SINGAPORE – Frictionless relations between China and the United States are probably not possible, but that should not necessarily lead to the division of the world economy into two disengaged camps, said Senior Minister Tharman Shanmugaratnam.
Speaking at the 2022 Bloomberg New Economy Forum at the Capella Singapore on Tuesday, he added: “Imagine a world where China and the US are decoupled in trade, in investments, data, payments, financial systems, intellectual property creation. That would be a profoundly dangerous world.”
“A multipolar world was never going to be frictionless. But it is much safer than a world that is decoupled,” he said.
His comments followed the first in-person meeting on Monday in Bali, Indonesia, between United States President Joe Biden and Chinese President Xi Jinping since Mr Biden took office almost two years ago. Both sides agreed to resume cooperation on issues including climate change and food security.
After the talks at the Group of 20 summit in Bali, Chinese Foreign Minister Wang Yi said both sides “hope to stop the tumbling of bilateral ties and to stabilise the relationship”.
China-US relations have soured in recent years, starting in 2018 with tit-for-tat import tariffs and, more recently, a US ban on exports of certain advanced semiconductor technologies.
Mr Tharman said easing tensions between China and the US may not assure lasting peace, but it will make the world a safer place.
“I think there is a way forward. We haven’t reached the precipice yet,” he added.
“We have to look at the world fundamentally through the lens of uncertainty, expect that things may pan out very differently from what we hope for and don’t just bet on the upside, don’t bet on what we hope to see, anticipate what can go wrong, prepare for it, and try to prevent things from going wrong.”
He expressed the hope that the Biden-Xi meeting will go a long way in helping the global economy confront multiple challenges and threats, including recovery from the Covid-19 pandemic, high inflation that may lead to recession and climate change.
He said the world needs sustained, large-scale investments to ensure energy and food security and transition to a green economy.
“The scale of investment required is one that can only be delivered through public-private partnerships,” he noted.
The fifth annual Bloomberg New Economy Forum, held from Tuesdsay to Thursday, Nov 15 to 17, is likely to attract more than 500 top company executives and policymakers from 53 countries.