WHILE the hope is that United States President-elect Joe Biden will be able to build a better relationship with China, domestic politics may constrain what is possible there, as well as in the area of international trade, said Prime Minister Lee Hsien Loong at the Bloomberg 2020 New Economy Forum.

In an interview with Bloomberg News editor-in-chief John Micklethwait, Mr Lee gave his views on issues such as the future of US-China ties, multilateral trade agreements, Singapore's Covid-19 efforts, and dealing with the next big pandemic.

Mr Lee hoped Mr Biden would be able to focus "on developing a framework for an overall constructive relationship with China", in which there may be competition and issues, but both sides "do not want to collide and will try very hard to develop the areas of common interest and constrain the areas of disagreement".

Things have become harder "because the consensus to see China as a strategic threat is almost becoming received wisdom and unquestionable in the US, in Washington", he noted. "It will be very difficult for any administration, whether it is Biden or on the other side Trump, to disregard that and then just proceed as if the last few years had not taken place."

On the issue of trade, while Singapore hopes the US will someday return to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), that will realistically not happen soon, said Mr Lee.

"I still think that it makes sense for the US, but it has to make domestic political sense as well. That will take time and a different alignment of the economic situation as well as the political configuration in the US."

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But he does hope that with a Biden administration, the World Trade Organization "will no longer be deliberately pushed to one side" as was the Trump administration's policy.

Also discussed was Singapore's response to Covid-19, including its preparations for obtaining a vaccine.

As a small country, Singapore has sought to make arrangements with multiple vaccine makers "so that when products become available, we will not be last in the queue", said Mr Lee, adding: "I doubt we will be first, but we do not want to be the last."

While efforts against Covid-19 have prompted a draw on past reserves of up to S$52 billion, the hope is to return to balanced budgets, though that may take a while.

At the upcoming Budget in February, "even a balanced budget will be very hard to do", let alone a surplus, said Mr Lee. Spending will be needed for Covid-19, keeping the economy going and people in jobs, and providing help to those not in jobs.

He noted that jobs will not yet be available in some sectors which "are going to be at best in suspended animation for quite some time to come", particularly aviation, tourism, and entertainment.

"It is better for me to take care of them and keep these sectors in suspended animation, then to risk reviving them before we are ready to deal with the consequences and then we have another major Covid outbreak," he added.

Asked about the one thing that must be changed after Covid-19, Mr Lee looked towards the next great pandemic, saying that the world needs "a global institution and surveillance network" so that the alarm can be sounded early when the next pandemic arrives.