“The golden age of globalization that we experienced in the last 30 years since the end of the Cold War has clearly ended and we are entering a new era, a new era that will be marked by increased geopolitical dispute,” said Deputy Prime Minister of Singapore. and Finance Minister Lawrence Wong.
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The golden age of globalization is over and a fundamental change is taking place in the way the world works, Singapore said. Deputy Prime Minister and Minister of Finance Lawrence Wong.
Although countries have not fully retreated into protectionism, companies are increasingly influenced by geopolitical tensions, Wong said during a dialogue at the Forbes Global CEO Conference in Singapore on Monday night, referring specifically to the tense relations between the United States and China.
Wong said, however, that Singapore and the rest of ASEAN want a balanced relationship with both the US and China and prefer that the two countries engage with the region “on their own merits” rather than through through the prism of a US-China relationship.
“Where the logic used to be, countries don’t have to be friends to do business with each other. In fact, the hope was that the more we traded and invested with each other, we would reduce geopolitical rivalry,” Wong said.
“Remember the McDonald’s theory that where we have McDonald’s everywhere, there will be no war? Well, that was history and the end of history.”
“So now a different logic is at play… the golden age of globalization that we have lived through in the last 30 years since the end of the Cold War has clearly ended and we are entering a new era, a new era that will be marked by a major geopolitical dispute”.
If those developments normalize, the world will become more dangerous and fractured, he said.
Tensions and business between the United States and China
Singapore will continue to work with the United States and China without taking sides, Wong said, adding that a likely meeting between the leaders of the two nations is encouraging.
“With that ability to meet to meet in person, there will be the possibility of establishing a new modus operandi between the two countries, recognizing that, in reality, the world is big enough for China and the United States and that the two countries do not have to define their relationship in terms of confrontation,” Wong said.
He warned of the effects such a relationship could have on the perceptions of younger generations in the US and China.
“And if there’s no capacity for person-to-person connection and communication to happen, it’s very easy to portray the other side as the bad guy, we’re the good guys. And both sides do that.”
“And you’ve got a whole generation of people growing up thinking that way, so what’s going to happen 50 years from now, 30 years from now? I think that’s something we should be concerned about.”
Business leaders participating in the conference discussions agree that the widening gap between the US and China is not good for business.
“Look at it from the other side of the mirror. China has just had an American shock,” Cheah Cheng Hye, co-chairman of Value Partners Group, a Hong Kong-listed fund management company, said during a panel at the conference.
“The generation of Chinese born perhaps in the last few generations, many of them idealized the United States and the American way of life. It is a great shock for the Chinese of this time to be shunned by the United States and subjected to racial profiling, there is a lot of disillusionment , there’s a lot of ‘what do we do now’.”
Although the positive engagement does not mean there will not be “rigorous competition” between the two nations, working together will be beneficial, especially when it comes to issues such as climate change and pandemic responses, Wong said.
The United States and China have benefited from being financially intertwined, Avanda Investment Management founding chairman, former chief investment officer of Singapore’s GIC, Ng Kok Song, said during a panel at the conference.
Ng said studies showed that many US companies in the S&P 500 have benefited from China’s growth in terms of revenue and size.
Similarly, the Chinese have welcomed international capital and financial institutions into their market, John Studzinski, vice president and managing director of US investment management firm Pimco, said on the same panel.
Asked about a timetable for his succession as Singapore’s new prime minister, Wong did not give a specific answer, warning that there are more pressing issues, including the high cost of living, a possible economic slowdown next year and the threat of new Covid pandemic mutations.