US, China must manage tensions, establish strategic partnership: DPM Heng
In a speech at the Asia Future Summit, he notes that the world’s two largest economies share a long-term interest in continued prosperity
IT IS critical for the world’s economic powerhouses US and China to manage short-term tensions while working towards a long-term strategic partnership to promote global peace development.
Deputy Prime Minister Heng Swee Keat made this point on Tuesday (Sep 3) at the Asia Future Summit 2024 Series: Lianhe Zaobao Conversation, an event presented by OCBC and OCBC Premier Banking.
He said that the US and China – major trading partners for many economies and collectively accounting for 43 per cent of global gross domestic product – share a long-term interest in continued prosperity.
Heng also emphasised the need for both nations to understand and address their respective domestic priorities.
However, he pointed out that with the US presidential election approaching in November, it is unlikely that both countries can reach a substantive outcome on long-term development and collaboration in the near term.
“It is important that both countries adopt attitudes and actions to prevent tensions from escalating,” he added. “Over the past year, China and the US have maintained frequent dialogues and exchanges, strategic objectives, as well as mutual trust – which is notable progress.”
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Heng noted that despite their vastly different economic models and governance systems, both the US and China aim to develop new sectors of their economies to benefit more citizens and promote sustainability.
He said that despite some doubts among US citizens over the future of the world’s largest economy, the country boasts a vibrant civil society, deep capacity for innovation, an advanced financial market and the ability to attract global talent.
Heng urged China to address the widening income gap as it continues to enjoy economic growth, and also emphasised the importance of nurturing technological talent and advancing scientific research, particularly in areas such as solar energy and electric vehicles.
Even amid ongoing competition, the US and China have significant opportunities for collaboration to steer the global economy towards a more stable and sustainable path of development, noted Heng.
“As big nations, China and the US also have a responsibility to lead countries in addressing global challenges. Whether it is tackling the next pandemic, climate change or developed countries’ ageing population etc, both countries can play an active and important role.”
In a separate session at the event, Professor Da Wei from Tsinghua University and OCBC’s head of global wholesale banking Tan Teck Long also spoke about the US presidential election’s impact on geopolitics and the future trajectory of US-China relations.
In response to questions about the challenges and opportunities that the future trajectory of US-China relations could bring to Asean, Tan noted that South-east Asia may see relatively more opportunities due to its proximity to China, which positions the region to benefit from the “China plus one” strategy.
He explained that China’s rapid economic development has led to rising land and labour costs, prompting lower value-added industries to seek alternative locations, with many already relocating to South-east Asia.
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