Singapore’s top trade official said the city-state is willing to facilitate a dialogue between the US and China to repair their relationship, as he described growing tensions between the world’s biggest economies as detrimental to the world.
US-China tensions “have serious consequences for the rest of the world,” Singaporean Minister for Trade and Industry Gan Kim Yong (顏金勇) told Bloomberg Television’s Haslinda Amin in an interview yesterday.
“Singapore, as you know, has always wanted to do business with both,” he said.
Photo: Reuters
Singapore’s economy relies heavily on trade and is vulnerable to shocks resulting from disruptions in commerce, especially involving China, the city-state’s No. 1 trading partner. The latest trade tensions stem from the US’ effort to clamp down on China’s access to critical semiconductor technology and to impose export controls.
“All of us are concerned and watching this development very closely,” Gan said, referring to the export controls.
“Singapore’s interests and interests of the rest of the world are for the US and China to have a stable relationship as well as a constructive one,” he added.
Singapore and other Southeast Asian governments have been focused on building their relationship with the US around talks on the White House’s Indo-Pacific Economic Framework.
While participants have celebrated renewed attention from Washington on the 10-nation region and its neighbors, that agreement has been under fire for being too focused along counter-China lines and bearing too little substance — especially with no market-access deals that the trade-reliant nations across Asia crave.
While the pace of Singapore’s economic expansion is expected to moderate to a sluggish 0.5 to 2.5 percent this year, it is confident of avoiding a recession amid a boost from China’s reopening.
“We depend on the growth of the world to fuel Singapore’s growth,” Gan said, adding that forecasts would be adjusted depending on the evolving global environment.
Against the backdrop of US Federal Reserve Chairman Jerome Powell delivering hawkish messages on its inflation fight this week, Gan said “the jury is still out” on whether the US will achieve a soft or hard landing and its impact elsewhere.
Countries are having to balance the need to fight inflation with supporting growth, he said.
Closer to home, Gan commented on a critical issue facing multinational businesses, as well as expatriates and local residents, in Singapore: still-soaring rental costs.
He said that broad-based elevated inflation “is going to stay for some time,” and officials were encouraging firms to focus on boosting productivity and revising their business models with an eye also toward cost savings and reducing waste.
While the government has instituted various cooling measures, including in the budget last month, rental costs remain high and a pinch on cost-of-living especially for the expatriate community and multinational firms.
Rents in the city-state also saw strong growth last year, soaring about 30 percent. They are expected to climb a further 10 to 15 percent this year.
As Singapore embarks on a spate of construction projects that were delayed due to the COVID-19 pandemic, about 100,000 new units to be completed through 2025 should alleviate those rental costs somewhat, Gan said.
He focused more on those supply-side issues, rather than further policy changes on top of the budget measures.
“It’s important for us to continue to assure people that our building programs are catching up,” Gan said. “It is definitely important for us not to have a knee-jerk reaction and introduce structural changes to the property market to address a temporary issue.”
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