‘Extreme’ US-China rivalry could be ‘disastrous’ for global economy: Singapore’s Lawrence Wong

Singapore’s No 2 leader says various Western tech curbs are unlikely to ‘keep China down’
But he warned that the ‘collateral damage’ from financial measures amid the US-China economic row was unknown

Singapore

Bhavan Jaipragas

Published: 8:26pm, 14 Aug 2023

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The existing state of “extreme competition” between the United States and China, with the mutual use of economic punitive measures, could be “disastrous” for the global economy, Singapore’s No 2 leader Lawrence Wong warned on Monday.

In a wide-ranging dialogue session, Deputy Prime Minister Wong said he believed that the West’s various restrictions targeting Beijing’s access to cutting-edge technologies were unlikely to “keep China down”.

Wong said Washington’s China policy was set to be “the big issue in the world”.

Given that the US was set on “extreme competition” with China, Singapore was concerned about “what can go wrong and it is dynamic, because one country does something and the other country can retaliate”, said Wong.

US, China have ‘irreconcilable differences’ but can coexist: Singapore minister

Speaking at the event marking the 100th birth anniversary of the late independence leader Lee Kuan Yew, Wong noted that when it came to security, countries generally were aware of the collateral damage associated with using certain weapons. But as the world did not have much experience on the use of financial measures in bilateral disputes – as was the case in the current US-China rivalry – the “collateral damage” inflicted by their use was unknown, he said.

“The dynamic that’s now being created because of the US-China extreme competition will lead us down a path that will be disastrous for the global economy,” Wong said.

In the latest development in the superpower rivalry, US President Joe Biden last week signed an executive order prohibiting new American investment in China in sensitive technologies like computer chips, with official approval required for other sectors.

Biden limits US investments in China tech, makes ‘emergency’ declaration

Asked about the impact of Western technological restrictions on China, Singapore’s deputy prime minister said China’s various modernisation efforts – including that of its military – were unlikely to be derailed.

“There will be a trade-off in terms of performance, in terms of power consumption, in terms of reliability – but you can design a workaround solution,” Wong said. “Yes, it will slow down China’s access to high-end capabilities to some extent, but it’s not going to keep China down forever.”

In the conference, Wong also addressed the recent series of scandals that have roiled his ruling People’s Action Party (PAP). Transport Minister S. Iswaran was arrested in July following a corruption probe, while the former parliamentary speaker and an MP resigned in the same month over an extramarital affair.

Observers said the sagas collectively hurt the PAP’s reputation for upholding high standards of probity, and that they could cause a further delay in the transition of power from Prime Minister Lee Hsien Loong to Wong, his designated successor.

Wong was named the PAP’s No 2 leader last year, following a period of uncertainty in the party after the previous heir-apparent Heng Swee Keat said he no longer wanted to be in the running to become the next prime minister.

Singapore’s Finance Minister Lawrence Wong (right) speaking as Prime Minister Lee Hsien Loong looks on at a press conference at the Istana, Singapore on April 16, 2022. Photo: Handout

Pressed by the dialogue moderator and CNN anchor Fareed Zakaria on what he drew from the PAP’s recent setbacks, Wong said he had learned from his broader experience in government to “have a sense of equanimity”.

“When things go right, when things go well for us, people praise us and say we are number one, and we are the ‘gold standard’,” Wong said, adding that the party could not “let that go into our heads”. On the flip side, when they were challenges, it was important to learn from them, he said.

Asked by Zakaria on the position Singapore would adopt if Taiwan were to be attacked by mainland China, Wong said he did not want to be drawn into hypothetical situations. He emphasised Singapore’s adherence to the one-China policy, much like others in the region.

On his forecast on the Russia-Ukraine war, Wong said Singapore was “not monitoring this as closely because it’s not within our region”, but predicted a resolution was not in sight in the near term.