The close of Singapore PM Lee’s speech at the Shangri-La Dialogue on the state of US-China relations. The key middle section described the current trends between the US and China. This section covers what other countries, including Singapore, might do in response and provides his conclusion.
What can other countries do collectively, to stem the growing hostility and instability? Small states like Singapore can do little to influence the big powers, but we are not entirely without agency.
There are many opportunities for smaller countries to work together to deepen economic cooperation, strengthen regional integration, and build up multilateral institutions. This way, we can strengthen our influence as a group, and advance a collective position on issues that matter to us, be it trade, security or technology.
Our multilateral institutions today are far from perfect. The WTO is one of the major institutions in the post-war global order, but now it is almost paralysed, and urgently needs reform. Multilateral global deals like the Uruguay Round are no longer practical, when agreement requires a full consensus among 164 member countries of hugely diverse interests and philosophies. Furthermore, the WTO was designed for an agricultural and manufacturing-based world economy, but the world has moved on to services and now increasingly digital and intellectual property, which need much more complicated rules.
The US has lost faith in the WTO. It often acts unilaterally, imposing tariffs and trade sanctions outside WTO rules. It prefers negotiating bilateral deals one on one against smaller countries in tests of strength. It gives more weight to the US’ direct benefits in the disputes at hand, than to its broader interests in upholding the multilateral system. This has caused concern to many of the US’ friends and allies.
Singapore cannot afford to adopt the same point of view. Being small, we are naturally disadvantaged in bilateral negotiations. We need to reform and strengthen multilateral institutions, not cripple or block them. More fundamentally, confining ourselves to a bilateral approach means forgoing win-win opportunities which come from countries working together with more partners. We need to build a broader regional and international architecture of cooperation. When groups of countries deepen their economic cooperation, they will enhance not just their shared prosperity but also their collective security. With more stake in one another’s success, they will have greater incentive to uphold a conducive and peaceful international order. This will benefit many countries big and small.
Thus, short of universal trade agreements, we should at least strive for regional or pluri-lateral arrangements. This may be a second best solution, but it is a practical way to incrementally build support for lower trade barriers and higher standards, which can then be adopted by other countries.
This was the rationale behind the Trans-Pacific Partnership (TPP). The US originally came on board the TPP because it saw the strategic benefits, although it ultimately withdrew. Fortunately, the remaining 11 members were able to preserve nearly all that had been negotiated, and so the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is now in force.
I am glad that more countries have expressed interest to join the CPTPP, including South Korea, Thailand and the UK. China is also watching the CPTPP carefully. They are not ready to join now, but I hope that they will seriously consider doing so sometime in the future. Similarly, I hope one day it will become politically possible for a US administration to rethink the US’ position, and recognise that it stands to gain, economically and strategically, from becoming a member of the partnership that it played such a leading role in designing.
Meanwhile, countries in the Asia Pacific are working on the Regional Comprehensive Economic Partnership (RCEP). The RCEP has a different footprint from the CPTPP. It covers all the key countries on the western side of the Pacific, including Northeast Asia and Southeast Asia, and also importantly India, Australia and New Zealand. This inclusive configuration minimises the risk of the RCEP being misperceived as a bloc that excludes the US and its friends. With such a wide range of participants, RCEP standards are naturally less ambitious than the CPTPP’s, and the deal is also much harder to negotiate. Nonetheless, I hope the participants can take the final step to complete the RCEP by this year, or if not, as soon as the domestic politics of the key players allow.
Of course, regional cooperation goes beyond trade. In Southeast Asia, ASEAN has provided 10 very different countries an effective platform for dialogue and cooperation. ASEAN has deepened ties and kept the peace amongst its members. It has become an effective regional partner of other countries, and enabled its members to project a stronger external presence as a group.
