China's growth is 'virtually unstoppable', says George Yeo
CHINA could emerge much stronger post-Covid, propped up by its dual circulation strategy and effective containment of Covid-19.
"China this year will grow, at least 2 per cent, possibly 3 per cent. The rest of the world is sliding back 5 per cent, in some cases 10 per cent. That differential is huge," said former Singapore foreign affairs minister George Yeo. "If Covid hangs around for another one or two years - because vaccines are not magic bullets and there will be side effects or some people will be reluctant to take them - some countries will continue to flounder while others will steadily move forward," he pointed out.
"When all this is over, the league tables will change dramatically. There will be new winners and many losers and this will be at many levels - the level of social organisations, of companies, of countries," said Mr Yeo at the Bank of Singapore and OCBC Premier Private Client's flagship conference, The Next Inflection Point, during his keynote conversation with OCBC Group CEO Samuel Tsien.
Mr Yeo added: "I think China will emerge much stronger."
Indeed, China's growth is "virtually unstoppable" said Mr Yeo, short of a nuclear exchange.
"It's like a teenager which is growing, which has to grow, which needs to grow... The growth dynamic defines China during this period. It will not grow forever and very soon, its demographic profile will turn adverse. But for this period, China will continue to grow," he noted.
"By the end of the decade, it will be the world's biggest economy in nominal terms. In 20 years time, it will be huge, maybe larger than the US and Europe combined."
Mr Yeo, who is also senior adviser to Kuok Group and Kerry Logistics Network, further opined that globalisation has reached its apogee, and while it will not reverse course, there is already increasing interest in local content. This fits in well with China's dual circulation economy strategy of domestic reliance and global integration.
In fact, China has always been a "self-sustaining universe" and this strategy to maintain their own domestic economy gives them more flexibility in managing external relations, he said.
"They're preparing for war but they don't want a war. They know that it will take time for the Americans to accept the reality of their re-emergence, of a multi-polar world. And during this period, which may extend over many years, it must not be held hostage to certain critical imports of technologies."
Asked what South-east Asia should be more concerned about - the rise of populist movements or China's signalling that they are prepared to go to war over Taiwan, Mr Yeo said it is the latter. "Accidents can happen. And in history, people don't always plan to go to war, they can stumble into a war."
On the question of populism, Mr Yeo simply noted that it is an issue faced all over the world and a challenge particularly for democratic societies. Ultimately, the concept of Asean plays an important role for maintaining harmony in the region.
"The thing about South-east Asia is that however big we are, even Indonesia or Vietnam, we see ourselves as small relative to the big powers and the instinct is to stick together because together, we have more room to manoeuvre," said Mr Yeo. "Everyone can hide behind 'Asean'."
Singapore, meanwhile, needs to continue to remain open to all sides to arbitrage the different domains - between China and the rest of the world and between developed countries and developing countries.
"This is the role we play naturally. It's almost in our blood and our DNA," said Mr Yeo even as he acknowledged that constantly being caught between larger forces can be very uncomfortable. "We have to be super alert so that even before the forces squeeze (us), we can jump out of the way... it is this sense of insecurity that will keep us trim and agile. The moment we become self-confident that we've achieved success, that we're in a comfortable position, I think that's the beginning of the end for Singapore.
"This insecurity which we always complain about, is good for us. It's a condition for our survival and our excellence."