Singapore must be prepared to deal with fallout from the US-China trade dispute, said Trade and Industry Minister Chan Chun Sing on Tuesday (May 14), amid worsening tensions between Washington and Beijing.
Mr Chan said the trade war, which he labelled as “serious”, reflects deeper tensions between the US and China and domestic challenges within their economies.
“Many in the US, in and out of the administration, Republican and Democrat, see China as a strategic competitor. Some in China wonder if the US is seeking to thwart China’s growth,” he said in a Facebook post.
Mr Chan warned that while some businesses may benefit from the disruption in trade in the near term, worsening trade tensions will hurt global business and consumer confidence as many countries depend on a global system underpinned by stable US-China relations.
“Singapore cannot be immune from all these fallouts. We need to follow closely what is happening, and gird ourselves to deal with the impending challenges,” he said.
Mr Chan said it is important that Singapore gets its fundamentals right by ensuring the business environment and workers’ skills remain competitive, amid ongoing disruptions.
Singapore can be the “safe harbour” for data, finance, talent and technology and a trusted hub for progressive rules and regulations.
“We can further distinguish ourselves by being the connector across different systems and standards. We will continue to promote integration, not fragmentation,” Mr Chan said.
Globalism Under Pressure
The US-China trade war escalated on Monday after Beijing said it would raise US$60 billion tariffs on US exports by next month, in response to US President Donald Trump’s decision to raise duties on hundreds of billions of dollars in Chinese goods.
Mr Chan said earlier on Tuesday that the world is at an inflexion point, with the international geopolitical environment under stress.
“Great power rivalry and nativist politics have added isolationist pressure, threatening to reverse globalisation and the idea of cooperation and shared benefits,” he said in a speech at the opening dinner of the 6th International Maritime Security Conference.
Held in conjunction with the International Maritime Defence Exhibition and Conference (IMDEX) Asia, the conference expects to draw more than 400 participants, including navy chiefs and policy makers.
“The US-China trade tension has hurt the global economy. In fields such as telecommunications, adoption of new technology is counterweighted by national security concerns.
“Brexit is an example of fragmentation come true: people unhappy with unequal distribution of wealth and progress feel that globalisation has allowed others to take advantage of them, and they therefore seek to protect themselves by isolation.”
Greater Need For Integration
However, the world economy needs to integrate now more so than ever to power the next wave, he said.
“New forms of connectivity in regulation, data, talent, technology, and finance have risen, which complement existing global trade flows.”
There is thus a need to connect in new domains while safeguarding free movement and openness in current trade networks, he added.
“We need to strengthen the existing rules-based order to provide a strong foundation for the global economy of tomorrow,” he said.
Mr Chan also said in his Facebook post that Singapore must work together with other like-minded countries to support a global trading system.
“Singapore supports a rules-based, stable and predictable international trading environment, which has been a crucial enabler for our growth,” he said.
“We are pushing for an integrated global digital economy, rather than risk a fragmented world where small countries like Singapore are shut out.”