SINGAPORE: Talk of an initial trade agreement between the United States and China could cushion slowing global economic growth, but both countries have some way to go before agreeing on a new model of cooperation, Deputy Prime Minister Heng Swee Keat said.
"The latest talk of a 'phase one' limited trade deal offers some respite, but both sides are still quite far from a new model of constructive cooperation," Mr Heng said at a global outlook forum on Friday (Nov 22).
"The US-China conflict is not just about trade. It is a strategic competition between two major powers – the incumbent and an emerging one – for global influence and leadership."
Mr Heng's speech comes as Reuters reported on Thursday that completion of the phase one deal could slide into next year, as Beijing presses for more extensive tariff rollbacks and Washington seeks to address core intellectual property and technology transfer issues.
"It is also about differences in their systems of governance and how their societies are organised, which stem from their own histories, cultures and values," said Mr Heng, who is Acting Prime Minister while Prime Minister Lee Hsien Loong is visiting South Korea.
"And how they should share global responsibilities and opportunities, in areas like trade and climate change."
While Mr Heng said the US-China trade war has dampened global economic growth, he pointed out that Singapore has avoided a technical recession in the third quarter, with growth in 2020 expected to pick up "modestly".
But he warned that the splitting of technology and supply chains due to the trade war remains a "real possibility", stressing that the implications would be far greater than the Cold War because global economies and societies have now become increasingly intertwined.
"The free, open and rules-based international order is under stress," he added.
"If countries wall up, or if there is a new Iron Curtain, the cost to Singapore will be significant."
BUILD BRIDGES, NOT WALLS
This is why Singapore must build bridges in a world where major powers build walls and societies fragment across different fault lines, Mr Heng said.
“It has been 30 years since the fall of the Berlin Wall, but many more walls have come up, between the competing major powers, and also within societies, across cultural, social and economic lines,” he said.
“We have to go against the current tide, as we cannot afford to be a walled community. Our economy must remain open because trade is our lifeblood. Our society must also remain open because diversity is our strength.”
Mr Heng said this means staying united, renewing and strengthening social compact, and working with like-minded partners – especially in the region – to keep the world open.
When it comes to staying united, Mr Heng said Singapore must never let its guard down in a world that has become increasingly polarised.
The Government has taken "deliberate steps" to strengthen cohesion, he said, such as introducing legislation to deal with hate speech and misinformation, institutional structures to improve trust across different faiths, and policies like the Ethnic Integration Policy for HDB flats to improve social mixing.
"The aim of these policies is not to minimise or paper over our diversity," Mr Heng said.
"We want to prevent walls from being erected and instead create more common space, for our peoples to share their experiences and views, to deepen mutual understanding and respect."
STRENGTHENING SOCIAL COMPACT
Staying united also means progressing together and investing in people, through schools and lifelong learning, to ensure they can make full use of new economic opportunities like artificial intelligence.
"But this alone is not enough, as not everyone is able to keep pace," Mr Heng said.
"Therefore we have to strengthen our social safety nets to ensure housing, education and healthcare remain accessible and affordable to all, to do more for the vulnerable among us."
Even as new opportunities are created, the Government is committed to ensuring that "no one will be left behind, no one will be shut out".
"As long as they are willing to work hard, we will support them to make a better life for themselves and their families," he added.
WORKING WITH PARTNERS
Still, Singapore must not only work together as one nation, but also internationally with like-minded partners.
Southeast Asia is projected to be the fourth-largest economy by 2030, after the US, China and the European Union, he pointed out, adding that a growing middle class means demand for goods and services will grow.
Mr Heng said the Association of Southeast Asian Nations recently concluded negotiations on what would become the world's largest trade pact, while Singapore has been deepening cooperation with Southeast Asia on the bilateral level.
"But we can do more – not just at the government-to-government level," he said.
"We should do more in different spheres and across different levels. All of us need to start thinking and acting regionally and globally."
Mr Heng said Singapore will better prepare and encourage its people to venture into Southeast Asia through study exchanges, work attachments and internships.
For instance, he said the Ministry of Education is doing more to support students who are keen to pick up a third language and is reviewing how it can further improve students’ engagement in the region.
The Global Innovation Alliance also helps connect Singaporeans with their global counterparts and other tech and business communities.
"We also welcome our regional partners to use Singapore as a base to explore the world to build more bridges between our region and the rest of the international community," Mr Heng added.