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US, China must reconsider positions in trade war that won’t end with ‘one loser and one winner’: PM Lee

US, China must reconsider positions in trade war that won’t end with ‘one loser and one winner’: PM Lee

Prime Minister Lee Hsien Loong speaks at a United Nations event commemorating Gandhi's 150th birth anniversary.

SINGAPORE: The United States and China should reconsider their approaches in a trade war that has seen both countries assert strong views without a willingness to compromise, Prime Minister Lee Hsien Loong said, calling the dispute “very worrying” for the world.

“This is not a struggle which can end up with one loser and one winner,” Mr Lee said in an interview with the Washington Post on Wednesday (Sep 25), adding that it was a “conflict between two systems, almost two civilisations”.

READ: New approaches needed for ‘far from perfect’ multilateral system, says PM Lee in UN address

This comes after US President Donald Trump, speaking at the UN General Assembly this week, renewed his attacks on China, critcising its economic model as being “dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers and the theft of intellectual property and also trade secrets on a grand scale”.

READ: Trump's China trade rhetoric turns harsh at UN, says won't take 'bad deal'

Chinese Foreign Minister Wang Yi in turn warned the US against pushing too hard, saying at a business event in New York that “70 years on, it is important for the United States to avoid picking another misguided fight with the wrong country”, referring to the emergence of communist China in 1949.

READ: China says has no intent to play 'Game of Thrones' but warns on sovereignty

The world’s two biggest economies are set for a next round of talks in October, with Washington threatening to impose new tariffs on hundreds of billions of dollars’ worth of Chinese goods.


But Mr Lee said the US’ partners and allies “are so deeply enmeshed with the Chinese” that forcing them to “disentangle” from Beijing would be “a very challenging strategic stance to take”.

“You wanted an open-door policy on the Chinese,” he said, pointing to a period when the US and China were on better terms. “Now, if the US does not want an open-door policy anymore, where is your part of the world, and who will be in your system?”

READ: NDR 2019: Singapore will be 'principled' in approach to China-US trade dispute; ready to help workers

Mr Lee expressed concern that the US’ hostility towards Beijing may be “overblown” and could become a “self-validating narrative”, deepening tensions that could mirror decades of American policy against the Soviets during the Cold War.

“I think it is very unlikely that you can treat the Chinese the same way that you treated the Soviet Union,” he said, referring to the US. “Even in the case of the Soviet Union from 1946, when you had George Kennan, to 1989 when the Berlin Wall fell, it was 40-something years before their system collapsed.”

Mr Lee added that the Chinese have looked at the Soviet example: “They studied it minutely and are absolutely determined not to go in that direction.”


For its part, Mr Lee said China should also reconsider its approach as a nation that has come a long way from when it was first brought into the World Trade Organisation in 2001.

“They have to take their share of responsibility upholding and supporting the global system,” he said.

“That requires a reset of their status, a reset of their mindset to know that while they may not be a fully developed country yet, they already have to take on responsibilities and make adjustments which may well be politically difficult to do, but are necessary if they are going to live peacefully and to be seen as a constructive player in the world.”

READ: Singapore ‘must expect some fallout’ from US-China trade dispute: PM Lee

However, Mr Lee acknowledged both Mr Trump and Chinese President Xi Jinping have little room to maneuver.

While Mr Trump would not want to concede a lot to China amid a reelection campaign, Mr Xi is grappling with “very difficult structural problems within the economy”. Further complicating matters for Beijing are challenges to “internal cohesion”, Mr Lee said, referring to the political unrest in Hong Kong and detention of Muslim minorities in Xinjiang.

READ: US-China face-off is not a ‘strategic inevitability’, says PM Lee Hsien Loong

Still, Mr Lee said he wants to see “statesmanship, consistency, perseverance and wisdom” from the two countries, adding that US should ask itself if it’s better for China to “be like this and quite powerful, or is it better for them to be like they were when, during the days of Mao (Zedong), when they were much less prosperous or powerful but much more hostile and troublesome”.

“You have to find the right combination of pressure and negotiation, of action and talk, which will lead to a calibrated and constructive outcome,” he stated. “It cannot just be maximum pressure and hope for total collapse of the other party. It will not happen.”

Source: CNA/hz


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