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Obama asserts growing US stake in Asia

By Tom Raum

Associated Press

Published: Monday, Nov. 21 2011 1:26 a.m. MST

FILE - In this Nov. 19, 2011, photo, U.S. President Barack Obama meets with Thai Prime Minister Yingluck Shinawatra on the sidelines of the East Asia Summit in Nusa Dua, on the island of Bali, Indonesia.

Charles Dharapak, Associated Press

WASHINGTON — President Barack Obama's close attention to the Asia-Pacific region signaled both a turn toward a part of the world experiencing solid growth and one away from Europe's dark economic woes, at least temporarily.

The president's nine-day trip to Hawaii, Australia and Indonesia was marked by back-to-back summits and high-profile pronouncements, including decisions to station U.S. Marines in northern Australia, advocate a new free-trade area that leaves China out and call on Beijing not to buck the current world order.

He also made an overture to isolated, repressive Myanmar, also known as Burma, dispatching Secretary of State Hillary Rodham Clinton there next month and speaking by phone with peace activist and Nobel laureate Aung San Suu Kyi.

With Europe's growth stalled, and the continent teetering on the edge of another recession, Obama redirected his focus across the Pacific to an area largely out of recession and steadily growing — and which now accounts for roughly 50 percent of the world's economic output.

America's standing in Asia-Pacific has declined in the past decade as China's has increased. China now is the top trading partner for many countries across the region.

Obama portrayed his trip and his new, muscular approach toward China as an effort to help open new Asian markets that could lead to more jobs in the U.S. as he strives to help get the nation's economy back on track, a big order ahead of next year's presidential election.

He was able to perform as an active player in the summits in Hawaii and Bali, Indonesia, and in his visit to Australia — after finding himself largely on the sidelines in efforts to resolve the euro zone's deepening debt crisis.

Obama's goal "is clearly a rebalancing on the economic side and Europe's current economic situation starkly underlines that," said Ernest Bower, director of Southeast Asia programs at the Center for Strategic and International Studies. "Europe is flat on its back, and Asia is growing like a snowball rolling down a hill."

China was the first major world economy to emerge from the 2008 financial crisis. And while it is has struggled to keep inflation at bay, it recently roared past Japan to become the world's second-largest economy. It's on track to overtake the U.S. and become No. 1 within the next few decades.

The financial-system meltdown that hobbled the U.S. and its European allies bypassed Australia and many of its neighbors. And while Japan is still struggling to recover, many of the region's other economies are exhibiting healthy growth.

Obama pledged greater involvement in a wide array of regional security and economic concerns as the U.S. ratchets down its military presence in the Middle East with the withdrawal of U.S. troops from Iraq; and as it seeks to extricate itself from Afghanistan.

"The Asian economies are the fastest growing economies on the planet. It's where the action is, where U.S. businesses are increasingly looking for growth," said Mark Zandi, chief economist at Moody's Analytics. "We've got to be looking toward Asia. Europe is in trouble."

Rapid growth of Asian economies could help offset weaknesses in Europe. Still, China and several other Asian exporting countries do substantial business selling their goods in European countries.

Treasury Secretary Timothy Geithner warned that the European crisis is still "the central challenge to global growth" and urged Asia-Pacific leaders to do more to help keep the European contagion from spreading, including boosting demand in their own countries.

Still, economists generally say that so long as any new recession in Europe is relatively mild, it seems unlikely that it would drag down other economies.

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