The leaders of the 21 APEC member economies at the close of APEC Summit 2025 on Saturday urged a far more equitable and resilient trade order. The Gyeongju Conference wrapped up with a joint declaration focused on coordination, mutual benefit, and green development amidst the increasing fragmentation in the worldwide economic environment.
The summit came against a tense geopolitical backdrop of US tariffs, Chinese export controls, and increased competition in the fields of artificial intelligence and technology supply chains.
A Shift in Trade Dynamics
Before that, a series of trade deals was announced by U.S. President Donald Trump with several countries, including South Korea and China, before he abruptly left the region. His early exit had left space for China to seize the diplomatic spotlight.
“It reflects undeniable recognition that a multilateral system of free trade via the WTO might no longer be possible,” said Heo Yoon, an international trade professor at Seoul’s Sogang University, via email. “A paradigm shift is happening in the global trade order.”
Notably, the APEC declaration this year also did not include voices about “multilateralism” and the “World Trade Organization,” a signal of a deeper fracture in the post-war trade framework customarily led by Washington.
Xi Jinping’s Diplomatic Offensive
With the president of the United States absent from the main sessions, Chinese President Xi Jinping seized the platform to project Beijing as a defender of open trade and technological cooperation. He called for the establishment of a World Artificial Intelligence Cooperation Organization, with China as an active shaper of global AI governance.
“China is clearly taking advantage of the U.S. retreat to present itself as a stable partner,” said Li Xing, a professor at Guangdong Institute for International Strategies. “Xi’s message is that China seeks common growth, not hegemony-particularly to reassure countries like South Korea caught between two giants.”
Xi announced further that China would host the next APEC Summit in Shenzhen in 2026-a sign that Beijing’s influence in regional diplomacy is on the rise.
South Korea’s tightrope act
The summit has been a balancing diplomatic test for the ties of Seoul with Washington and Beijing. Lee took power in June after the ousting of his hawkish predecessor and confronts a twin challenge of safeguarding South Korea’s export-heavy economy while containing security risks from North Korea.
Lee called at a news conference for a “new phase of cooperation” with China.
“We must transcend simple restoration and build a path that benefits both countries,” he said.
Lee hosted Xi for a state dinner and bilateral talks; Xi first visited South Korea in 11 years. The leaders discussed trade, regional cooperation, and security concerns, including denuclearization of the Korean Peninsula.
Only days earlier, Lee hosted President Trump on a whirlwind state visit that produced the surprise trade agreement slashing U.S. tariffs in exchange for billions of dollars’ worth of South Korea’s investments in American industries.
AI, Demographics, and Shared Futures
While trade tensions dominated the headlines, other longer-term challenges taking center stage at the APEC summit dealt with artificial intelligence issues, demographic shifts, and cultural industries. Leaders adopted two separate statements-one on the call for responsible AI collaboration and another on dealing with population ageing, falling birth rates, and urbanization.
The APEC members have reconfirmed their commitment to the Putrajaya Vision 2040 in respect to the long-term direction on an open, fair, and sustainable trading environment.
“We recognize that robust trade and investment are indispensable for shared prosperity of the Asia-Pacific,” the declaration said.
The statement also avoided using the term “free and open trade,” while retaining its spirit, along with economic cooperation and multilateralism, noted Jeonghun Min, a professor at South Korea’s National Diplomatic Academy.
“The rest it wasn’t possible to leave out entirely,” he added.
Trump–Xi Trade Truce: Temporary Reprieve
The day before the summit, in a sidelines meeting, Trump and Xi reached a trade truce whereby the U.S. would ease tariffs on Chinese products. In return, China would crack down on the illicit fentanyl trade, restart soybean buying, and not cut exports of the so-called rare earth minerals critical to U.S. industries.
The deal provided only temporary balm to global markets that have been rattled by months of tariff exchanges. Experts also warned that the rivalry between the United States and China was far from over, with Washington’s new “economic security” policies signaling continued competition over technology, semiconductors and energy supply chains.
Regional leaders extend beyond trade. On the sidelines, Taiwan’s APEC representative Lin Hsin-i also met with US Secretary of the Treasury Scott Bessent to discuss semiconductor supply chain resilience, among other broad themes that have come up in light of continued tensions over Taiwan’s status and dominance in global chip manufacturing.
Xi, meanwhile, held bilateral meetings with leaders from Japan, Canada, and Thailand, expanding China’s diplomatic outreach beyond its traditional allies. APEC’s Evolving Role in a Fractured World Since its inception in 1989, APEC has consistently espoused free trade and economic integration across the Asia-Pacific. But against the specter of expanded nationalism and protectionism across the globe, its mission is under correction.
The 2025 summit proved that against deep splits, countries remain attached to cooperation but with changing centers of influence. As the two biggest economies in the world readjust their strategies, middle powers like South Korea and Japan, along with ASEAN nations, test a pragmatic balance wherein they maintain trade ties with both Washington and Beijing and avoid entanglement in their rivalry.
Looking Ahead
The Gyeongju summit closed with one message resounding: The global trade order is reaching a new phase-one no longer defined by U.S. leadership alone. China’s increased assertiveness, technological ambitions, and the shifting allegiances of regional economies point toward a more multipolar Asia-Pacific. Next year’s APEC meeting in Shenzhen will be one test of whether Beijing can convert the rhetoric of “shared prosperity” into real regional leadership-or whether the fissures in the global trade architecture will widen further. https://www.thehindu.com/news/international/apec-summit-south-korea-china-xi-jinping-updates-november-1-2025/article70228425.ece
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