Lee Hsien Loong (Singapore Prime Minister) – Future of Trade | Bloomberg New Economy Forum (Nov 2020)


Chapters

00:01:11 Emerging U.S.-China Relations in the Biden Era
00:12:04 China's Evolving Role in Global Trade and the Future of Hong Kong
00:16:15 Exploring Regional Trade Agreements and the Future of the Internet
00:24:58 Discrepancy in COVID-19 Management and Outcomes: Asia vs. West
00:30:40 Navigating Economic Challenges and Policy Responses in Times of Crisis
00:34:56 Global Uncertainties and Evolving International Relations
00:40:54 Improving Global Health Surveillance to Prevent Future Pandemics

Abstract

Navigating a Shifting Global Landscape: America, China, and the New Asian Dynamics

In the increasingly complex and interconnected world of international relations, particularly in Asia, the United States and China stand as pivotal players whose actions and policies shape not only their bilateral ties but also the broader regional and global order. This article examines the evolving dynamics of US-China relations, the role of key trade agreements, the impact of the COVID-19 pandemic, and the intricate dance of diplomacy and domestic politics that underpin these developments.

America’s Changing Role and Its Impact on US-China Relations

The “America First” stance of the Trump administration marked a significant departure from the US’s traditional approach in the Asia-Pacific region, prioritizing unilateral actions over fostering stability and alliances. This shift has resulted in a strained relationship with China, characterized by punitive tariffs and a general atmosphere of mistrust. The onus now falls on the Biden administration to rebuild America’s credibility as a reliable partner in Asia, a task complicated by the altered landscape left by its predecessor.

The Challenge of Forming a Coalition Against China

Forming a coalition of democracies to counter China’s influence in the region faces significant obstacles, mainly due to the economic interdependencies many countries have with China. A more nuanced approach that combines cooperation and dialogue is essential for maintaining regional stability and addressing global challenges.

The Trans-Pacific Partnership’s Ongoing Relevance

Despite the US’s withdrawal, the Trans-Pacific Partnership (TPP) remains a significant trade agreement among its 11 member countries. The current US political climate, however, makes rejoining the TPP unlikely in the near term, thereby leaving a gap in America’s economic engagement in the region.

Biden’s Presidency and Potential Shifts in US-China Relations

President Biden’s prior interactions with Chinese President Xi Jinping could provide an avenue for personal engagement and dialogue. Nonetheless, the growing consensus in the US that views China as a strategic threat may limit Biden’s ability to pursue a cooperative stance.

China’s Perspective and Approach to Compromise

China’s emergence as a global economic power calls for adjustments to the global order. However, domestic priorities and a hard-bargaining approach may hinder China’s willingness to make significant concessions in its international engagements.

The Importance of Bilateral Negotiations

For the US and China to find a new equilibrium in their relationship, bilateral negotiations focusing on common ground and specific grievances are critical. Such negotiations are pivotal in forging a new balance of interests and responsibilities.

China’s Economic Emergence and Its Global Impact

China’s economic liberalization has led to increased affluence, power, and global connectivity. Its narrative underscores the mutual benefits of its growth and questions the need for further adjustments in its approach to international relations.

Hong Kong’s Political Developments

The political developments in Hong Kong, particularly the pro-democratic resignations and China’s legislative responses, highlight the ongoing tension between maintaining stability and respecting the city’s unique system. These developments have raised global concerns about diminishing freedoms in Hong Kong.

RCEP and TPP: Divergent Paths in Regional Trade

The Regional Comprehensive Economic Partnership (RCEP) and the TPP represent two distinct approaches to regional trade. RCEP focuses on trade facilitation and cooperation among a broader scope of economies, while the TPP aimed for deeper integration among its members.

The Role of WTO and Challenges of Trade Diplomacy

The World Trade Organization (WTO) is crucial in upholding fair and objective trade rules. However, the blending of trade and non-trade issues often leads to protectionist measures, challenging the principles of free and fair trade. In this context, countries’ reputations in trade diplomacy are becoming increasingly significant.

The Digital Age: Security, Internet Ideals, and Technology Bifurcation

Absolute security in the digital age is unattainable, necessitating practical approaches to risk management. The ideal of a seamless, censorship-free internet is increasingly unrealistic, and the world faces the risk of dividing into regional technology blocks.

COVID-19: Vaccine Accessibility and Distribution Challenges

The pandemic has underscored the challenges in vaccine distribution, with smaller countries struggling to access vaccines amidst larger nations’ prioritization. The WHO advocates for a rational distribution scheme, but reality often sees big countries prioritizing their populations. Singapore’s strategy of diverse vaccine partnerships and preventive measures has been notable in this context.

