SINGAPORE: Singapore is “in no position” to prescribe actions for the United States and China, but it hopes both sides can keep open lines of communication, especially at the highest levels, said Deputy Prime Minister Lawrence Wong on Monday (Sep 26).
By doing so, there will be an ability to establish “a new modus vivendi” between the two superpowers, he said at a dialogue session held as part of the Forbes Global CEO Conference 2022.
Simmering tensions between the major powers have been a challenge for both countries and businesses, given how ties between US and China is the “most consequential relationship in the world”.
But US-China relations have been worsening day by day, owing to divisions ranging from ideologies, systems of government and more recently, escalating tensions over Taiwan, Mr Wong said.
“The fortunate thing is, I think on both sides, the leadership do not want direct confrontation at all because they know so much is at stake and there is everything to lose,” he added.
“So that restrains them somewhat, but we do worry that there may be accidents and miscalculations, which can cause things to worsen very quickly.”
Singapore is a friend of both the US and China, said Mr Wong, while adding: “We are in no position at all to prescribe actions for either party, but we have been encouraging both sides to keep open lines of communication, especially and including at the highest levels.”
“It’s good that the leaders on both sides have had a virtual meeting recently and they have agreed also to meet face-to-face quite soon.
“With that ability to come together to meet in person, there will be an ability to establish a new modus vivendi between the two countries, recognising that the world is big enough for China and US to coexist, and the two countries do not have to define their relationship in adversarial terms,” Mr Wong added.
While there can be “very rigorous” competition on several fronts, both countries also have several shared interests, especially in issues such as climate change and pandemic response which require the two major powers to come together in order for there to be progress, he said.
Domestic politics, in both US and China, is a barrier to easing tensions, said Mr Wong. While the current generation of leaders understand the stakes at play, the concern may lie with the next generation.
“Today’s generation of leaders on both sides do understand the stakes because on both sides, people have seen what conflict is like and they don’t want to see it happen in their lifetimes. What we should be worried about is … the next generation (who is) growing up in a very different environment, in both US and China.
“If there is no ability for that people-to-people connection and communication to happen, it’s very easy to portray the other side as the bad guy (and) we are the good guys,” he continued.
“And (if) both sides do that, you have a whole generation of people growing up thinking that way. Then what happens 20 years from now (or) 30 years from now?”
That is why, stressed Mr Wong, maintaining lines of communication and having people-to-people contact is important.
“Because it’s all about building trust and you’ve got to do that at a strategic level between US and China,” he added.
“As the saying goes, trust is built painstakingly drop by drop, but trust can be lost in buckets very quickly. We hope that the leadership on both sides understand the importance of building trust, both for today and for the future.”
The dialogue session, moderated by Forbes Media’s editor-at-large Rich Karlgaard, also touched on issues such as the waning support for globalisation in the world and the future of free trade agreements.
Mr Wong, who is also Finance Minister, reiterated the “existential” importance of trade for Singapore and the region.
For the latter, the hope is for major powers to engage ASEAN in a more constructive and comprehensive manner, as well as “on its own merits, not through the prism of a US-China relationship or US-China competition”, he said.
The new Indo-Pacific Economic Framework, launched by US President Joe Biden, can be a platform for the US to engage the region more comprehensively, although “the key is to make sure that this continues through different administrations”, he added.
ON SINGAPORE AS A FINANCIAL HUB
Asked about his hopes for Singapore as a global financial hub, Mr Wong noted how an industry transformation map was launched for the financial services sector about five years ago.
The annual targets under the roadmap were to achieve average real value-added growth of 4.3 per cent in the financial sector, while creating 3,000 net jobs between 2016 to 2020. But the roadmap has since surpassed targets on both fronts – the sector grew by an average of 5.7 per cent per annum over those five years, alongside the creation of an average of 4,100 net jobs each year.
Beyond that, there has also been a “growing vibrancy” across different segments in the industry, be it in capital markets, financial institutions and also the growing financial technology (fintech) space.
But Singapore does not take things for granted, said Mr Wong, which is why it has announced an update to the industry transformation plan recently.
“We are always paranoid that somebody else will take our lunch so we are continuing to set new targets for the next five years, to see what more we can do to deepen our capabilities, anchor new players in growing areas like digitalisation and sustainability,” he added.
On the country’s talent strategy, Mr Wong said given how the only resource that Singapore has is its people, it has to “turn that adversity into an area of strength” by developing human capital to its fullest potential.
“That’s for our own people in Singapore, giving them opportunities to excel, do their best, be the best that they can possibly be in all areas … And at the same time, we want to stay open to bring in talent from around the world.
“And here in Singapore, you can form the best teams, comprising Singaporeans, as well as people everywhere, and we want you to be able to do exciting, cutting-edge innovative projects to push the frontier and take us forward,” he told the audience at the Ritz-Carlton Millenia hotel.
ON POLITICAL TRANSITION
Mr Wong was also asked by Mr Karlgaard about his relationship with Prime Minister Lee Hsien Loong and when he might take over the reins.
In April, Mr Wong was named as leader of the ruling People’s Action Party’s fourth-generation or 4G team, paving the way for him to become Singapore’s next Prime Minister. In June, he was promoted to deputy prime minister.
“It’s not a question I can answer because we haven’t decided,” Mr Wong replied, adding that his priority at the moment include tackling pressing issues facing the country such as cost of living, as well as navigating a possible economic slowdown next year and the lingering COVID-19 pandemic.
“So these are taking up a lot of my time,” he added.
“We do think about the transition and the timing. The Prime Minister has said that he would like it to be sooner, and he never fails to remind me that this is something that’s on his mind,” Mr Wong said.
“But I have also said that we will do it at a time … when I’m ready for it and when I’m confident that the team is ready for it, I will let him know. And we will certainly let Singaporeans know in due course too.”