US-China row not just about trade, says Heng Swee Keat

LOS ANGELES • Tensions between the US and China may linger even as both countries show signs they are edging closer to an end to their trade war, according to Singapore Finance Minister Heng Swee Keat.

A "quick resolution" could come in areas addressing the trade deficit and protection of intellectual property, said Mr Heng, who has spent the past week in Washington speaking to US lawmakers, officials in the Trump administration and industry experts.

"Many of the leaders and analysts I've spoken to have held the view that this is not just a trade dispute, this is a more complex competition in technology and strategic influence," Mr Heng said in an interview on Wednesday in San Francisco, on the last leg of his US trip. "That means this is not something that will be resolved overnight."

While Singapore has stayed "neutral" with both countries, according to Mr Heng, it is caught in a potential crossfire between China, its biggest trading partner, and the United States, a key ally and investor.

Senior US and Chinese officials are scheduling more face-to-face trade talks in an effort to reach a deal by early next month that US President Donald Trump and his Chinese counterpart Xi Jinping could sign.

The rift between the world's two biggest economies has roiled markets and threatened global growth.

Earlier this month, the International Monetary Fund cut its outlook for global growth to the lowest since the financial crisis a decade ago, amid a bleaker outlook in most major advanced economies and signs that higher tariffs are weighing on trade.

 
 

On Wednesday, Singapore government data showed electronics exports last month slumped by the most since 2013, while global tech giant IBM is closing its technology park in Tampines and moving its high-end manufacturing to the US.

"We must expect there will be changes in how companies relocate their operations in different parts of the world," Mr Heng said, adding that "for Singapore, as a small, open economy, we must be prepared for changes in the global environment".

Singapore has monetary and fiscal policy tools to adjust to changes in the global outlook, and will use this period of uncertainty to "redouble" efforts to restructure its economy and industries, he said.

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A version of this article appeared in the print edition of The Straits Times on April 19, 2019, with the headline 'US-China row not just about trade, says Heng Swee Keat'. Print Edition | Subscribe