ASEAN works on the basis of consensus. It makes more progress in some areas than others, because ASEAN members are not immune to the strategic forces that pull us in different directions. This is the hard reality of cooperation in a region exposed to multiple external influences. Despite its limitations, ASEAN has contributed much to the well-being of its members and the security of the region, and ASEAN’s partners recognise the value of ASEAN Centrality.
Amid the geopolitical shifts, new concepts and platforms for regional cooperation have emerged, notably China’s Belt and Road Initiative (BRI). Singapore supports the BRI. We see it as a constructive mechanism for China to be positively engaged with the region and beyond. That is why we are active participants. For example, we work with the World Bank to promote financial and infrastructure connectivity, and we provide supporting professional and legal services to BRI countries. We are also partnering China to develop the New International Land-Sea Trade Corridor, which connects Western China to Southeast Asia under the China-Singapore (Chongqing) Connectivity Initiative (CCI-ILSTC).
Of course the substance of the BRI, and the way in which the BRI is implemented, are important. The specific projects must be economically sound and commercially viable, and must bring long term benefits to its partners. This has not always been the case; some BRI projects have run into significant problems. Overall, the BRI must be open and inclusive, and must not turn the region into a closed bloc centred on a single major economy. As Asian countries deepen their links with China, they also need to grow their ties with the US, Europe, Japan and others. In other words, the BRI should help China to integrate with the world. The end result should be to strengthen globalisation, and not to divide the world into rival spheres of influence.
I believe China appreciates this. At the recent Belt and Road Forum in Beijing, Chinese leaders stated clearly that the BRI would be “open, green and clean”. China’s Finance Minister set out debt sustainability requirements for Belt and Road projects, which the IMF has welcomed. In the nature of such reassurances, the test will be how these statements of intent are implemented in practice, but these are steps in the right direction.
Meanwhile, other initiatives have been proposed for regional cooperation. For example, several countries have proposed various concepts of “Indo-Pacific cooperation”. These ideas are less fully elaborated or implemented than the BRI, but Singapore’s attitude towards them is consistent. We support regional cooperation initiatives which are open and inclusive platforms for countries to cooperate constructively, and deepen regional integration. These initiatives should strengthen existing cooperation arrangements centred on ASEAN. They should not undermine them, create rival blocs, deepen fault lines or force countries to take sides. They should help bring countries together, rather than split them apart.
Conclusion
US-China relations will define the tenor of international relations for years to come. It is natural that the two powers will vie for power and influence, but competition should not inevitably lead to conflict. We hope the US and China find a constructive way forward, competing certainly, but at the same time cooperating on major issues of mutual interest.
Some people argue that compromise is not possible or perhaps even desirable, because the US and China hold such different values. Indeed, one US official recently defined the clash with China as “a fight with a really different civilisation and a different ideology”. Others observe that the US is a young country that wants everyone to be like them, while China is an old country that believes no one else can be like them.
To expect every country to adopt the same cultural values and political system is neither reasonable nor realistic. In fact, humankind’s diversity is its strength. There is much we can learn from one another, from the differences in our values, perspectives, systems, and policies. The story of humankind’s progress has been one of exchange of ideas, and continuous learning and adaptation.
Henry Kissinger said last year that “we are in a very, very grave period for the world”. No one can predict which way events will develop. At different times in the last two centuries, Southeast Asia has seen rivalry between great powers. It has experienced destruction and suffering from war and occupation. It has been divided into opposing camps. It has seen how isolation from the world economy led to stagnation and sometimes conflict. At other times, it has benefited from international cooperation that created an open, stable environment where countries could prosper in peace.
On a long view, we cannot rule out any of these eventualities. But in our own generation, we must work together to maximise the chances that countries will have the wisdom and courage to make the right choices, opt for openness and integration, peace and cooperation, and so preserve and expand the progress which we have made together.
Thank you.
The middle section of PM Lee’s speech can also be found in the parallel Talking Trade post for today.
***This Talking Trade is an except from PM Lee’s speech at the IISS Shangri-La Dialogue from last weekend. For the full text, click here. ***