the final day of talks at the Asia-Pacific Economic Cooperation summit, where bilateral meetings on the sidelines are nearly as important as group events.

On Sunday U.S. Secretary of State Hillary Clinton spoke with Malaysia's Prime Minister Najib Razak on the situation in Burma – particularly the unrest in Rakhine state, and territorial issues concerning a number of areas in the South China Sea.

She also met South Korean President Lee Myung-bak to review efforts to get North Korea's new leader to address nuclear concerns, and the need to calm tensions in the East China Sea.

The East China Sea also figured largely in Secretary Clinton's talks with Taiwan representative Lien Chan. The two also discussed the reopening of Taiwan's market to U.S. beef, and other economic and trade issues.

Mr. Putin is using the summit to promote Russia's ambitions to enhance its transport infrastructure across the two continents it straddles, bolstering exports to east Asia as demand in Europe wanes.

Chinese President Hu Jintao announced Saturday that his country also plans to boost its infrastructure, spending more than $150 billion on roads, railroads, and energy projects. He said enhancing his country's transport networks will enable China to import an extra $10 trillion worth of foreign goods in the next three years. Mr. Hu said strengthening infrastructure development is key to achieving economic growth.

On the sidelines, officials from Japan and Gazprom, Russia's gas giant, signed a preliminary agreement on construction near Vladivostok of a $13 billion natural gas plant and shipping port.

South Korea's Yonhap news agency says South Korean President Lee Myung-bak met with China's President Hu to express sympathy for a pair of earthquakes that hit southwest China Friday.

And U.S. Secretary of State Clinton and Russian Foreign Minister Sergei Lavrov signed a pact to enhance U.S. – Russia scientific cooperation in the Antarctic.

While in Russia, Clinton is also expected to meet with Mr. Putin to discuss how to stop the bloodshed in Syria, where government forces are fighting an 18-month battle against rebels.

The 21-member APEC forum accounts for 40 percent of the world's population, 54 percent of economic output and 44 percent of trade.

VOA

Pacific Rim leaders seek to fortify food security

VLADIVOSTOK, Russia (AP) — Asia-Pacific leaders focused their attention on rising concern over food security on Sunday, as they prepared to wrap up their annual summit with an agreement to slash tariffs on trade in environmental goods and a call to keep markets open even in hard times.

Food security "is one of the most acute problems of our time," Russian President Vladimir Putin said in convening Sunday's second and final "informal retreat" of the Asia-Pacific Economic Forum in this far eastern Russian seaport.

"Without ensuring food security, we cannot achieve our goal of enhancing the quality of life for our people," he said before the closed door session got under way.

The explicit focus on food security by the leaders of the 21-member APEC reflects abiding concern over the potential for food prices to surge to politically volatile levels.

Current prices are high, though they remained flat in August and are below the levels that triggered rioting and unrest in parts of the developing world in 2007-2008. Another food crisis, in 2010-2011, also caused hardships for poorer consumers, especially in countries heavily dependent on food imports.

Russia's decision to ban grain exports two years ago due to shortfalls caused by drought and fires was seen as contributing to a surge in global food prices, though Putin has said there will be no export curbs this year.

Revitalizing growth through more open trade is an urgent priority for the APEC forum, whose aim is to dismantle barriers and bottlenecks that interfere with business, while nurturing closer economic ties.

In acting as host for Russia's first APEC summit, Putin has underscored his government's commitment to opening markets further, especially as a new member of the rules-setting World Trade Organization.

Asia remains the brightest spot in the global economy but is facing challenges, and trade is the solution, Putin told fellow leaders as they began their annual "informal retreat."

"The recovery of the global economy is faltering. We can only overcome negative trends by enhancing the volume of trade ... enhancing the flow of capital. It is important to follow the fundamental principles of open markets and free trade," Putin said.

"The priority goal is to fight protectionism in all its forms," Putin said. "It is important to build bridges not walls."

Secretary of State Hillary Rodham Clinton, who is representing the U.S. at the summit in President Barack Obama's absence, welcomed Russia's membership in the WTO, saying that America's exports to Russia could double or even triple as the country implements its commitments to open its markets further, while Russia itself could raise its GDP by about 11 percent in the long run, according to World Bank estimates.

