Singapore Premier’s remarks of a considerable risk of severe US-China tension, is an eye-opener for nations in the Asia-Pacific region although such tensions would , inevitable, inflict considerable damages on the world economy as a whole.
However, he stressed the fact that military confrontation would be highly unlikely. Mr. Lee noted that if China and US take hard lines on issues due to domestic consideration, they could find themselves at an impasse.
Although Mr Lee was reluctant to give advice to China, he noted China’s political direction had sparked tensions with nations big and small.
“There is significant uncertainty [and] anxiety over which way China is going and whether this will be good for them,” he told BBC World News’ Talking Business Asia programme.
“I do not think that is in China’s interest.”
As Singapore plays a vital role in the economy of the region, the Singaporean leader’s views on the US-China relationship are often sought.
For Singapore, China-US relations matters a lot as the US is not only its security partner, but also its biggest investors. China is important for Singapore as it is the largest export market for the city state.
Obviously, like most of Asian countries, Singapore’s economy has profited from China’s rise as an economic super power.
Costly US-China trade war
The intensely fought costly US-China trade war has adversely affected Singapore’s delicate balance over the last two years.
Although the US-China trade war started during Donald Trump’s tenure in office, there is, apparently, no guarantee that the Biden administration would soften US’s stance and trade relations with China and trade policies on China.
However, PM Lee indicated that newly-elected American leader would be someone who “believes in multilateralism and international trade”.
Dealing with the issue of cold war for global dominance between the two super powers, he noted; “The US is still number one but number two [China] is not so far behind,” he said. “That is what is difficult for the US to accept.”
Prospects of China-dominated world
According to some estimations, the Chinese economy will overtake the US to become the world’s largest economy by 2028, five years prior to the previously forecast.
As China rose as an economic power house, it becomes increasingly aggressive under its charismatic leader Xi Jinping.
This aggressive nature on the part of China has effectively led most of the countries in the West to condemn China’s action, while some of the Asian countries raised concern about it.
Despite these factors, Singaporean premier emphasised its neutral foreign and trade policy that it could not afford to side with any party.
“It is a problem for many countries, which is why we are all hoping and encouraging the two large powers to think very carefully before deciding that the other one is an adversary which has to be kept down, if not put down,” he said.
“What we would like to see is China being a country where its prosperity, development and growing strength is welcomed by other countries in the world, who see this as an opportunity for them to prosper together and live in a stable world together.”
The deterioration in US-China bilateral trade relations is taking place in an environment of the global pandemic and a barrage of attacks on globalisation that enabled Singapore become one of the richest countries in Asia.
Singaporean PM believes that globalisation still has room to play and particularly, in the context of global cooperation on vaccines.
“You cannot avoid working with one another because to go back to where you were… lies poverty and despair and probably instability and conflict,” he said.
Post-pandemic travel
Post-pandemic recovery in general and travel & tourism is vital for the city state which depends on travel and tourism.
Although premier suggested that vaccination passports could be part of that process, he warned it would take some time before international travel returned to pre-pandemic levels.
“It will not be like before where you can just buy a ticket, hop onto the plane and go off to Hong Kong, Bangkok or Bali for a weekend or a casual holiday,” he said.
“Hopefully by the end of this year or next year the doors can start to open, if not earlier.”
Before the pandemic, tourism’s contribution to Singapore’s GDP was four per cent and it was forecasted to increase to 4.04 percent in 2020.
US-China tensions will have an adverse effect on all the economies in the region and this would add another dimension to mixed bag of economic woes for the Coronavirus-hit economies.
Against such a backdrop, neutral trade policy accompanied by an independent foreign policy would enable countries in the Asia-Pacific region not only to cushion out adverse effects arising out of simmering US-China tensions, but also to strike a balance in the investment portfolios, not tilting towards parties to the on-going trade war between the two largest economies and accompanied tensions, particularly, in the Asia-Pacific region.
