No extraordinary steps needed yet to counter trade war impact: Heng Swee Keat

Deputy Prime Minister Heng Swee Keat (left) meeting Chinese Vice-President Wang Qishan in Beijing yesterday as part of his four-day visit to China that also took him to Chongqing and Tianjin. PHOTO: MCI
Deputy Prime Minister Heng Swee Keat (left) meeting Chinese Vice-President Wang Qishan in Beijing yesterday as part of his four-day visit to China that also took him to Chongqing and Tianjin. PHOTO: MCI

It is unrealistic to expect that the United States and China can resolve their long-drawn trade dispute in a few meetings, but if the two sides can agree on a number of key areas first, it would be an important step that will restore global confidence, Singapore Deputy Prime Minister Heng Swee Keat has said.

Trade conflict between the world's two giants is a negative for the global economy, and Singapore will continue to be affected if the situation deteriorates, he warned.

The Republic is taking steps to stem the fallout, easing its monetary policy just a few days ago by reducing the pace of appreciation of the Singapore dollar slightly.

"I do not see a need at this stage for any extraordinary measure. Budget 2020 is coming up in a few months' time, and we will continue to monitor the state of the global economy, and there are many sectors in our economy that are still growing," Mr Heng, who is also Finance Minister, said yesterday.

Mr Heng had said in July that the Government was ready with a stimulus package to help Singapore workers and businesses, should the economy take a plunge.

Singapore narrowly dodged a technical recession - or two consecutive quarters of quarterly contraction - based on figures released by the Ministry of Trade and Industry on Monday.

Yesterday, Enterprise Singapore released data showing that non-oil domestic exports fell by 8.1 per cent last month, shrinking only marginally less than the 9 per cent fall seen in August.

The trade war has hit not just the two largest economies in the world, but roiled global markets as well.

Trade negotiators from the US and China recently reached a partial agreement that in effect kicked the can containing the harder-to-resolve issues down the road.

While some analysts have expressed scepticism about whether the two sides can eventually sign a deal, others laud this as a good first move to bridge the divide.

Singapore's finance and insurance sectors are growing, as is the information and communications technology industry. Infrastructure projects can also be brought forward to support the construction industry, Mr Heng said at the end of his four-day visit to China for an annual top bilateral cooperation meeting.

"What we need to continue to focus on are structural policies that will put our economy on a very different trajectory, and there, the industry transformation maps we have launched are an important element of our structural policies."

 
 
 
 

Mr Heng said he has discussed with Trade and Industry Minister Chan Chun Sing about having more extensive consultation with business leaders in the next few months, as they prepare new measures to tackle this transformation.

The Deputy Prime Minister ended his trip yesterday, which had taken him to Chongqing for the bilateral cooperation summit that yielded nine deals; to Tianjin, where he visited Singapore's second inter-government project, Tianjin Eco-city; and to Beijing, where he met Vice-President Wang Qishan and Vice-Premier Liu He.

Mr Liu has been leading China in the trade talks with the US.

"Premier Liu and I shared many common views on how we need to all restructure our economy and how we need to find opportunities to grow with one another, and I think he is taking a very positive approach in this with the US as well, and I hope that there can be an early resolution for some parts of the disagreement," said Mr Heng.

 
A version of this article appeared in the print edition of The Straits Times on October 18, 2019, with the headline 'No extraordinary steps needed yet to counter trade war impact: Heng'. Print Edition | Subscribe