As trade tensions worsen between the United States and China, Singapore must be prepared to deal with the challenges and Singaporeans need to follow developments closely and gird themselves "for the long haul", Trade and Industry Minister Chan Chun Sing said yesterday.
Global businesses and consumer confidence will be affected by the ongoing trade conflict between the two giants, which will hurt global investments.
As a result, there will be a negative impact on jobs, Mr Chan said.
"Singapore cannot be immune from all this fallout. We need to watch closely what is happening. We need to prepare ourselves to deal with the impending challenges," he said on the sidelines of the International Maritime Security Conference opening dinner.
Singapore needs to work with like-minded countries to uphold and update the global trading system, Mr Chan added. "This is why Singapore supports a rules-based, stable and predictable international trading environment, which has been crucial to our growth all this while."
Elaborating on the nature of the trade conflict, Mr Chan said it is serious because it does not just reflect short-term political and economic pressures.
The conflict is also a reflection of the deeper challenges the US and China are facing domestically, as well as the changes in how they view each other and want to relate to each other. In the US, many Democrats and Republicans see China as a strategic competitor. Meanwhile, many Chinese are wondering if the US will work to thwart its growth and development.
"These fundamental issues cannot be resolved in the short term, and Singaporeans must be prepared for the long haul," said Mr Chan, who also wrote a Facebook post on the issue.
As US-China trade patterns shift, there will be an indirect impact on the rest of the global economy, he said, adding that this will have the greatest consequence for Singapore's economy. But by watching these shifts closely, Singapore can carefully position its economy to seize opportunities and manage potential downsides, he said.
When asked what role Singapore can play, he said the country is a friend to both the US and China, and hopes they can work together to underpin the stability of the global trading system.
"To the extent that we can, we will continue to provide our perspective to both China and the US frankly so that they can make up their minds on how they want to move forward," he added.
Mr Chan said Singapore is also working to expand its network of free trade agreements and pursuing other "high-quality, more inclusive digital economy partnerships" which will create opportunities for local businesses and better jobs for Singaporeans.
But beyond its efforts on the international front, Singapore must also get its domestic fundamentals correct, he said. This means ensuring its business environment and workers' skills stay competitive, even amid ongoing disruptions.
He said local businesses must be keenly aware of shifts in global trade flows brought about by the current disruption, as therein lie both challenges and opportunities. They need to diversify so Singapore is "never held (to) ransom by any one particular sector or market", and continue to upgrade business capabilities and workers' skills.
"The Government will spare no effort to make sure that we help our businesses and industry to stay competitive, create the right conditions for people to want to put their investments here, so that Singaporeans can have the best opportunities to have the jobs that we desire."
Mr Chan was also asked what proportion of Singapore's exports will be further hit by trade tensions, if these will impact prices of everyday goods and what he would say to those who fear Singapore may be heading for a recession.
To each, he stressed Singapore is watching the situation very carefully in order to position itself well. He added: "We will need to continue to stay vigilant as a united people, have a competent Government, work closely between Government, business and the labour movement to make sure we can ride through the current turbulent challenges and come out even stronger."
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