Lee Hsien Loong hoped the American and Chinese leaders would have a “productive meeting in Osaka and … set things in a positive direction,” but “hurt feelings on both sides” is not helping in the trade dispute, he said in an interview with Nikkei Asian Review prior to the June 28-29 Osaka summit.
PM Lee likewise hopes that the highly expected meeting between President Donald Trump and his Chinese counterpart Xi Jinping will revitalise trade talks between the two superpowers, after an abrupt interruption last month.
However, PM Lee also hinted that a near-term resolution to the worsening trade conflict between the superpowers was dubious.
Negotiations broke down in May, with Washington accusing Chinese negotiators of upending previously agreed-upon points. Beijing in turn has said US officials had been unreasonable with their demands for change to hundreds of Chinese laws.
“This is a long process. They have been talking for a long time, they seem to be making progress. Unfortunately, there was no deal at the last minute,” Lee said, according to a transcript of the interview.
“I think there were some hurt feelings on both sides. So it will not be so easy to overcome the problem.”
PM Lee further said that it would be impossible to make progress if either side felt that trade was being used as a way to “one up on the other parties or to keep the other party down.”
As a consequence of the trade tug-of-war, Lee expects Singapore’s 2019 gross domestic product growth to be between 1.5% and 2.5%, “significantly lower” than 2018’s 3.1% growth.
“But given the global conditions, I think it is about the best we can do. Meanwhile, we make our continuing efforts domestically to upgrade our workers, to upgrade our businesses, to transform the economy and adapt to the new world,” he said.
The prime minister, however, said he did not think the trade war’s short-term impact would be as harsh as the aftermath of the 2007-08 global financial crisis.
He then stressed the fact that the long term the feud could have serious consequence to the structure of the global economy, raising the prospect of a “bifurcation of technology of markets” as a major negative for international trade, the prime minister said.-/TISG
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