Russia's hosting of the APEC summit highlights a renewed focus on developing its neglected but resource-rich Far East, where it plans to develop modern railroads, seaports and airports to help build a bridge between Asia and Europe.

"The main task of our forum is to facilitate freer trade. This task is being fulfilled," Igor Shuvalov, Russian first deputy prime minister responsible for economic issues, told The Associated Press.

At APEC, Russia has discussed with its trading partners projects in forestry and initiatives to open its natural resources sector wider to foreign investment, he said.

Earlier, Putin promised regional business leaders that they can count on Russia, which has long focused mainly on supplying oil and gas to Europe, to be a reliable energy supplier.

On Saturday, Gazprom signed an agreement with a Japanese consortium to move ahead on a 10 million ton liquefied natural gas plant in Vladivostok that could double the Russian gas supplier's capacity and significantly raise its exports to the energy-hungry Asia-Pacific region.

"The production and the construction of a plant for the production of liquefied natural gas furthers the goal of international energy security. It is very important for the development of Russia's far east," Shuvalov said.

APEC can play a role, business leaders attending the conference said, in forging regional networks, especially in energy and transport, though lingering territorial disputes and other legacies of the Cold War era are keeping the region from its full potential: North Korea, in particular, remains relatively isolated from the rest of Asia, its own infrastructure in shambles.

Given APEC's lack of negotiating power, its annual summit is not known for major policy breakthroughs, though its activities affect trade and business accounting for about half of world economic activity. But leaders were expected to end their meetings Sunday by endorsing a plan to cut tariffs on environmental-related goods — such as waste-water treatment technologies — to 5 percent by 2015.

Bloomberg

Tensions mar APEC meeting

Tension over territorial disputes and rising protectionism have cast a rather gloomy shadow over the gathering of leaders of 21 Asia-Pacific Economic Cooperation (APEC) members. These nations account for 54 percent of world economic output and 44 percent of trade.

China is throwing its weight around in the South China Sea dispute, provoking invective from Vietnam and the Philippines, and continues sabre-rattling at Japan for its plans to buy disputed islands in the East China Sea, near oil and gas reserves.

Japan is embroiled in further disputes with South Korea over more rocky islets, and with APEC host Russia over the Southern Kuriles — an archipelago seized from Japan by the former Soviet Union at the end of World War II.

Despite the tension, APEC leaders will flock to the annual summit on Saturday and Sunday on Russky Island, off Vladivostok, Russia’s most eastern city near South Korea, Japan and China.

Russian Federation Foreign Minister Sergey Lavrov believes these tensions will not hinder the already strong economic cooperation between APEC members.

“APEC is built on solid foundations,” said Lavrov on Thursday.

“Considerable progress has been made by member economies in advancing their 2012 agendas.”

Lavrov’s optimism seems to have some relevance in the real world.

Chinese President Hu Jintao, Japanese Prime Minister Yoshihiko Noda and South Korean President Lee Myung-bak arrived on Thursday and Friday.

It remains unclear, however, whether there will be any opportunity for the leaders to meet.

US President Barack Obama has skipped the summit as he prepares for the upcoming presidential election. Secretary of State Hillary Clinton is representing the US.

President Susilo Bambang Yu-dhoyono, with his entourage of more than 200, arrived on Friday afternoon with scores of agendas in hands, including plans for bilateral meetings with China, Russia, Mexico, Peru and Chile. He is also due to talk at the prestigious APEC CEO Summit, and meet with a dozen noted Russian businessmen.

Indonesia’s participation this year, however, has been marred by growing allegations of protectionism from fellow APEC members, particularly over the country’s recent policies to ascend the value chain.

“There have been some discussions over protectionism issues, and the need to address them,” said Trade Ministry’s director general of international trade cooperation Iman Pambagyo.

“According to a presentation by the World Trade Organization, the trend of protectionism has increased over the years,” he said.

