[WASHINGTON] Competition between the United States and China is likely to intensify over time, but what is more worrying is the relationship and trust – or lack thereof – between the two powers, Singapore’s Minister for Trade and Industry Gan Kim Yong said.
Gan was explaining Singapore’s perspective of US-China relations to about 70 business and economic leaders during a fireside chat on Wednesday (May 1) with The Economic Club of Washington, DC, which similarly hosted Prime Minister Lee Hsien Loong 10 years ago.
“We have concluded that the competition and contestation between the two will continue, and it will probably intensify over time – but that is not the most worrying part because Singapore is very used to competition,” Gan said. “We are an open economy and compete with everybody in the world.”
Instead, what is more worrying is the relationship, trust and understanding between the two, said Gan, who was on an official visit to the US capital in part to commemorate the 20th anniversary of the US-Singapore Free Trade Agreement.
“It will be useful to encourage both sides to continue to have dialogue and engagement, so that while you compete, there is understanding of where you are and what you are doing, to minimise misunderstanding and misinterpretation of the intention,” he said during the chat moderated by Siemens USA chief executive Barbara Humpton.
He added that he is happy this contact has resumed and hopes it continues to grow, especially since there are global challenges that “need everyone to be on board”, such as fighting the climate crisis.
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Relations between the world’s two most powerful economies began thawing after US President Joe Biden and Chinese President Xi Jinping met on the sidelines of last November’s Apec summit in San Francisco.
Businesses could play a constructive role in improving US-China ties, Gan said. “Siemens for example, has a lot of presence in China as well. If you can be the interlocutor, talk about how you can improve the relationship between the two so that you can compete on a fair and reasonable basis – that will benefit all of us.”
Barbara Humpton, CEO of Siemens USA, moderating a chat with Minister for Trade and Industry Gan Kim Yong in Washington, DC. PHOTO: THE ECONOMIC CLUB OF WASHINGTON DC
Specifically, when asked by an audience member about the challenges of doing business with the US, Gan replied that the US and Singapore have always had a very good working relationship, even if the imbalance in size is “very difficult to manage”.
Singapore is a small, open economy in the middle of Asean, he noted, whereas the US is a very large country.
“But we are able to talk to each other on equal footing. What is more important is that we need to understand that each other’s concerns are very different,” he said. “The way to solve this difficulty is really to have a frank and open discussion.”
Gan was also asked what he considered to be Singapore’s biggest challenge, and he replied that this would be its limited market and workforce, as well as being short on energy.
This means Singapore would not be able to accommodate labour-intensive industries or more data centres. However, the city-state is “very keen to look for solutions”, he said.
For example, he recalled suggesting to some platform operators that they site their data centre in nearby Batam or Johor and connect that with Singapore to create an ecosystem.
“You benefit from the green energy that they have, and we can preserve our energy for other data centres,” he said, adding that the city-state is more keen on data centres that are “more strategic and more critical to business growth” rather than mere storage centres.
“These are the things that we are rethinking how can we re-organise ourselves to address challenges that we are facing,” he said. “So whatever challenge you have, tell us, and we are very excited to solve these challenges.”
In the same spirit, he said he has told potential investors not to be overly worried about tax incentives or support schemes, since there are many schemes that may be too complex to grasp.
“So I told them, ‘don’t worry, you just come to us’. If… your needs are justified, we will find a scheme to suit you. (If) we do not have a scheme, we will design a scheme to suit you,” he said.
This is how Singapore is “pro-business”, he said, adding: “We want to lean forward to support the businesses to make sure that your businesses are successful in Singapore.”
At the same time, he encouraged businesses to look at the region beyond Singapore, saying: “Our proposition is that Singapore is a gateway to the Asia-Pacific region, particularly Asean.”
But given Singapore’s limited land and limited manpower, Gan conceded, in response to a question, that the country cannot be a cheap place in which to operate.
“Despite the high level of cost that Singapore is seeing today, we want to mitigate the cost, by offering you a very efficient government system, a very transparent regulatory system and a very established and enhanced infrastructure that will allow your business to operate smoothly, successfully, that no other countries can equal,” he said.
He added: “So despite the costs, it will make your investment in Singapore worthwhile.”
Singapore’s attributes also make it a suitable location for family offices, particularly given the investment opportunities in the region, as well as its connectivity, Gan said, responding to another question.
He added that family offices, as well as multinationals, are often looking for an entire ecosystem.
“We are already a financial centre, and we have very high standard legal services,” he said. “For family offices, they are all looking for high-quality services, consistency, transparency, so that they are quite confident that the money that they’re putting in Singapore will be safe, and the convenience and investing out of Singapore.”
