PM Lee warns US-China trade war could split global economy for decades to come

Singapore— Prime Minister Lee Hsien Loong told the Nikkei Asian Review at the G-20 summit in Osaka, Japan, he hopes the leaders of China and the US will take successful steps in defusing trade tensions.

While Singapore is not a member of the G-20 but host nation Japan invited Lee to take part in the conference.

PM Lee said the world’s two biggest economies should build trust at “top level”. US President Donald Trump and his Chinese counterpart Xi Jinping will host a much awaited bilateral meeting in Osaka.

The Singaporean Prime Minister’s concerns is about the ongoing trade dispute between the US and China which has already affected global business and consumer confidence resulting in a decrease in trade and investment.

This will affect employment, PM Lee said.

Furthermore, if the trade war may continue, it can lead to a separation in markets, technology, and trust, Lee said.

PM Lee said, “That would be a structural thing, which will last for many decades,” with ramifications “even more serious than the financial crisis” from ten years before.

“Globalisation has resulted in progress and prosperity in terms of technology, breakthroughs and sharing knowledge among humankind. The alternative will be a less prosperous, more troubled world.”

The answer to the problem, the Prime Minister said, can be found in the two global superpowers engaging “each other at the top level,” starting from lighter issues, and then incrementally building trust before tackling heavier matters.

“Both sides must make clear their objectives and concerns, and reach some mutual accommodation and a meeting of minds…officials can work on individual issues, whether it is trade, intellectual property or cybersecurity. Start with easier ones. Deal with the issues on their own merits, rather than as aspects of the broader disagreement.”

On a realistic note, PM Lee said that he expects the process to trust building between China and the US to be a long one, but he hopes that Osaka will be a good starting point. / TISG

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