Indonesia has fallen victim to protectionism measures by several APEC members. The US, for example, has been putting environmental barriers against Indonesia’s crude palm oil (CPO).

“Our CPO market is worth around US$8 billion in the US, annually. We have proposed that the US lift the environmental concerns over our CPO so that other developed nations will follow suit,” said Trade Minister Gita Wirjawan.

Several developed APEC members, particularly Japan, have recently criticized Indonesia’s stance on capping raw mining exports, alleging such measure to be protectionist.

Indonesia claims its policy is actually aimed at encouraging local and foreign companies to process commodities internally by setting up processing facilities and thereby creating jobs.

A joint statement released after the APEC ministerial meeting on Thursday emphasized the need to resolve the protectionism issue.

“We note with concern the International Monetary Fund’s downward projection for global economic growth for this and next year and the rise in protectionist instances around the world. These developments increase the urgency for further action to keep markets open.”

APEC, set up in 1989 in response to growing interdependence of Asia-Pacific economies, brings together economies surrounding the Pacific Ocean — from China, Southeast Asia, Australia to Chile via the US. Its core mission is to reduce tariffs and other trade barriers among members.

Jakarta Post

Putin: Asia can count on Russia for energy supply

VLADIVOSTOK, Russia - President Vladimir Putin promised Asia and Pacific leaders meeting in the seaport of Vladivostok on Friday that they could count on Russia to be a reliable energy supplier and provide a bridge to Europe that can help revitalize regional trade.

Russian President Vladimir Putin speaks during a plenary session at the APEC summit in Vladivostok, Russia, Friday, Sept. 7, 2012. (AP Photo/Mikhail Metzel)

Russia is boosting its exports of oil and gas to Asia after years of focusing almost entirely on supplying Europe. Moscow also has ambitious plans to develop its railroads, roads, seaports and airports in the east of the country with the aim of providing a reliable transportation link between Asia and Europe.

"The first and main thing we're going to do is develop transport infrastructure," Putin told regional business leaders.

He played up Russia's common economic space with neighbors Kazakhstan and Belarus as opening "a direct route to Europe for business in the Pacific region."

Faltering vital signs in China and elsewhere make pushing ahead with more and freer trade an urgent priority for the 21-member Asia-Pacific Economic Cooperation forum, whose leaders are gathered in the Russian Far East port of Vladivostok for their annual summit.

APEC aims to foster growth by dismantling barriers and bottlenecks that slow trade and business, while nurturing closer economic ties.

Given its status as an organization governed by consensus, APEC is not known for major policy breakthroughs. Election-year politics and territorial spats make this year particularly challenging.

From the Kuril islands to the northeast of Vladivostok all the way to the Spratlys in the South China Sea, various neighbors are squabbling over territories at a time when they most need to be focused on promoting growth.

South Korea is feuding with Japan, Japan with China and Russia, China with many of its Southeast Asian neighbors. With elections due soon in South Korea and Japan, and a once-in-a-decade change in the Communist Party leadership pending in China, lame-duck leaders facing nationalist pressures at home have little room for amicably resolving the disputes.

"It's bad luck that it happens just before all these transitions. Everybody is looking around and saying, `these people won't be at the table in three months,'" said William Overholt, an Asia expert at Harvard University's Kennedy School of Government.

The sharp decline in growth in trade this year - from 12 percent in December to 4.6 percent in May - underscores the importance of pushing ahead with trade initiatives, the APEC Policy Support Unit, an independent data analysis and research unit, said in a report issued Friday.

As hosts, Russian leaders are showcasing their country's recent entry into the rules-setting World Trade Organization - a key step in traditionally Europe-centric Moscow's effort to build trade and investment ties with its neighbors in the Far East.

"What I'd expect from the meeting is Russia trying to show itself to be a global power, and certainly my view and that of many others is that is not true anymore," said Xenia Dormandy, an expert at the London-based think-tank Chatham House.

President Barack Obama's decision to skip this year's gathering - Secretary of State Hillary Clinton is attending in his place - allows Russia greater leeway to shape its agenda, said Peter Drysdale, a professor emeritus at Australia National University who helped set up APEC in 1989.

