US-China relations ‘not amenable to quick fixes’: PM Lee

[SAN FRANCISCO] THERE may not be any “quick fixes” to the US-China relations, but a high-profile meeting between leaders of the world’s two largest economies was an important step towards cooperation, Singapore’s Prime Minister Lee Hsien Loong said.

“It does not mean that things will now get better and better,” he told Singapore media on Friday (Nov 17) at the end of his six-day working trip to the US to attend the Asia-Pacific Economic Cooperation (Apec) summit in San Francisco.

On the sidelines of the summit, US President Joe Biden and Chinese President Xi Jinping met on Wednesday – their first face-to-face meeting in a year.

PM Lee said he does not think their relations are “amenable to quick fixes”, owing to the deep differences in perspectives, interests and philosophies, as well as their competition for influence.

Still, they do need to work together, said the prime minister, because “there are many problems which cannot be solved without both America and China participating together”.

“There are elections coming next year in the US. And in Asia too, there are various hotspots which there can be developments,” he said. “If they are in contact, you have a better chance of keeping things on an even keel.”

A NEWSLETTER FOR YOU

Friday, 8.30 am

Asean Business

Business insights centering on South-east Asia's fast-growing economies.

Sign Up

On Singapore’s part, PM Lee said the Republic has “no choice but to say we continue to depend on free trade”, multilateralism and working with other countries, in a global environment that is now less predictable and more divided.

However, negotiations surrounding the trade “pillar” of the US-led Indo-Pacific Economic Framework for Prosperity (IPEF) appear to have stalled, leaving it the only pillar of cooperation where consensus remains elusive among the 14 member countries.

“Countries have been discussing the contents of the trade pillar and made substantial progress,” said PM Lee. “But looking at the state of play of the political scene in the US, they do not feel that they are able to push across the finishing line yet.”

Discussions on trade reportedly hit a snag due to domestic pressures in the US that may intensify in the lead-up to the presidential elections next year.

“We are keeping this issue warm and we hope that when the stars line up in a better position, we will be able to make more significant progress,” PM Lee said.

Still, IPEF member countries “substantially concluded” negotiations on the clean economy and fair economy pillars and signed a first-of-its-kind agreement on supply chain resilience.

The conclusion of those discussions creates opportunities for Singapore, said PM Lee.

He said Singapore is very interested in the hydrogen potential in clean economies, and hopes to participate and benefit from it because it is one of the ways for the city-state to import renewable energy.

The fair economy agreement deals with anti-corruption, something that Singapore is very strict on, he said.

“The more countries can agree to uphold rules for operating cleanly and free of corruption, the easier it is for our businesses to operate,” he said.

Singapore ‘open for business’

He added that there is also an opportunity for Singapore to engage with other economies to share practices and learn. Despite competition among member economies, cooperation is still needed when it comes to climate change, the digital economy and having more secure supply chains, he said.

“We do need to work together in order to derive joint benefits, because if we did not work together, we would be at cross purposes and making our problems worse for each other,” he said.

PM Lee said it is particularly encouraging that there are Singaporeans in the US working on their own startups and companies. That is one way for Singaporeans to do business with the world: “Go out to the world and do business where the world is.”

Another way is to bring companies into Singapore and make sure that Singapore stands out as a special environment.

“Our responsibility is to make them welcome, to create an environment, and also to get Singaporeans to understand that this is adding jobs and opportunities for us,” he said.

“Of course, we have to make sure that our infrastructure is there – there are enough houses, enough flats, enough train services and everything else, so that Singapore can accommodate all the people who want to be here,” he added.

WTO reforms

Separately, at the Apec economic leaders’ retreat on interconnectedness and building inclusive and resilient economies on Friday morning, PM Lee pushed for reforms at the World Trade Organization’s (WTO) 13th Ministerial Conference in Abu Dhabi next February.

“Its appellate body remains paralysed. Its member countries must make tangible progress to restore a fully and well-functioning dispute settlement mechanism, one that is binding and enforceable,” he said.

International organisation reforms should also recognise economic and political realities, he noted.

“We should explore and adopt flexible modalities such as ‘flexible multilateralism’ through plurilaterals such as the JSIs (joint statement initiative), and also ‘responsible consensus’ where we adopt a win-win approach to avoid undermining collective systemic interests,” he said.

Meanwhile, trade rules need to address new opportunities, such as the digital economy. Another priority area for WTO is food security, he added, because all economies need unimpeded access to food and agricultural commodities, especially during crises.