THE future of the global order will not be defined by the US and China alone, but include other economies such as India and those in South-east Asia, said Deputy Prime Minister and Finance Minister Lawrence Wong on Friday (Oct 7). 

Delivering the keynote speech at Business China’s Future China Global Forum, he said India is set to become the third largest economy in the world by 2030. And with its “growing economic weight”, it will play a larger role in regional and international affairs, and will make its own calculations independently on how to advance its interests in the world.

Closer to home, the countries in South-east Asia – with a total population of 660 million that’s larger than the European Union (EU), have a combined gross domestic product of US$3 trillion which is expected to double, if not quadruple, over the next two decades, he said.

“Because Asean has sound economic fundamentals (and) a relatively young population, there’s demographic dividend to be harvested and tremendous economic potential if things go right,” he said.

Wong said there could be further bifurcation of technology, splitting of supply chains, or even other unintended consequences, if relations between the US and China continue to be fraught given how interlinked the global economy is.

“Even selective decoupling will come at great costs for companies everywhere, and certainly for our region and the world,” he said. “This state of affairs has serious implications for all countries. Certainly for Asia, it is a big change.”

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Despite these challenges, economies should work together to strengthen multilateralism and uphold an open inclusive rules-based order.

“For all of us in Singapore and Asean, this is not a matter of choosing sides; but it’s about making choices for ourselves, advancing our collective interests, and doing what’s best for our peoples,” Wong said.

Singapore’s approach has been to encourage all major partners - not just the US and China, but also the EU, Japan, India and other key partners – to build stakes in the region, and foster economic interdependence and integration.

Singapore has long supported China’s engagement in South-east Asia, Wong said. This is why Singapore supports the Regional Comprehensive Economic Partnership agreement, while China has also signalled its intent to do more with Asean by upgrading the Asean-China Free Trade Area.

Singapore has also consistently participated in and supported China’s reform and opening up over the past four decades, through the establishment of major government-to-government projects such as Suzhou Industrial Park in the early 1990s, the Tianjin Eco-City in the 2000s, and the Chongqing Connectivity Initiative in the 2010s. Singapore was also the first Asian country to sign a free trade agreement with China.

These efforts have seen Singapore-China ties strengthened over the years, with China as Singapore’s largest trading partner and Singapore having been China’s largest foreign investor.

Both countries are collaborating in emerging areas of the new economy like the digital economy and green development, which will open up new opportunities in areas such as digital trade, digitally-enabled services, renewable energy, green financing, as well as environmental services, Wong said.

Various speakers at the event, including Bilahari Kausikan, the chairman of the Middle East Institute at the National University of Singapore, believe the US-China tensions are likely to persist. They warned that while a war by design is very unlikely, what cannot be ruled out is a conflict by accident or miscalculation, especially one involving Taiwan.

Potential changes to China’s political structure drew plenty of interest at the conference, with speculation over who could be the next Premier after Li Keqiang retires in March 2023.

Han Zheng, the current first-ranked vice premier, is 68 years old, which is the customary retirement age for the Communist Party’s top leaders. That leaves 5 possible candidates –Wang Yang, Han Zheng, Sun Chunlan, Hu Chunhua, and Liu He. Only two of them, however, are below the age of 68 today, and they are Wang (67) and Hu (59). 

Political appointments aside, China’s push for a fairer and cleaner society is expected to continue, with focus on refining policies, job creation, economic growth as well as anti-corruption, anti-poverty and anti-pollution drives, said Jin Keyu, Associate Professor of Economics at the London School of Economics and Political Science. 

What is clear is the beleaguered property sector, which once accounted for a third of China’s economy, will no longer be the driving force of the economy, said the professor.