"After a long time sitting on the sidelines, the Russians have thrown considerable diplomatic firepower into working up a strong APEC agenda," Drysdale said in a commentary on the website East Asia Forum.

Since last year's summit in Honolulu, Canada and Mexico have gotten the go-ahead to join nine other nations involved in talks on forming a U.S.-backed free trade bloc known as the "Trans-Pacific Partnership." But participants have yet to reach their goal of setting a legal framework this year for the initiative, and Japan, its leaders preoccupied with tax reforms and domestic politics, has so far been unable to join the negotiations.

Such difficulties are inevitable given the high standards set out for the arrangement, said New Zealand's prime minister, John Key.

"All governments involved will have to take some tough decisions if we are to get there. But I am convinced that the high quality TPP is not only achievable but critical for growth in the region," Key told a conference on the sidelines of the APEC summit.

China, which some economists say is on course to overtake the U.S. as the world's biggest economy this decade, appears wary of backing a U.S.-led initiative, and it has commitments to rival free trade blocs in East and Southeast Asia.

TPP talks resumed Thursday near Washington, and officials attending APEC were discussing it in their own meetings. But without China or Japan, the world's No. 3 economy, the initiative would have little traction.

Meeting the rigorous standards for open and free trade, and for protection of trademarks and patents, for example, also would be arduous for former centrally-planned economies such as China and Russia.

But Andrei Belousov, Russia's economy minister, said his country was keen to join.

Meanwhile, keen to leaven its European-dominated trade and balance its growing reliance on dealing with China, Russia is also pursuing a customs union that is meant to evolve into a "Eurasian Economic Union" that would stretch from the Atlantic to the Pacific Ocean.

With Europe still mired in its debt crisis, Asia remains the biggest driver of global growth, despite a decline in powerhouse China's economic growth to a three-year low of 7.6 percent in the second quarter - and signs Japan's own export-led recovery is sputtering.

In its latest forecast, the Manila-based Asian Development Bank predicted the region's economies will expand by 6.6 percent this year.

"Russia is looking to Asia. It's not growing as fast as it was two years ago but it's still the bright spot in the global economy," said Tony Nash, managing director at IHS Global Insight in Singapore. "It's still where the action is."

ELAINE KURTENBACH

Clinton Plays Up 'Frank' Talks With Beijing

U.S. Secretary of State Hillary Clinton put a positive spin on meetings with Chinese leaders earlier this week that yielded little visible progress on diplomatic disputes, saying the relationship between the two superpowers is mature enough to withstand differences.

Secretary of State Hillary Clinton with the sultan of Brunei on Thursday.

Nearing the final leg of her 11-day Asia-Pacific tour with Thursday stops in East Timor and Brunei, Mrs. Clinton also sought to dial back speculation that she was visiting the smaller nations in an effort to counter Chinese influence in the region.

"We are not here against any other country," she said. "We happen to believe that Asia and the Pacific are quite big enough for many countries to participate in the activities of the region."

Her stops, which included a tour of a coffee plantation in Connecticut-sized East Timor, followed her visit to Beijing, where she and Chinese leaders appeared far apart on key issues such as how to end Syria's civil war and resolve territorial disputes in the resource-rich South China Sea. Chinese Foreign Minister Yang Jiechi dismissed the idea that there was a serious problem in the South China Sea, saying the historical record supported its claims there, and said solutions to the Syrian crisis shouldn't be imposed by outside countries.

Mrs. Clinton was also greeted skeptically by Chinese state media, which questioned whether U.S. officials were trying to drive a wedge between Beijing and other countries across the region.

"As was evident yesterday, there is a huge amount going on where the United States and China need to consult," Mrs. Clinton said, also mentioning issues including Iran, North Korea and the global economic recovery. "Even when we disagree, believe me, we can talk very frankly now. We can explore the toughest issues without imperiling the whole relationship," she said.

"The United States, certainly I, am not going to shy away from standing up for our strategic interests, and in expressing clearly where we differ," she added.Mr. Yang called the talks "constructive and fruitful," state media said.

