SM Lee warns of continuing United States-China tensions, regardless of US election result

SINGAPORE: Tensions between the United States and China are unlikely to subside in the near future regardless of the outcome of the Nov 5 presidential election, according to Singapore Senior Minister Lee Hsien Loong, who spoke during a forum on Friday (Oct 18).
He highlighted “deep seated attitudes and forces” that were destabilising relations between the two superpowers.
At the FutureChina Global Forum 2024 organised by the non-profit organisation Business China, Mr Lee pointed to the growing perception of Beijing being “a challenger, rival or even a threat” to Washington’s long-term interests. 
He also noted “a deep conviction” among the Chinese that Washington sought to contain and prevent China from surpassing US dominance. 
“So (both sides’ sentiments) have a very fundamental contradiction, which is not going to go away.”
US-China tensions have intensified in recent years with Beijing’s image increasingly suffering in the West where it is viewed as a potential threat to global stability. 
Mr Lee has addressed the trajectory of US-China relations on several occasions, notably the need for both countries to “show leadership” in addressing a range of global issues and continue dialogue.
During today’s fireside chat, without naming any specific country, Mr Lee emphasised that greater influence brings greater responsibility and the need for restraint.
“In a world without an international order,” he said, referencing Thucydides, “the powerful do what they will, and the weak suffer what they must. In such a world, everyone is worse off – including the powerful – because they will inevitably fight each other to the death.”
Americans will vote on Nov 5 to decide their next president – Republican Donald Trump or Democrat Kamala Harris. Whoever is elected will not fundamentally alter the current state of relations with China, Mr Lee said, although approaches taken by both nominees may differ. 
“With Harris, it will progress in a more predictable way, with fewer sudden shocks and less risk of things going completely out of control,” Mr Lee said. 
But if Mr Trump returns to office, the situation could take many unexpected turns, he added.
He also pointed to Mr Trump’s pledge to impose tariffs as high as 60 per cent on Chinese goods. “He may possibly do that. It’s within his power to do that. And if he does that, you’re in uncharted territory” Mr Lee said, also emphasising broader uncertainties that could accompany a second Trump presidency.
“(Mr Trump) will depend on a team, but he will also ‘ad-lib’ and do things which you (don’t) quite expect him to do. In particular, I think what you can anticipate is that his attitude towards allies, towards America’s friends, will be different from what the Democrat administration has done in (the) last four years.”
During Friday’s forum, Mr Lee also fielded questions about Sino-Singapore cooperation as well as China’s economy and its perceived negative image in the West.
On China’s economy, he expressed a strong belief in its resilience and ability to overcome current hurdles, citing the country’s advancements in cutting-edge technology, particularly in electric vehicles and solar panels, as evidence of its capabilities.
“I think the Chinese people…they’ve seen what they can do, they have seen what other countries can do,” Mr Lee said. 
“I think that determination is there and it will cause them to move forward and see through the difficulties. I have reasons for confidence, and I am hopeful that the reasons for confidence will outweigh the signals for concerns.”
When asked if China could do more to improve its image, Mr Lee stated that the issue was not so much about correcting certain fundamentals, but rather about the remarkable scale at which the country has grown. This expansion, he said, has significantly increased China’s core interests and its capacity to overlap with those of developed countries. 

The world must also recognise the shift in China’s current global standing, Mr Lee said, noting that the country’s influence and impact were now on a different and much bigger scale than before. 
Also speaking on Friday was Singapore Deputy Prime Minister Mr Heng Swee Keat, who discussed China’s role in the global economy as well as numerous challenges it faced.
“China is already the largest trading partner for many countries around the world and export-led growth will be much more limited in the coming years,” Mr Heng said. 
He added: “All economies go through cycles. We cannot avoid that.” 
“While China’s economy is going through a difficult patch, I trust that China will embark on difficult changes and regain its growth path to generate enough resources to deal with the many challenges it is already facing and will continue to face in the coming years.” 
Panel experts on Friday weighed in on the state of US-China tensions and implications on the global economy. 
Mr Ashok Kumar Mirpuri, head of international policy & governance at Temasek International and also a former Singaporean ambassador to the US, noted that relations between Beijing and Washington had taken a fundamental shift which has “evolved into a structural competition”.
“Both sides will find it difficult to resolve (tensions and issues) in the foreseeable future,” added Mr Mirpuri. He warned that worsening relations between global powers could have broader consequences if left unchecked. 
“Without global cooperation, we will not be able to resolve (issues),” he said. 
“During the global financial crisis in 2008, the world came together through the G20. Today, if a similar crisis arose, I am (unsure if) the same cooperation would be effective. 
A key measure for global powers could be leveraging the cooperation and influence of “middle powers” like Indonesia, Saudi Arabia and Türkiye,” Mr Mirpuri said. “Globalisation isn’t dead but we have to rewire it. We need to start seeing these countries as potential pivotal players.” 
When asked whether the ongoing competition between Beijing and Washington could further escalate and hinder global development, Mr Bi Jingquan, chairman of the China Centre for International Economic Exchanges (CCIEE), downplayed concerns and said that the “predicted fallout” was “overly exaggerated”. 
As long as critical red lines, such as support for Taiwan’s separation from mainland China remain uncrossed, “everything else would be manageable”, Mr Bi said. 
On the issue of trade, he highlighted the significant potential for economic growth and cooperation despite the imposition of tariffs on both sides, suggesting that opportunities for collaboration remain substantial.
During the panel, experts also proposed measures to help countries shield themselves from intensifying US-China geopolitical rivalry. 
