DPM: US, China must find new equilibrium for peace, prosperity

The United States and China must find a new equilibrium for there to be peace and prosperity, but this may take some time, said Deputy Prime Minister Heng Swee Keat yesterday.

Both countries are competing within the same interconnected, interdependent system, and decoupling "will lead to mutually assured economic value destruction", he said.

"At best, neither can fulfil their maximum economic potential. There could be a regression in living standards, not only for the US and China, but also the rest of the world. At worst, economic decoupling is a slippery slope towards strategic miscalculation and a disastrous conflict."

In the meantime, countries can foster growth and stability by working together to shape the course of global action, he said.

Singapore can cooperate with like-minded countries as pathfinders to catalyse change, work with its neighbours to keep Asean open, inclusive and credible, and make globalisation work for its people.

He said Singapore has known since independence that it had to stay open, welcome talent from abroad and integrate those who choose to stay on. "A globalised world is not just what Singapore needs to survive and thrive, it also reflects what we stand for as a society. As a multiracial, multi-religious and multicultural society, embracing diversity and growing what we share in common has become, and must always remain, our way of life."

Mr Heng, who is also Coordinating Minister for Economic Policies, was speaking at the 12th S. Rajaratnam Lecture. Organised by the Ministry of Foreign Affairs, the annual lectures are for distinguished public figures to speak on topics related to diplomacy and international relations.

Touching on the US-China rivalry, Mr Heng noted that the two big powers should not let strategic mistrust overshadow opportunities for mutual progress.

While the blurring of lines between competitive domains has made it harder to find common ground for cooperation, it is not an impossible task, he said.

He suggested that they work together to lead the world in tackling shared challenges like climate change, as they did at the recent United Nations climate conference, or COP26, in Glasgow.

He added that the recent dialogue between Chinese President Xi Jinping and US President Joe Biden shows both countries want to manage competition responsibly and ensure that their relationship stays on a stable footing.

"The US and China will compete where they must, but it is critical that there are safeguards in place to ensure that competition does not veer off course into conflict. Any clash between the world's two largest economies will only be to the detriment of themselves and the world," he said.

Turning to the role Singapore can play in restoring global growth and stability, Mr Heng said it can work closely with like-minded countries to create new building blocks for meaningful change.

He cited Singapore's role in sparking the four-country trade deal that became the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and China's interest in joining the pact. This shows how a few determined small states can catalyse change, he said.

A second role for Singapore is to work with its neighbours to keep Asean open, inclusive and outward-looking. Mr Heng said China's economic success has been a boon for the region. He urged the US not to be absent from the region's evolving economic architecture, saying the US' security presence alone is not enough to ensure stability.

Asean must also maintain its credibility, he said, noting that the grouping's position on Myanmar shows it can hold its own against external pressure. "We have taken a principled position to forge consensus, and urge other countries to do likewise," he said.

Third, Singapore must continue to improve the lives of its people and ensure the spoils of globalisation are equitably shared. Governments that have failed to do so have seen domestic support for globalisation wane, hampering their ability to strike deals needed for reforms to the multilateral system, he said.

For Singapore to continue improving its people's lives, it has to stay open and remain relevant to the world. This means adapting the economy and helping workers gain the skills to compete, he said.

"We must continue to attract the best talent from around the world to complement our local workforce, and welcome those who share our conviction and values to settle here," he said.

"The more Singaporeans are with us on globalisation and the more united we are as a nation, the better we can chart our future with confidence while contributing to the global commons, including in the fight against Covid-19."