Analysts widely believe Mrs. Clinton's trip is partly intended to rally leaders in other Asian nations to forge a common position on issues such as how to settle disputes in the South China Sea, which is claimed in whole by China and in part by Vietnam, the Philippines, Malaysia and others. The U.S. says it doesn't take sides in territorial disputes, but says it has an interest in maintaining freedom of navigation in the sea, which is home to some of the world's most critical shipping lanes.

Mrs. Clinton's trip comes two months ahead of a major regional summit in Phnom Penh in November where U.S. leaders are expected to continue pressing for a code of conduct to govern conflicts in the sea. China has opposed efforts to settle disagreements at multilateral forums and says it prefers to handle them on a bilateral basis.

Her stop in Brunei, meanwhile, took her to a tiny petrostate of only about 400,000 people that nevertheless will carry more weight next year when it is slated to host a series of major meetings of the Association of Southeast Asian Nations, an increasingly important regional bloc which U.S. officials hope can serve as a check on growing Chinese diplomatic sway. Brunei also has claims in the South China Sea, as well as experience in hammering out joint-development agreements for oil and gas in contested waters, which could be applied to disputes in the sea.

A senior U.S. State Department official traveling with Mrs. Clinton from East Timor to Brunei acknowledged it was likely tensions would remain high for the foreseeable future. "I do think we have to be prepared for more tension on some of these matters," the official said. "I think this is the new normal."

But U.S. officials played down the strategic imperative of visiting East Timor, instead arguing Mrs. Clinton's stop there was intended mainly to recognize the country's significant progress since it gained independence from Indonesia a decade ago, capped with a democratic election this year. Even so, U.S. officials have supported the idea of admitting East Timor into the 10-member Asean bloc, which could enhance its strategic significance.

Mrs. Clinton heads next to Vladivostok, Russia, where she will attend an Asia-Pacific Economic Cooperation summit this weekend.

Patrick Barta

Vladivostok Shifts Into High Gear to Attract Asian Investors

VLADIVOSTOK, Russia - Leaders from 20 nations around the Pacific Basin are gathering for their annual meeting on economic cooperation, held this year in Russia, a nation not often seen as a Pacific power.

To prepare for meetings of the Asia-Pacific Economic Cooperation group, Russia says it spent $22 billion modernizing Vladivostok, its main Pacific port city. That is 50 percent more than Britain spent to prepare London for this summer’s Olympic Games.

Heads of government flying into Vladivostok are arriving at a new international airport built to handle 15 million tourists - 10 times last year’s passenger load.

Major upgrades erected
They will zoom down brand new highways and bridges, including the world’s longest cable-supported bridge. Its one-kilometer-long central span is strung between two towers that are each taller than the Eiffel Tower.

That $1-billion bridge leads to Russian Island, the southernmost part of Vladivostok, and site of a brand new, American-style university campus. The national leaders are holding economic talks there on Saturday and Sunday; next month, when university classes resume, it will be home to 25,000 students.

Professor Artyom Lukin, director of international research at the Far Eastern Federal University, sees the summit as a coming-out party confirming Russia's status as a modern Pacific power.

“Russia wants to be a great Asia Pacific power - not just a great Eurasian power, but a great Asian Pacific power as well,” he said. “If you want to be a great power in the Pacific, you need a developed Pacific coast... the Russian Far East.”

Converting from door to gateway
Vladivostok means “to rule the east.” From czarist times to Soviet times, it served as a fortress city, beating back invasions launched from other parts of Asia. From Russian Island, surrounded by the Sea of Japan, six forts and 27 coastal batteries stood guard defiantly.

Now that it hosts the APEC conference, Russia’s biggest outreach to Asia in memory, Vladivostok's role is not to repel those arriving from abroad, but to welcome them as trading partners.

Russian authorities say they aim to double their Asia-Pacific trade, increasing it to half of the country's overall trade turnover.

Economic Development Minister Andrei Belousov told VOA the Kremlin’s commitment is clear. Only two years ago the summit site was a completely empty field; since then workers have erected buildings with one million square meters of usable commercial space.

