Back from Asia, Obama weighs strategic partnerships, China's economic muscle

The power of China's economic muscle

Still, China’s economic muscle was hard to miss on Obama’s tour. The day before he arrived in Jakarta, a visiting trade delegation from Beijing announced that total Chinese investments agreed this year had reached $6.6 billion. Japan and South Korea are increasingly drawn into China’s economic orbit by dint of its size and continued expansion.

Driving this point home, a Korea-US Free Trade Agreement that was completed in the waning months of the Bush presidency went unsigned during Obama’s visit. US special trade representative Ron Kirk said that US objections over market access for automakers couldn’t be resolved in time, a setback that surprised many South Korean observers.

“It’s a big disappointment we didn’t get the FTA,” said Jang Ha-sung, dean of business at Korea University. “Korea has done much for its own share.”

An inconclusive summit of G20 leaders, who failed to agree terms on dealing with global imbalances, added to the mood of disappointment in Seoul. Lee Chang-choon, a former South Korean ambassador, said the meeting lacked substance and argued that Obama had lost influence since the midterm elections. “He is counting down to his last days,” he says.

Even the positive tone struck in Tokyo was tempered by Japan’s domestic politics. Obama deliberately avoided mention of Futenma, the US Marine base on the southern island of Okinawa whose relocation caused a rift between the two countries earlier this year. Voters on Okinawa will elect a new governor later this month.

The worst-case scenario for both governments would be a defeat for the incumbent governor, Hirokazu Nakaima. His opponent is opposed to the relocation of Futenma to another part of the island. This could scupper Japan’s agreement with the US, since “it won’t work without the cooperation of the local government,” says Mr. Nakano.

Sara Schonhardt in Jakarta, Indonesia; Ben Arnoldy in Mumbai, India; Donald Kirk in Seoul,South Korea; and Justin McCurry in Tokyo contributed to this report.

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