* Obama: "I'm sure Chinese don't mind I'm not there"
* U.S. hopes to seal Trans-Pacific trade pact by year-end
* Obama sees no lasting damage if budget solution reached
By Jeff Mason
WASHINGTON, Oct 8 (Reuters) - President Barack Obama said on Tuesday that China had probably taken advantage of his absence from a summit in Asia this week and he warned that the government shutdown and fiscal debate were hurting U.S. credibility abroad.
Obama last week canceled a trip to Indonesia and Brunei, opting to stay home and manage the U.S. government shutdown instead of joining other world leaders at international summits being held there.
A week after the shutdown started, Republicans and Democrats are still at an impasse over how to reopen the government and raise the U.S. debt ceiling before an Oct. 17 deadline.
At a news conference on Tuesday, Obama said he should have been able to make the trip to help advance a trade agreement and present a counterweight to China.
"I'm sure the Chinese don't mind that I'm not there right now," he said. "There are areas where we have differences and they can present their point of view and not get as much push back as if I were there."
Obama's cancellation of the trip, which was also to include stops in Malaysia and the Philippines, has raised doubts about his administration's vaunted pivot to Asia, which was aimed at reinvigoration U.S. military and economic influence in the region while balancing a rising Beijing.
Secretary of State John Kerry attended in Obama's place.
Chinese President Xi Jin ping was in Indonesia announcing a raft of trade deals worth $30 billion when U.S. officials announced Obama would be a no-show.
Obama had hoped to advance talks for a trade pact known as the Trans-Pacific Partnership, or TOP, during the Asia trip. Talks over the pact involve 12 nations and aim to establish a free-trade bloc that would stretch from Vietnam to Chile to Japan.
The United States expressed hope on Tuesday it could seal the pact by the end of the year despite resistance from some countries and Obama's absence from the regional summit.
"It didn't help that I wasn't there to make sure that we went ahead and closed a trade deal that would open up markets and create jobs for the United States, and make sure that countries were trading fairly with us in the most dynamic, fastest-growing market in the world," Obama said at the White House. "I should have been there."
'NOT SHOWING UP TO MY OWN PARTY'
Obama attends summits around the world every year, and U.S. officials prepare for them for weeks. The president's emphasis on attending regional summits in Asia was designed to put muscle behind his promise the United States would remain a Pacific power.
"The irony is our teams probably do more to organize a lot of these multilateral forums and set the agenda than anybody. I mean, we end up being engaged much more than China, for example, in setting the agenda and moving this stuff forward," Obama said.
"It's almost like me ... not showing up to my own party. I think it creates a sense of concern on the part of other leaders."
Since 2011, China has consolidated its position as the largest trade partner with most Asian countries.
It is also the top holder of U.S. debt, adding further pressure to the United States to avoid a default.
Obama sought to assure international partners that the United States would pay its bills and service its debt, but he cautioned that the ability to raise the U.S. borrowing limit lay in the hands of the Republican-controlled House of Representatives and its leader, John Boehner.
Obama lamented the fact that repeated budget crises in the United States were hurting its reputation abroad.
"Whenever we do these things, it hurts our credibility around the world. It makes it look like we don't have our act together. And that's not something we should welcome," he said.
"If we deal with this the way we should, then folks around the world will attribute this to the usual messy process of American democracy, but it doesn't do lasting damage."