Overnight transformation
Vladivostok’s upgrade is so abrupt that a cruise ship had to be brought in to house 500 summit participants.

Workers are still building two Hyatt hotels, the first international chain hotels serving the city of 600,000 people.

Aliya Turumbekova, Hyatt's marketing director, said the hotel group has long-range aims. “In the current time, since the Soviet system collapsed and the world opened for development, for trade, and for economic ties, we see Vladivostok as a good bridge between Europe and the bigger Asia."

Also under construction is a new opera and ballet theater. There are new gas pipelines and a new city sewage treatment plant. Within a year, work is to start on an oil refinery, a liquefied natural gas plant, and a massive gambling zone for Asian tourists. The goal is to make Vladivostok attractive for young people.

Retaining best, brightest
Lukin said one-third of his students usually leave the Russian Far East to seek jobs elsewhere.

“They leave for Moscow, St. Petersburg, Europe, the United States,” he said. “And most of them are the smartest students, unfortunately. So we are losing talent, it is kind of brain drain for the Russian Far East.”

But some of Vladivostok’s young people are embracing Russia’s turnaround on Asia. Anastasia Melnikova, just graduated from university, is looking for work at home, in Vladivostok.

“If you want to go to Moscow, you have to fly nine hours,” says Melnikova, 22, a publishing major. “If you want to go to Japan, you just have to fly just two hours. We are partners, and we will be partners for a long, long time.”

Vladimir Tananikin, a student of English and Spanish, sees China, whose border is only 60 kilometers away, as a plus.

“For me and people here, it is no problem that China is growing, and maybe we will help each other to grow together,” he said.

Now, Russia’s goal is to attract Asian investment. At a news conference for foreign reporters, the region’s new governor, Vladimir Miklushevsky, gave his sales pitch to a group of largely Chinese journalists. He said the Vladivostok region is now open for business, offering transparent and unchanging investment rules and a clampdown on corruption.

From historically repelling Asian invaders, this one-time fortress city now takes on a new role: attracting Asian investors.

VOA

Russia bets billions on turn toward Asia

VLADIVOSTOK, RUSSIA -- Once a mysterious closed city during Soviet times, Vladivostok is ready to strut in the world spotlight as host of the Asia-Pacific Economic Cooperation summit.

Russia has splashed out $20 billion preparing for the summit in Vladivostok, its largest but long-neglected Pacific port, as part of a grand plan to become a bigger player in Asian markets. The spending included building the city's first sewage treatment system.

But most of what was built seems intended to impress the heads of state and business executives visiting for this week's meetings. After arriving at a new international airport, they will be whisked into the city on a new highway and then across the world's longest cable-stayed bridge to Russky Island, where a U.S.-style university campus has risen from the rocks. Some of the buildings still reek of fresh paint.

Here they will be welcomed Friday by President Vladimir Putin, who has set out to turn Russia east and tap into the growing Asian economies.

Russia has been largely oriented toward Europe, doing fully half of its foreign trade with the European Union. But a crisis among the 17 countries that use the euro is cutting demand for Russian energy supplies and undermining global growth.

Less than a quarter of Russia's trade is with APEC, whose 21 members include China, Japan and other Asian economies in addition to the United States.

"We will have a future of accelerated growth when we have two strong legs: not just one in Europe, but one in Europe and the other in Asia," said Igor Shuvalov, the first deputy prime minister responsible for economic issues.

Russia has the oil and natural gas that Asia needs to fuel its economic expansion. Until recently, though, all of its export pipelines flowed west to Europe.

Russia wants to be more than a supplier of natural resources to Asia, however, and is eager to attract the investment it needs to diversify and modernize its economy.

The first pipeline to send oil east to China began operation in early 2011. An extension of the pipeline to a port near Vladivostok is scheduled for completion by the end of this year, and Russia wants to build plants there to produce petro-chemicals and fertilizers, adding value to its exports.

The eastern regions of the country also have rich deposits of coal and metals, vast forests and plenty of undeveloped land where grain could be grown to meet rising demand in China.