Singapore’s Pandemic Response: A Case Study

Singapore’s handling of the COVID-19 crisis, particularly its success in managing migrant worker cases and its low fatality rates, contrasts with the struggles faced by some Western countries. This success is attributed to the city-state’s efficient governance, prior experiences with similar crises, and public compliance with health measures.

The Fiscal and Psychological Impact of COVID-19

The pandemic has necessitated a shift in priorities from globalization and trade to public safety and economic stability. Governments worldwide, including Singapore, have used reserves to manage the crisis, indicating a need for a psychological shift towards fiscal prudence.

Biden’s Global Leadership Opportunity and China’s Cooperation Potential

The Biden administration has the opportunity to reassert American leadership on the global stage. China, initially viewing Trump’s presidency as an opportunity to expand its influence, now sees the value of a coherent American foreign policy for global stability. However, both nations prioritize domestic concerns, which could lead to miscalculations in international affairs.

Governance Challenges and Micklethwait’s Retirement

Effective governance varies across countries, and even competent governments face challenges, as evidenced by the pandemic. John Micklethwait, Editor-in-Chief of The Economist, plans to retire in 2022, reflecting a broader trend of leadership transitions amidst global challenges.

Singapore’s Approach to COVID-19: Vaccination, Compliance, and Challenges

Singapore has pursued arrangements with multiple vaccine makers to optimize global vaccine distribution, though this will be challenging due to the large number of countries involved. Vaccines are expected to become more affordable as technologies improve and economies of scale are realized.

Asian countries, including Singapore, have been more successful in getting their populations to comply with necessary measures like mask-wearing and social distancing, leading to lower infection and fatality rates compared to Western countries. Singapore’s elderly population could have been vulnerable, but the country has kept community cases low and provided proper medical care to migrant workers in dormitories.

Singapore faces the challenge of opening its borders to tourists and business travel while managing imported cases and potential outbreaks, a necessity due to its economic reliance on global trade and tourism.

Government Challenges, COVID-19 Impact, and Economic Recovery

Governments vary in efficiency, and even those regarded as exceptional, like Germany and Switzerland, have faced challenges in handling the COVID-19 pandemic. The uncertainty of the pandemic has made rational decision-making difficult, especially in the absence of reliable information, often leading to worse-than-anticipated events and necessitating adaptation and adjustment.

Singapore has used past budget surpluses to address the economic impacts of the pandemic, aiming to return to a balanced budget despite the ongoing challenges posed by COVID-19. The opposition may advocate for increased spending from the reserves, which could lead to deviations from fiscal discipline.

The upcoming February budget in Singapore is expected to continue running deficits due to the pandemic and economic challenges. The government aims to stabilize the economy and support employment through counter-cyclical spending. Sectors like aviation, tourism, and entertainment face prolonged recovery timelines, requiring continued support.

Prioritizing public health measures is crucial to prevent major outbreaks and subsequent economic consequences. Singapore aims to return to balanced budgets once the pandemic subs ides, highlighting the interconnectedness and vulnerability of societies.

John Micklethwait Discusses the Impact of COVID-19 and the Future of US-China Relations

The pandemic has shifted priorities from global trade and technology to people’s safety and well-being. Biden has an opportunity to reassert American leadership, particularly in Asia, despite challenges in Europe, Russia, and the Middle East.

The election of Trump reflected the persistence of the pressures he represented in American politics. Biden must address the division caused by Trump’s presidency and work towards reconciliation. China initially saw Trump’s election as an opportunity to expand its influence but now recognizes the value of a coherent American foreign policy. Biden’s election may offer a chance to improve US-China relations, though domestic priorities on both sides pose challenges.

Domestic considerations heavily influence the foreign policy decisions of the US and China. While a peaceful international environment is desired, it rarely drives domestic policies or leads to adjustments that promote a stable global order. This can result in miscalculations and unexpected developments in international relations.

Micklethwait plans to retire at the age of 70 in February 2022. The election of a 78-year-old president in Tanzania prompts reflection on whether Micklethwait might consider extending his tenure.

Navigating a Complex Future

The complexities of US-China relations, the evolving landscape of trade agreements, the ongoing challenges of the COVID-19 pandemic, and the intertwining of domestic politics with international diplomacy paint a picture of a world in flux. As countries like the United States and China navigate this landscape, their decisions will have profound implications for global stability, economic recovery, and the future of international relations. The need for nuanced, cooperative approaches in dealing with these challenges cannot be overstated, as the world looks towards a future marked by uncertainty but also opportunities for renewed collaboration and understanding.


Notes by: Alkaid