Pragmatism may temper turbulent US-China relationship: Asia Future Summit panel

SINGAPORE – The relationship between the US and China will remain rocky over the next five to 10 years, marked by continued tension and turbulence with modest gains possible in ongoing trade talks, observers said during a panel discussion on Oct 9 at the

annual Asia Future Summit

.

While there is some optimism that the relationship between the two superpowers could stabilise, the experts said keeping communication channels open and avoiding conflict is key, with Taiwan a sticking point that could derail relations.

Mr Ashok Mirpuri, head of international policy and governance at Singapore investment company Temasek, was generally positive about the trajectory of US-China ties.

“Both sides understand the risks that a very significant conflict between them will be terrible for all of us,” said Mr Mirpuri, who was Singapore’s ambassador to the US from 2012 to 2023.

The Asia Future Summit held at The Ritz-Carlton, Millenia Singapore hotel is a thought leadership conference jointly presented by SPH Media flagship titles The Straits Times, Lianhe Zaobao and The Business Times, with OCBC as the presenting sponsor.

Dr Wu Xinbo, dean of the Institute of International Studies and director at the Centre for American Studies at Fudan University, believes the US will continue to do whatever it takes to try to contain and suppress China.

But as China continues to make progress in technology and grow its economy, the US may begin to see the limits of its China policy and rethink its approach, he said.

The US may also realise that it needs to cooperate with China on many issues, such as the

supply of rare earth materials

that are critical to a range of industrial and technological applications, as well as the purchase of US-made products, such as aircraft and soya beans.

A more realistic and pragmatic approach by the US towards China would help to stabilise ties, the academic added.

However, he also believes the US-China relationship will go through crises and conflicts, and called for Washington to work with Beijing to put in place mechanisms for crisis management, communication and confidence-building.

Asia Society Policy Institute senior vice-president Wendy Cutler, who is a former US deputy trade representative, said keeping the channels of communication open between the two powers was critical.

“When those channels have been closed, that is when the world gets the most nervous,” she added.

The panel discussion, titled “What’s Next for US-China and the World?”, was moderated by Lianhe Zaobao foreign editor Ng Hui Min.

The panellists expressed mixed views when asked about the likelihood of a substantive trade agreement being reached between the US and China at the upcoming Asia-Pacific Economic Cooperation (Apec) summit in South Korea.

US President Donald Trump had earlier said that he and Chinese President Xi Jinping

would meet on the sidelines of the summit

, which begins on Oct 31. If the meeting goes through, this will be the first face-to-face encounter between the two leaders since 2019.

Ms Cutler said she foresees a productive meeting, but called for modest expectations.

“I think we will see a series of isolated announcements, but not a real trade agreement,” she said, noting that some likely outcomes include finalising the sale of TikTok’s US operations and a further extension of a pause on three-digit tariffs.

In April, the US had slapped a blanket

145 per cent levy on Chinese goods

, while China retaliated with 125 per cent duties on US goods.

Both sides later reached a truce and pared their levies back, with the US tariffs now

averaging 55 per cent

and the Chinese tariffs standing at 10 per cent.

Said Ms Cutler: “I am very sceptical of the US embracing the Chinese request to somehow eliminate or reduce tariffs, particularly for Chinese companies investing in the US. Because if Washington were to do that, they would also have to eliminate those tariffs for US companies, as well as for suppliers from other countries as well.”

Still, she said some progress could be made regarding an increase in foreign direct investment from China into the US.

Dr Wu was more confident about a concrete outcome from the planned Trump-Xi meeting in South Korea, expressing hope about the removal of a 20 per cent tariff by the US on Chinese goods that is related to allegations of fentanyl trafficking.

“Every time the two leaders are supposed to meet, they want to deliver something on the political agenda,” Dr Wu said, noting a positive shift in the mode of engagement recently between the two sides – from coercion to confrontation to talks.

He added: “If China and the US, the two largest world economies, can gradually reduce their friction, reduce confrontation, stabilise bilateral relations, and begin to approach economic relations in a more win-win, rather than zero-sum, turn, I think that is certainly a positive signal to the markets throughout the world.”

Calling for more military-to-military engagement, Mr Mirpuri warned that there are still significant elements of instability between the US and China.

One example is the issue of Taiwan, which poses “significant risk of miscalculation”, said the former diplomat.

The panel also addressed questions about the erosion of the rules-based global order, with Ms Cutler criticising China’s new Global Governance Initiative as “a lot of words, not a lot of details”.

Dr Wu, meanwhile, said China has stepped in to fill the gap left by a more inward-looking US, boosting its funding to the World Health Organisation after the US withdrew from it.

Pointing to the recent establishment of a

partnership between Singapore and 13 other small and medium-sized states

to support free trade, Mr Mirpuri said there will be a new map of globalisation, as other countries build new ties and organise themselves around the US-China rivalry.

“What is the new role of middle power? Where does Indonesia fit in this? Where does Turkey fit? Where does Brazil fit in? These are new adjustments that need to be made,” he added.