High on Russia's agenda during the APEC meetings is an ambitious plan to turn Vladivostok into a transportation hub to link Asia to Europe by sea and rail. The main line of the Trans-Siberian Railroad runs between Vladivostok and Moscow, nearly 6,500 kilometers (4,000 miles) to the west.

"Building a reliable transport and logistics hub across Asia to Europe is clearly in Russia's interests, but also is something that APEC leaders want to look at as well," said Myron Brilliant, the senior vice president of international affairs at the U.S. Chamber of Commerce.

He cautioned that although Russia has made progress during the past year, it still lags far behind China and Singapore.

"You recognize that if Russia really wants to be a transportation hub, it's got to pick up its game," Brilliant said. "It's got to invest in the infrastructure."

The Trans-Siberian Railroad needs a major track upgrade before it can handle more traffic, and some of the ships in Vladivostok's ports appear to be losing their battle with rust.

Vladivostok gained 150 kilometers (90 miles) of new roads ahead of the summit, including the four-lane highway from the airport into the city. But the 40-minute ride highlights the blight of a long economic malaise.

Hyundai is building a plant near the airport to produce electrical equipment, but otherwise the road passes desolate villages and the rubble of a defunct collective farm.

In Vladivostok, the facades of gracious old buildings on the main avenues have been refurbished. Also as part of the summit preparations, the city of 600,000 has gotten its first sewage treatment system after years of discharging raw sewage into the sea.

The home of the once mighty Pacific Fleet, Vladivostok was a closed city until after the Soviet Union collapsed in 1991. Since then it has fallen into decline, and residents today complain of low wages and a lack of decent housing. Many have left for Moscow or other more prosperous Russian cities.

Some residents hold out hope that the summit will lead to new investment, but many are cynical.

"Nothing will come of all these big plans," said Irina Makhura, holding her toddler son while shopping at a market where Chinese and Vietnamese shop owners sell cheap goods. "They will forget about us as soon as the summit is over. This is all for you foreigners."

Viktor Ishayev, who was recently appointed to the new post of minister for Far East development, disagrees. Russia invested so heavily in the APEC summit, he said, "so that people, heads of state, will come here and see that they are able to do business here."

Lynn Berry

Eighty Percent of U.S. Asia Policy Is Just Showing Up

With China throwing its weight around the South China Sea, and snapping at Japan for its plans to buy disputed islands, the waters of the Pacific are looking a little choppy these days.

Time for a little high-level diplomacy, you might think -- something that not only eases tensions but also refocuses the nations of the Asia-Pacific on the enormous economic stakes they have in regional peace and stability.

If the administration of President Barack Obama is taking seriously this week’s meetings of the Asia-Pacific Economic Cooperation bloc, however, it has a funny way of showing it. Granted, President Obama has a good excuse for not attending the APEC leaders meeting in Vladivostok, Russia. But why did Treasury Secretary Timothy Geithner not attend the earlier meeting of his fellow finance ministers in Moscow?

More egregiously, why did U.S. Trade Representative Ron Kirk, the ostensible point person for the administration’s lofty goal of doubling U.S. exports by 2015, skip both the APEC meeting and the latest Trans-Pacific Partnership trade talks to attend the Democratic National Convention in his “personal capacity.” His choice fails the crucial Woody Allen test for effective job performance -- the one that says “80 percent of life is just showing up.”

Secretary of State Hillary Clinton has taken Obama’s place at the APEC leaders’ summit; Undersecretary of State Robert Hormats is filling in at APEC’s foreign ministers table; and Deputy U.S. Trade Representative Demetrios Marantis has filled in for Kirk, as Undersecretary of Treasury Lael Brainard did for her boss. So at least there are no empty U.S. chairs at what has been, for the past 30 years, the chief Asia-Pacific venue for economic talks. But as diplomatic signals go, this one doesn’t exactly affirm the administration’s so-called pivot to Asia.

Since its founding in 1989, APEC has done a remarkable job of promoting growth and integration among economies that account for nearly half the world’s trade. The average tariff rate among its members has dropped from 16 percent to 5 percent, in part because of the liberalization measures put forward in APEC’s voluntary Individual Action Plans. The 1994 Bogor Declaration for “free and open trade and investment in the Asia-Pacific” created the consensus and underpinnings for the Trans-Pacific Partnership, which was launched in 2005.

