Singapore needs to work ‘extra hard’ to maintain valuable ties with China amid uncertainty: SM Lee
He notes that the global strategic situation is tense and that the Republic will have to see what the new US administration’s policies are towards Beijing
[SHANGHAI] There is anxiety on both sides of the US-China divide as a new American president gets ready to take over the White House, according to Senior Minister Lee Hsien Loong who had made recent visits to the two countries.
US businesses are watching to see what the Trump administration will do with China, while Chinese leaders want to maintain relations on an even keel, even as it deals with an ailing economy that will take some time to fix.
Singapore’s relationship with China has therefore become especially valuable in such uncertain times, and the city-state needs to work “extra hard” to maintain those ties, SM Lee told Singapore journalists as he wrapped up his six-day official visit to China on Friday (Nov 29).
That is also the reason for his frequent trips to China, he says. In his 20 years as Singapore’s prime minister, SM Lee visited China 14 times, making him one of the most frequent visiting foreign leaders.
His remarks seem particularly pertinent in a week when President-elect Donald Trump has declared extra 10 and 25 per cent tariffs for China, Canada and Mexico goods, sparking fears of an imminent trade war.
Analysts have warned that Beijing could retaliate with tariffs of its own on a wide range of US products, disrupting American supply chains and squeezing US businesses.
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The global strategic situation is tense, said SM Lee, and Singapore, too, will have to see what the new US administration’s policies are towards China.
“We know what their basic attitudes are, and the basic contradictions between the US and China remain... therefore, in this troubled environment, we want to be friends with all sides and to have mutually beneficial relations with all sides,” he said in Shanghai, the third and final leg of his tour.
As China has a giant footprint in the global economy and presence in South-east Asia and is also one of Singapore’s top trading partners, the relationship between the two countries is one that Singapore has to especially nurture.
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“If we want to make a success of Singapore, we should be able to work with them, certainly not to neglect them, and least of all to be at odds with them, if at all possible,” SM Lee said.
Throughout his visit, SM Lee told his Chinese hosts and also Singaporeans based in China that the cooperation between Singapore and China – built through business ties and cultural connections – is much prized in an increasingly protectionist global climate.
At a meeting in Beijing with President Xi Jinping, he expressed his desire for like-minded countries big and small to work together for the benefit of their people.
His China visit has come shortly after a working visit to the United States in the middle of November, after Trump was re-elected.
In his conversations with academics at Harvard University where the senior minister gave a lecture, and with finance executives in New York, there is anticipation of what another Trump term will bring.
The business community sees “pluses and minuses”, said SM Lee.
“They are not pessimistic about the US economy, because they think a Republican administration generally will be a plus for the US economy. But they are anxious about US-China relations, like the prospects for their investments in China and the outlook for further investments in China, and it’s affecting their decisions.”
Companies, except for those in Germany and Singapore, have held back making ventures into the Chinese market. Actual utilised foreign direct investment amount dropped by nearly 30 per cent in the first half of 2024, although the number of newly registered foreign-investment companies increased by almost 15 per cent, based on data by China’s Ministry of Commerce.
China wants stable ties with America
Likewise, in his interactions in China, SM Lee noted that the Chinese are trying to figure out how they can maintain their relations with the US on some stable basis, “and to have discussions and make commitments which you can follow through on and which will work.. first of all, across the term of change of government, and secondly, hopefully beyond any single term of an administration”.
Whether a rival or an ally of the US, countries have to accept that this is the way the US system works, and do their best to make sensible assessments.
“You… should not be captured by the immediate ups and downs of what happens in the US, because… the interests, the concerns, the problems which need to be worked on, they extend, in many cases, way beyond one term of government,” said SM Lee.
“And therefore, if you want to solve them, or work at them, and if you are able to look beyond four years as a horizon, you should try and do that.”
Lee’s China trip – his first in his new role of senior minister – was made primarily to commemorate the 30th anniversary of Singapore’s flagship official project with China, the Suzhou Industrial Park.
But it also presented an opportunity for the Singapore statesman, who stepped down as prime minister in May, to have face-time with the Chinese leadership and catch up on the country’s rapid technological advancements.
The two companies he chose to visit are at the top of their game – consumer electronic giant Xiaomi, which recently ventured into making electric vehicles; and Agibot, which has created a series of humanoid robots to rival Tesla’s Optimus.
Reviving China’s economy a complex endeavour
Yet, the spectre of a gloomy Chinese economy loomed amid a major property slump, debt-ridden local governments and nagging structural problems. China-based Singapore businesses and Chinese companies he has spoken to are “trying to find their path forward in this environment”, SM Lee said.
For the Chinese government, it is a complex endeavour to find a way to channel accumulated wealth in the economy to the local governments so they can function, while simultaneously trying to restructure the economy to promote higher consumption – this will take time, said SM Lee.
“I believe they will have very capable economists working at it. But the challenge, of course, if we are running a country, is that you’ve got to balance the economic considerations with the political and the social considerations and the national security and external strategic concerns, and make a judgment,” he said.
A challenge, too, is whether the country can “revive the vibrancy, the confidence, the optimism, the innovation and entrepreneurship which have created breakthroughs, unicorns and tremendous sense of dynamism and transformation, which has carried them all the way nearly 50 years since 1978, since they started reform and opening up”.
Without the responsibility of tending to detailed bilateral issues now that he is no longer prime minister, Lee says he is free to help chart a longer-term view of the bilateral relationship, looking at how global trends might impact Singapore and China’s cooperation.
“Our projects are many and our cooperation is deep and wide, so there is always endless work to be done, and I am helping the Prime Minister to do a little bit more in this regard,” he said. THE STRAITS TIMES
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