SHENZHEN: Singapore is prepared for the negative consequences that may arise from a protracted trade war between China and the United States, said Deputy Prime Minister Heng Swee Keat on Tuesday (May 28).
Besides having monetary and fiscal policy to counter any cyclical downturn, he stressed that Singapore needs to ensure that its economic transformation takes place “at an even faster pace”.
“Besides the trade war, we are also going to be faced with very rapid changes in technology,” said Mr Heng. He added the country needs to transform quickly and in the process, ensure that workers are not “left behind”.
“This is of utmost importance and we must focus our minds and our energies on this,” said Mr Heng. “I hope that corporate leaders in Singapore take this very seriously because this is also an opportunity for us to turn adversity into strength.”
Mr Heng was speaking to Singapore media in Shenzhen while on an eight-day visit to China which ends on Wednesday.
This came as tensions between China and the US have reignited in recent weeks, with trade talks reaching a deadlock and additional tit-for-tat tariffs being imposed.
“Everyone expresses hope that this can be resolved in time to come. But at the same time there is also a preparation that the Chinese people would have to stay resilient if the trade war escalates further,” said Mr Heng of his discussions with Chinese leaders.
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During his visit – which covered Beijing, Shanghai, Guangzhou and Shenzhen – Mr Heng met Chinese Premier Li Keqiang and Vice Premier Han Zheng, among others on the Communist Party of China’s Politburo.
“There is a recognition that it is to no one’s benefit,” said Mr Heng. “The effects on the regional and global economy will be very negative but this is not an issue that can be resolved immediately.”
He pointed out the International Monetary Fund has downgraded the 2019 global growth forecast three times – weighing significantly on investment sentiment.
“I think what we in Singapore, as well as many countries in the region, want to see is that there can be a good resolution and at the same time we should continue to build on other initiatives that can further cooperation across different countries,” he added.
TAKING SINGAPORE-CHINA TIES FORWARD
This is Mr Heng’s first visit to China since becoming Deputy Prime Minister earlier this month and he was asked how he intends to bring the bilateral relationship forward as head of Singapore’s fourth-generation leadership.
Mr Heng said that at every stage, Singapore and China have been able to look at projects that are beneficial to both sides. He added there have been many projects discussed that can take cooperation forward over the next five to 10 years.
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“One strong characteristic of the Chinese system is that the political leaders, as well as the business leaders, think in (the) long term … as well as how they can scale these operations beyond just China,” said Mr Heng.
“That provides many areas for us to cooperate (in), for us to work together. In the same way, we must take a more strategic view of the future development and position ourselves well.”
This means Singapore companies have to step up their transformation, said Mr Heng, who noted that Chinese companies have grown significantly in their capabilities.
Singapore must also ensure that its talent pool remains strong and are well exposed to developments in China and around the world.
“That is the only way that we can add value, and we must raise our capability and continue to be valuable and useful, and to be able to understand the cultures and systems all around us so that we can play a useful role,” said Mr Heng.
Turning to the next meeting for the Joint Council for Bilateral Cooperation – the highest level forum between Singapore and China – which is set to take place in China later this year, Mr Heng said he had a productive discussion with his fellow co-chair, Vice Premier Han Zheng, to prepare for this.
Key areas of cooperation that are being looked into include areas in the Belt and Road Initiative, the Yangtze River Delta area as well as the Greater Bay Area.
Greater collaboration between Shenzhen and Singapore in smart cities is also on the cards.