Yes, APEC meetings can be long on set pieces and short on concrete results and the forum has lost some prominence and clout to groupings such as the East Asia Summit. And yes, the incipient Trans-Pacific Partnership offers the prospect of binding commitments to spur trade, not consensus-driven, voluntary measures.

Yet APEC not only remains an invaluable incubator for ideas, it is also the one forum that brings together leaders from both sides of the Pacific. As former Australian Prime Minister Paul Keating, one of APEC’s founding fathers, has pointed out, such gatherings have been particularly useful in breaking the ice between Japan’s and China’s leaders. And just as at the United Nations General Assembly, side meetings have loosened numerous logjams, whether on U.S.-China trade or on getting Indonesia to agree to an international peacekeeping force in East Timor. Even the goofy photo-ops in over-the-top local garb -- a tradition begun by President Bill Clinton that President Obama nixed last year -- can help bridge gaps. That’s not to mention what APEC does at the working level to encourage informal contacts and habits of cooperation.

Perhaps because so many U.S. diplomats are lawyers, or perhaps because the habits of a hegemon are hard to break, U.S. diplomacy often takes on a cold, transactional cast. Still, schmoozing and shoulder-rubbing carry added importance at a time of increased regional tension. Even as Asia’s constellation of regional groupings grows, APEC’s talk shop remains central and deserves more attention from the U.S. than it seems to be getting. As Winston Churchill once said in another context, “To jaw-jaw is always better than to war-war.”

Bloomberg

APEC Leaders to Discuss Rival South China Sea Claims

BEIJING — Asia-Pacific leaders meeting in Russia this week are expected to discuss how best to reconcile border disputes in the South China Sea. Vietnam, Taiwan, Malaysia, Brunei, the Philippines and China all have competing territorial claims.

Chinese patrols in contested waters, and a new Chinese garrison on a disputed island put rival claims to the South China Sea front and center at this week's forum of the Asia-Pacific Economic Cooperation.

"There is a small risk, and I think it is a growing risk, that an incident at sea could escalate into conflict involving China and one of its neighbors, and I think that is what we are all worried about," said Rory Medcalf, who directs the International Security Program at Australia's Lowy Institute.

U.S. Secretary of State Hillary Clinton says Southeast Asian nations should draft a unified code of conduct with China to resolve competing claims to the sea.

"We believe the nations of the region should work collaboratively together to resolve disputes without coercion, without intimidation, without threats and certainly without the use of force," said Clinton.

Indonesian Foreign Minister Marty Natalegawa is taking the lead.

"I had a very good, frank and candid discussion with my foreign minister of China colleague here in this very same building to call him to revert back to the diplomatic process," said Natalegawa. "I think the track is quite clear what is ahead of us, namely, we must apply ourselves to have the code of conduct done."

But the Association of Southeast Asian Nations failed to agree on a code of conduct in July. Justin Logan of Washington's Cato Institute said this week's APEC summit may do no better.

"I think bringing in different countries will create a different dynamic.  Although, in all likelihood, many of the countries that were in involved in the first go-around will be very, very reticent to get back involved again seeing the sour outcome that happened in ASEAN," said Logan.

Resolving the standoff is complicated by Chinese wariness of the Obama administration's greater military and economic involvement in Asia.

"We have noticed the United States has said many times that it will not hold a position on the South China Sea issue," said Chinese Foreign Ministry Spokesman Hong Lei. "We hope they can keep their promises and do more things that are conducive to regional peace and stability, not the opposite."

Before APEC, Secretary Clinton tried to soothe tensions with China.

"We want to see them [China] play a positive role in navigation and maritime security issues," said Clinton. "We want to see them contribute to sustainable development for the people of the Pacific to protect the precious environment, including the oceans."

U.S. officials expect this APEC summit to endorse the need for a code of conduct over the South China Sea so that mechanisms for resolving rival claims might be in place before November's East Asia Summit in Cambodia.

VOA