SINGAPORE - The leaders of the United States and China have to work out how to resolve their trade disputes, and ensure ongoing tensions do not harm the broader relationship between them, Prime Minister Lee Hsien Loong said on Tuesday (Nov 6).
“The leaders of the two countries have to decide what they want to do and if it cannot be worked out, you really want to keep it from boiling over, respond in a restrained way and try to keep things going and prevent this from poisoning the overall relationship,” he said.
“Between America and China, there are so many things where you have to work together, otherwise you are not going to get anywhere, starting with North Korea.”
PM Lee was responding to a question at a dinner for around 400 top business and thought leaders attending the Bloomberg New Economy Forum. The trade war and its impact on Sino-US ties was a top concern at earlier sessions on the forum’s first day.
Tit-for-tat tariffs on hundreds of billions of dollars of each other’s goods by the world’s two biggest economies, ostensibly sparked by the US’ trade deficit with China, have hit business sentiment.
China’s Vice-President Wang Qishan suggested the US-China trade war should end and denounced trade unilateralism in his keynote speech, while American strategist Henry Kissinger was “fairly optimistic” that the US and China could avoid a wider conflict.
At the dinner dialogue hosted by Bloomberg News’ editor-in-chief John Micklethwait, a delegate asked PM Lee what he would advise Chinese President Xi Jinping and US President Donald Trump to do about the trade war if they were at the same table with him.
“I would be hesitant to be at such a table,” PM Lee replied to laughter from the audience. But he added: “The trade issues are genuine ones. The trade deficit is on Mr Trump’s mind but the economists will tell you (it) is a manifestation of macroeconomic problems and not a matter of trade restraints or lack of trade openness... That has to be dealt with separately.”
PM Lee noted that both sides had come close to a deal several times, but these faltered in the end.
Asked what the new world order would look like, with the US taking a back seat in recent years, PM Lee said he did not see this as a retreat but as the US “rethinking its role”.
“Up till now, America was such a dominant player in the world economy that it felt it was in its interest to provide global public goods,” he said. “The world has prospered greatly, and America with it.”
But with its economic fortunes shifting, the US is asking whether it should put itself first instead.
“America is entitled to take such a position, but if you work like that it will be a very different global position. There is nobody to take on the role that the US hitherto played,” he said. If this persists, it would be “a different kind of world in which not only small countries feel uncomfortable.”
“I hope it doesn’t go that way... And that depends on a multilateral global order, where there is some weight and authority and respect given to supranational institutions like the United Nations, the World Bank, the International Monetary Fund,” he added.
PM Lee was also asked questions about global rivalries spilling over and affecting ties between countries in Singapore’s neighbourhood. “Neighbours are never without complexities,” he said, noting that even the US and Canada have issues.
“We don’t choose our neighbours. We are blessed with two bigger than us, and we get on well with them, generally,” he said. “There will always be issues that will come up, and we will have to deal with them in a way that is constructive, win-win and respects the core interests of both countries.”