As the Asia Pacific Economic Cooperation (APEC) summit begins in San Francisco, all eyes will be on the meeting between Presidents Xi Jinping and Joe Biden as China and the United States try to stabilise relations damaged by trade and security concerns.
The leaders of the two world powers will meet on Wednesday for a more than four-hour meeting on the sidelines of the summit and will have dinner with Silicon Valley chief executives.
Rising tensions between the two countries – including on tariffs, semiconductor chips, surveillance and China’s increasing militarisation in the South China Sea – have meant that US companies have looked to expand or move their China-based businesses to Mexico, Southeast Asia, India and even back in the United States over the past few years.
Biden and Xi have not met since the G20 summit in Bali in November 2022. The APEC summit provides an opportunity for them to meet “and neither side have to worry about the optics of overly accommodating the other in the initiation of the meeting and the meeting venue,” said Chong Ja Ian, associate professor at the Department of Political Science at the National University of Singapore.
China and the US have worked to find agreement in two areas, drugs and climate change. Media reports said that at the summit, China is expected to announce a crackdown on fentanyl sales to the US and both countries plan to increase renewable energy.
The goal on the US side will be to “keep temperatures in the Asia-Pacific as low as possible”, said Rana Mitter, ST Lee professor of US-China relations at the Harvard Kennedy School. With wars in Ukraine and Gaza, the United States “has no desire for a third war front”, Mitter said.
For China, which is hoping to stimulate a sluggish economy, the goal is to “relieve technology restrictions”, Mitter said.
This month, China reported outflows of foreign direct investment exceeded inflows for the July-September quarter, a first since 1998. This reversal comes on the back of US restrictions on the Chinese semiconductor industry as Washington is concerned its chips could be used for military purposes. Chip companies have shifted those investments to the US, India, Malaysia and Singapore, Nikkei Asia reported.
Other companies such as Apple have looked to expand in India. Mexico has received investments in manufacturing and Vietnam and Cambodia in cellphone and textile manufacturing.
“It will be hard to find a comfortable resting place between the two right now,” Mitter said.
‘Pitch to attract investment’
Tibetan students protested Chinese President Xi Jinping’s leadership in San Francisco ahead of the PEC summit [File: Laure Andrillon/AFP]
Silicon Valley CEOs have been major investors in China. Apple partner Foxconn makes most of its cellphones in southern China, and Tesla became the first foreign company to have a wholly owned business in China to make cars.
However, the Chinese government’s crackdown on its own tech CEOs and foreign executives has led to concerns among US companies.
“When foreign executives see other executives being called up by the government, they are concerned. For business, it is all about transparency,” said Sean Randolph, senior director at the Economic Institute of the Bay Area Council, a San Francisco based think tank.
With the Chinese economy slowing, Xi will look to allay such concerns at his dinner with Silicon Valley executives and attract new investments. While his meeting with Biden is likely to remain largely behind closed doors, he is expected to make a speech at the business dinner.
“Xi will make a pitch to attract investment in the PRC [People’s Republic of China],” Chong said. “But CEOs may be less interested in pitches and more interested in whether their employees get detained, their offices get raided and books get additional scrutiny, they have to surrender proprietary information, there is adequate intellectual property protection and they can move their capital out of the PRC when necessary.”
In the past, as the Chinese economy quickly grew, the San Francisco Bay Area was a recipient of Chinese investment in real estate and tech startups, Randolph said.
Those investments have fallen since 2017, the year Xi last visited the US, as the Chinese government imposed capital controls and more recently the US government launched several investigations into Chinese investments in the country.
“Our investments in China are now flat and venture capital investment is down,” Randolph said.
Demonstrators in San Francisco protested APEC summit on range of issues [File: Jason Henry/AFP]
Xi did not leave China during the COVID-19 pandemic for more than two years and has travelled sparingly since then, including skipping this year’s G20 summit in New Delhi. For his trip, both China and the US prepared extensively for the Xi-Biden meeting even though the visit seemed uncertain until recently.
Cleaning up San Francisco
The summit will be a showcase for the city of San Francisco, often a subject of media coverage for its growing homeless population and drug abuse. City authorities have conducted sweeps of unhoused people for weeks ahead of the summit. UN Plaza, home to many homeless people and substance users, has been cleaned up ahead of the summit.
In the past few days, bands played there, and there were a dance competition and laser light show.
“We hope to continue this in the months to come,” said Fernando Pujals of the Mid-Market Business Association, which helped organize the events.
Close by, on Market Street, there was an archival photo installation that celebrated the area’s history, including the earliest Pride parades to women’s rights marches.
This tradition of protests carried on for the APEC summit despite the tight security for the event.
Nik Evasco joined thousands of protesters on Sunday protesting a range of issues that will come up at the summit, including the presence of oil company CEOs at talks on climate change; the attendance of Philippine President Ferdinand Marcos Jr, whom the demonstrators accused of human rights abuses; and Israel’s bombing of Gaza. Among them were also Free Tibet protesters, whose demonstrations could dampen Xi’s visit.
Evasco said protesters planned to “shut down” the summit on Wednesday.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
