Singapore Finance Minister Says Trade War Hurting Global Investment
Since Singapore’s independence in 1965 it has become one of Asia’s most important trade and finance centers and a staunch supporter of globalization and free trade. However, the globalized free-trade system that has been growing since the end of the Cold War is facing serious threats from rising economic nationalism.
At the World Economic Forum in Davos, Switzerland, Singaporean Finance Minister Heng Swee Keat told Caixin in an exclusive interview that the trade war between China and the U.S. would not just affect Singapore but supply chains around the world. The uncertainty is also causing global investors to worry. “Investors are taking a wait-and-see approach,” he said. “You’re not going to invest a huge amount of capital when there’s so much uncertainty. Uncertainty is bad for global investments.”
On top of that, the International Monetary Fund has downgraded its global growth prediction for a second time.
This year, the American delegation, British leaders, French leaders and more have canceled their trips to Davos amid crises at home. One of the major topics up for discussion among the guests this year is the effect of China’s slowing economy on global growth. As China’s largest source of foreign investment from 2013 to 2017, Singapore is naturally watching this trend very closely. To this, Heng said that Singapore’s investment into China is led by the private sector and that China’s structural economic reform has given such companies a reason to be optimistic about the long-term. “China’s technological development, in particular information technology, has been very impressive,” he said.
Heng’s recent election to be the assistant secretary general of the ruling People’s Action Party last November has brought him lots of attention. As one of the core members of Singapore’s fourth generation of leadership, Heng, who was one of founding father Lee Kuan Yew’s private secretaries, is now rumored to be the city-state’s next prime minister.
In response to a question about the similarities and differences between the ideas of the fourth generation of leaders and the founding generation of leaders, Heng said Singapore’s more than half a century of governance since its independence has proven the government’s unchanging commitment to maintaining close ties with the people and to working for their wellbeing.
However, the aging population and scientific and technological developments pose special challenges for Singapore’s state and society. New political leaders must adapt and make appropriate changes, Heng said. “In fact, even during Mr. Lee Kuan Yew’s long tenure as the prime minister, he was making changes all along. There is no one formula that works all the time. Because the global situation is changing, the global political landscape is changing, the global economy is changing, technology is changing, and the capability of our people and the aspirations of our people are changing. So in this state of change, we must continue to stay relevant and to stay useful.”
According to Heng, a small country like Singapore is always looking for how it can stay relevant to the world. “We will have to continue to be pragmatic about looking at what works, and we have to be prepared to try,” he said.
“I hope that our young people can have the skills to work with people from all over the world and to have a deeper understanding of our friends in the Asian region, and at the same time be able to work with people all over the world,” Heng said. “I think global partnership and collaboration will be key to resolving many of these global challenges.”
Contact reporter Ren Qiuyu (email@example.com)
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