Hawaii - Testy summit exchange offers peek at U.S.-China rivalry

HONOLULU (Reuters) - As if anyone needed further proof of the depth of U.S.-China rivalry in the Pacific, an unusually testy exchange at a trade summit on Friday laid bare the strains between the world's two biggest economic powers.

Tensions had been building in the lead-up to the annual APEC gathering over a proposed U.S.-led free trade deal that Washington wants as as counterbalance to Chinese influence but Beijing sees as an attempt to force it to play by U.S. rules.

The situation came to a head at a news conference -- on the eve of a leaders' meeting hosted by U.S.

President Barack Obama -- when senior trade officials sparred over a proposed Trans-Pacific Partnership between the United States and at least eight other Asia-Pacific economies.

China's Assistant Commerce Minister Yu Jianhua struck first, saying pointedly that Beijing had not been asked to join talks on the pact but "if one day we receive such an invitation, we will seriously study the invitation."

U.S. Trade Representative Ron Kirk volleyed back, insisting that the proposed pact was not a "closed clubhouse."

"All are welcome. But it is also not one where you should wait for an invitation," he said with a tight smile. The Obama administration has so far given no sign of wanting to lure China into the talks.

Both men spoke in even tones. But the exchange came close to straining protocol at a summit dominated by carefully worded communiques and diplomatically delivered speeches.

China has given a cool reception the TPP idea, apparently concerned that it would be pushed into opening its markets further, at Washington's behest.

Obama wants to use trade liberalization as part of a strategy to reassert U.S. leadership in the economically dynamic region and to confront China as a growing competitive threat.

The exchange also reflected U.S.-China relations beset by a series of disputes. There are disagreements over China's trade and currency practices, U.S. arms sales to Taiwan, China's military buildup in the Pacific and Beijing's human rights record.

Michael Martina and Matt Spetalnick | Reuters

(Writing by Michael Martina and Matt Spetalnick; Editing by Eric Walsh)

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