Secretary of State John Kerry will represent him at the summits in Indonesia and Brunei.
Budget strains had already put a damper on the Pentagon's push to assert itself in the Pacific, and administration officials had begun casting the shift in policy more in terms of expanding diplomatic efforts, creating more trade and economic ties and just showing up in Asia more often.
Now the showing up part has taken a hit.
The Syria crisis is only the latest example of how Obama's foreign policy is still drawn to the Middle East. Defense Secretary Chuck Hagel was in Asia last month when Washington was drawn to the brink of military intervention before Syria agreed to give up its chemical weapons arsenal, diverting Hagel's attention.
The situation works for China, which is rapidly modernizing its armed forces and boosting its regional influence. Xi has been visiting Indonesia and Malaysia this week to improve Beijing's reputation at a time when its aggressive stance on territorial issues has strained ties with some southeast Asian nations. Washington's acute political paralysis gives Xi a freer hand to be the big presence in the room.
"It shows that China has a functional government and America doesn't at the moment," said Kerry Brown, a China expert at the University of Sydney in Australia. "It's just another sign that America is kind of losing its luster, losing its status."
In announcing Obama's decision Thursday, White House press secretary Jay Carney said the government shutdown is "setting back our ability to create jobs through promotion of U.S. exports and advance U.S. leadership and interests in the largest emerging region in the world."
Even so, he said, Obama is committed "to the rebalancing of our policy" toward the Asia-Pacific and looks forward to going at another time. Obama has made five trips to Asia as president.
In Indonesia earlier this week, lawmakers applauded after Xi became the first foreign leader to address Parliament this in a country where Obama lived as a child. Xi's call for greater cooperation began with an informal greeting in the local Bahasa Indonesian language a rare display of oratorical skill for a Chinese leader.
Then Xi went to Malaysia, where he and his wife met Prime Minister Najib Razak and received a ceremonial welcome at Parliament on Friday that included a military honor guard and 21-gun salute.
In Indonesia, Xi signed deals worth billions of dollars, while in Malaysia, he agreed to boost military cooperation and training to fight transnational crime and terrorism.
Experts in Asia said Obama's no-show weakens U.S. leadership globally.
"If they can furlough jobs, cease government services and risk a downgrade in the country's credit rating, American politicians may start finding it tough to be consistent in their political reassurances about U.S. commitment toward faraway Asia," wrote Simon Tay, chairman of the Singapore Institute of International Affairs.
Retired U.S. Adm. Dennis Blair, a former head of U.S. Pacific Command, played down the impact of Obama's cancellation and said the visit could wait until Obama can give the region his full attention.
"The United States has been here in this region in a major economic, diplomatic, military and influential way ever since 1944 and that situation has not changed," he said.