The new geopolitical challenges

GEOPOLITICAL challenges are, almost by definition, complex. Each major challenge that could affect Singapore – today, the US-China contest, the Russian war in Ukraine and the growing China-India rivalry – requires a deep understanding of the historical and contemporary forces that drive it. It’s dangerous to make predictions about the future. It always surprises us. Yet, there’s no doubt that the US-China contest will accelerate in the coming decades and become the biggest challenge for Singapore companies.

This acceleration will be driven by a complex constellation of forces, which I have described in my book ‘Has China Won?’ The US establishment has reached a consensus that it has about a decade to stop China from becoming number one. This is why some influential American policymakers are calling for a “decoupling” of the US and Chinese economies. If this happens, Singapore companies could be hurt in the process. Hence, every company director should make a deep effort to make sense of the complex issues surrounding the US-China contest.

Take the issue of “decoupling”, for example. The political impulse to “decouple” is very strong. In September 2022, the US Congress asked the CEOs of Bank of America, Citigroup and JPMorgan Chase if their banks would pull assets out of China and stop doing business with the Chinese Communist Party if China were to invade Taiwan. They all replied that they would follow government guidance on the matter. In short, they would pull out of the Chinese market if the US Congress asked them to. Some Singapore companies may be relying on American banks to finance their transactions with China. Would this financing end if the US Congress calls for a termination?