US-China trade conflict can benefit region: Experts

At the 12th Asean and Asia Forum yesterday were (from left) Dr Panitan Wattanayagorn, associate professor at Chulalongkorn University; Dr Ong Kian Ming, Malaysia's Deputy Minister for International Trade and Industry; Singapore Institute of Internati
At the 12th Asean and Asia Forum yesterday were (from left) Dr Panitan Wattanayagorn, associate professor at Chulalongkorn University; Dr Ong Kian Ming, Malaysia's Deputy Minister for International Trade and Industry; Singapore Institute of International Affairs chairman Simon Tay, who was the moderator; Dr Lili Yan Ing, lead adviser on international trade to Indonesia's Minister for Trade; and Mr Jasper Wong, head of construction and infrastructure, sector solutions group, United Overseas Bank.PHOTO: SINGAPORE INSTITUTE OF INTERNATIONAL AFFAIRS

The United States-China trade tensions can have positive spillover effects for the region, said leaders and experts at the Singapore Institute of International Affairs' 12th Asean and Asia Forum yesterday.

Malaysia's Deputy Minister for International Trade and Industry Ong Kian Ming, who was a panellist, said Asean should take advantage of the conflict to deepen regional supply chains and boost intra-Asean trade.

Citing British company Dyson's decision to build its electric car manufacturing plant in Singapore, Dr Ong said: "This is a good example of a win-win situation - while Singapore benefits from R&D investment and engine manufacturing, Malaysia can also manufacture many of the components that go into the electric car."

He observed that while US and European companies have a history of working with local players in the region, China has tended to rely on its own firms.

Such differences in approach were the subject of heated debate at an earlier discussion on regional implications of the trade war.

The associate dean of Fudan University's Institute of International Studies, Professor Shen Dingli, said China was unaccustomed to the US "constantly adding new demands".

In May this year, trade talks between Beijing and Washington collapsed after multiple rounds of negotiations. The US said China backtracked on its previous commitments, while Beijing said Washington made too many demands.

Said Prof Shen: "We want to negotiate with mutual equality and respect. But if the US does not want to make a deal, China's vast domestic consumption will compensate for its inability to export to the US.

"We will also build better infrastructure for a few years to stimulate domestic consumption and investment."

Last week, the US ramped up punitive tariffs for imports from China. The 5 percentage point increases, which will take trade tariffs to 15 per cent and 30 per cent, are due to roll out in stages until December and target items such as laptops, mobile phones and shoes.

 
 
 

Mr Curtis Chin, Senior Asia Fellow at the Milken Institute and former US ambassador to the Asian Development Bank, countered that the US is acting just like China has long been accused of doing by others.

"(Tech giant) Huawei maintains it won't turn over anything to the Chinese government just because it says so. But look what happened with Cathay Pacific."

Mr Chin was referring to the resignation of the Hong Kong carrier's chief executive Rupert Hogg on Aug 16. China's state-run station CCTV announced it before the airline did.

Contrasting it with the rule of law in Asean, Mr Chin said: "The system of free trade, openness and connectivity is what has allowed this region to thrive."

Asked if the US stance would outlast the Trump presidency, Prof Shen said it was clear the US wished to redefine free trade. "China has to deal with its own internal pressures. The US should not push it past the point of acceptability or act on the basis of superiority. That's not the way of conducting business in the 21st century," he said.

Mr Chin said the US trade position had been evolving since the 1990s, when it built labour and environmental protections into trade pacts on the basis of fair trade.

"Now, it's reciprocal trade - should we treat Chinese companies like how China treats foreign companies, such as through forced technology transfer?

"We are pushing for a deal that leads to a more sustained and balanced relationship."

 
A version of this article appeared in the print edition of The Straits Times on August 30, 2019, with the headline 'US-China trade conflict can benefit region: Experts'. Print Edition | Subscribe