After falling out of favour during the global economic turmoil, APEC's propensity for dressing up its leaders in "silly shirts" returned with a gusto on Monday as Indonesia's guitar-strumming president led a stylish parade of Balinese design.

US President Barack Obama was a notable absentee, perhaps relieved that a budget shutdown kept him home after he axed the annual fashion show when he chaired the Asia-Pacific Economic Cooperation summit in Hawaii two years ago.

Secretary of State John Kerry was there instead, sporting a purple shirt made of a silk-like Balinese fabric called "endek".

While the fabric was woven in Indonesia, it came from China, a win-win outcome given APEC's stated goal of tearing down trade barriers.

Chinese President Xi Jinping came in communist red while Russian President Vladimir Putin -- who also dispensed with the APEC shirts tradition in Vladivostok last year -- wore green.

The shirts and blouses were on display as the heads of government trooped into greet Indonesian President Susilo Bambang Yudhoyono at the start of a summit dinner.

"After an already busy first day, and tomorrow's tight schedule, let us relax, enjoy the dinner and cultural performance tonight," Yudhoyono said before a gala performance that featured barefoot Balinese dancers and, later, a full-throated rendition of Psy's "Gangnam Style" by two male singers.

The Indonesian leader had already leavened the mood earlier Monday in a break from sombre discussions about risks to the global economy and hand-wringing about the political warfare between Obama and US Republicans.

Yudhoyono, who has a series of albums of love songs to his name, brought out his guitar when he learned that it was Putin's 61st birthday. Cheered on by Xi, he strummed "Happy Birthday" as Russia's tough-guy leader smiled broadly.

"It was a surprise," Putin said later to Yudhoyono at another function in front of reporters, adding "terima kasih", Indonesian for "thank you".

The rendition recalled another bygone tradition of musical performances at a security-oriented Asia gathering which, in Hanoi in 2001, unforgettably featured then-US secretary of state Colin Powell serenading Japan's female foreign minister in the guise of a lovelorn cowboy.

The last APEC fashion show occurred in Singapore in 2009, when relatively restrained shirts by a local designer were the order of the day.

It has seen its share of fashion disasters, sometimes leaving leaders looking grim-faced at group photos.

President Bill Clinton started the tradition in 1993, handing out leather bomber jackets in Seattle. Blue-and-gold South Korean silk overcoats called durumagi were the bold choice in Busan in 2005.

The next year, then-US president George W. Bush and Putin were required to don flowing silk ao dai tunics in Hanoi.

Peru topped that with brown ponchos that unkind fashionistas said resembled potato sacks.

Yudhoyono, however, was undaunted when he brought out traditional dress at a separate East Asia summit in Bali in 2011, and followed up with the best of the island's artisanal design on Monday night.

Bali is a Hindu outlier in Muslim-majority Indonesia, and endek is a tie-dyed cloth usually used for Hindu rituals, made by hand on wooden looms. By tradition, the ability to weave the cloth signifies a Balinese girl's coming of age.

The Balinese designer who made the APEC shirts, Ida Bagus Adnyana, told AFP that the particular pattern used for the leaders "symbolises harmony and balance".

While Bali is best known as an easy-going holiday paradise, the island is painfully familiar with tragedy.

Soldiers and paramilitary police were out in force for the summit. This week marks the 11th anniversary of the Bali bombings, which killed 202 people, mostly Western holidaymakers.