Mr Gita Wirjawan, chairman of Ancora Group and former Indonesian minister of trade, emphasised the importance of fostering dialogue among various stakeholders to identify common ground and manage differences, and also highlighted the Association of Southeast Asian Nations’ (ASEAN) regular ministerial and leadership meetings as a model. 
“ASEAN practises a culture of pragmatism, understanding how to coexist with neighbouring countries in a peaceful and stable manner,” he said. “This is (an area) where I believe Europeans can learn from Southeast Asia – meetings don’t always need a specific outcome. The dialogue is the purpose.”
Meanwhile, Mr Mirpuri called for deeper economic integration as a strategy to help smaller nations avoid choosing sides in the US-China competition. He pointed to ASEAN’s regional cooperation as a model for creating alternative economic structures.
“The more we integrate, particularly in Southeast Asia, the less likely we’ll be forced into taking sides,” he said. “By building a robust economic network across Southeast Asia that serves over 600 million people, we can create a strong, self-sustaining market that allows us to remain neutral in the face of superpower competition.”
With China and ASEAN nations set to deepen economic ties as regional dynamics shift amid a global slowdown, experts pointed to Southeast Asia as a new hub for growth. 
Professor David Li Daokui, director of the Academic Centre for Chinese Economic Practice and Thinking at Tsinghua University, highlighted the critical role of ASEAN in the global economy.
“This is by far, in my view, the most exciting region of economic growth, industrialisation, and urbanisation in the coming decades. This is the new China in terms of economic growth,” he said, adding that ASEAN countries are now China’s top target for regional economic cooperation.
Amid growing Chinese investments, especially in infrastructure, Professor Li sees a future where China-ASEAN ties lead regional growth.
“The biggest area of collaboration between China and the ASEAN countries is infrastructure investment,” he noted, underscoring how Chinese capital is crucial to the region’s development.
At a time when globalisation is increasingly challenged, he also acknowledged that regionalisation is emerging as a viable, albeit less ideal, alternative. 
“This regionalisation is the second best to globalisation,” he said, but warned that “any economic trend will get reversed” over time.
CCIEE’s Mr Bi echoed this sentiment, emphasising that the China-Singapore bilateral relationship has long been a model for China’s opening-up policies. 
“Many of the pioneering policies in these areas later became important policies in China’s opening-up,” Mr Bi noted, referring to projects such as the Suzhou Industrial Park and Tianjin Eco-city.
China’s economic trajectory faced several hurdles throughout the year, including a slowing real estate market, growing local government debt and declining market confidence.
Mr Heng highlighted challenges for Chinese leaders.
“China is already the largest trading partner for many countries around the world,” he told audiences on Friday.
“While China’s economy is going through a difficult patch, I trust that China will embark on difficult changes and regain its growth path to generate enough resources to deal with the many challenges it is already facing and will continue to face in the coming years.”
Experts remain cautiously optimistic about the country’s ability to meet its annual GDP growth target of 5 per cent.
Data released on Oct 18 showed that China’s GDP growth slowed in the third quarter, decelerating to 4.6 per cent year-on-year from 4.7 per cent year-on-year. Taking the latest figures into account, China’s GDP growth is now at 4.8 per cent year-on-year, through the first three quarters of the year.
Still, CCIEE’s Mr Bi believes that the annual target of 5 per cent is achievable, though he thinks it may “end up slightly below 5 per cent”.
He emphasised the government’s recent measures to counteract economic pressures, including increased fiscal and monetary policies aimed at boosting consumption and attracting investment. 
“The stock and real estate markets are still at a low point, but China’s economy has great potential for growth,” Mr Bi said, pointing to sectors such as green energy and digital innovation as promising drivers.
Professor Liu Yuanchun, president of Shanghai University of Finance and Economics, highlighted the significance of recent policy shifts, which represent more than just short-term stimulus efforts. 
“This is not what some people have described as simply flooding the market with liquidity,” Professor Liu clarified. Instead, he said China’s approach is a “cocktail of different approaches” — a blend of short-term demand expansion and structural reform, designed to fundamentally shift behaviour and incentive systems. 
“It provides a turning point, and soon everyone will see it,” Professor Liu added, stressing the importance of these comprehensive reforms for stabilising the economy.
Despite the challenges, experts believe opportunities for growth in China remain abundant, particularly in high-tech sectors and infrastructure development. 
Professor Liu pointed to a series of initiatives by the Ministry of Finance and the People’s Bank of China as crucial to future growth, especially through the expansion of the government bond market and deeper interest rate liberalisation.
These moves, according to him, are “pivotal for future monetary policy operations and the fiscal policy framework.”
Sharing a similar outlook is Dr Yao Yang, liberal arts chair at Peking University’s China Centre for Economic Research. 
He acknowledged that while China’s recent structural adjustments, including efforts to deleverage and address local government debt, have impacted short-term growth, he remains optimistic about the long-term prospects. 
“Technological progress in China is still quite fast… I’m still very optimistic about the Chinese economy,” Dr Yao said, underscoring how innovation continues to drive growth.
While achieving the 5 per cent GDP growth target for the year may be difficult, he believes the economy will come close.
One of the most scrutinised sectors of China’s economy in recent years has been the housing market, which has experienced a prolonged downturn though recent indicators suggest the sector may be stabilising. 
Dr Yao expressed cautious optimism, noting that the housing market has begun to return to normal. “The housing sector has come back to normality… I now feel more confident that this sector is going to stabilise,” Dr Yao said.