Singapore ‘must expect some fallout’ from US-China trade dispute: PM Lee
23 Jun 2019 06:00PM
Asia
Prime Minister Lee Hsien Loong wrapping up the 34th ASEAN Summit on Jun 23, 2019. (Photo: Aqil Haziq Mahmud)
(Updated: 23 Jun 2019 06:00PM)
Bookmark
BANGKOK: Singapore “must expect some fallout” from the trade dispute between the US and China, Prime Minister Lee Hsien Loong said on Sunday (Jun 23), noting that the way forward is to focus on upgrading the workforce and restructuring the economy.
“You can already see our economy slowing this year,” Mr Lee told reporters on the sidelines of the 34th Association of Southeast Asian Nations (ASEAN) Summit, nothing that growth forecasts have dropped from 3.1 per cent in 2018 to between 1.5 and 2.5 per cent in 2019.
“And you can see that our exports have been affected and factories are seeing their orders down, and the mood is significantly dampened.”
According to surveys, potential risks to the economy include escalating global trade protectionism, a slowdown in China and a global economic downturn.
READ: Singapore’s 2019 growth forecast cut to 2.1%, trade remains top risk: MAS survey
But Mr Lee said it was not possible to “just step on the gas and speed up and make up for a less favourable external environment”.
“What we can do is to keep on focusing on upgrading and training, and restructuring of the economy so that we have the productive capability and potential to pick up again when external conditions improve, and to make the best of the conditions as they are now,” he said.
“That's what we are doing in Singapore and I think that's what the other economies would like to do too.”
WRAPPING UP THE ASEAN SUMMIT
In a wide-ranging interview wrapping up the summit, Mr Lee also touched on the difficulties ASEAN members face in concluding the Regional Comprehensive Economic Partnership (RCEP) and the South China Sea Code of Conduct (COC).
For the RCEP, Mr Lee said it was a matter of getting the bigger economies on board, especially as they have their own considerations. As for the COC, he said its rules and scope are contentious issues that would be difficult to work out.
Mr Lee also touched on a divide within ASEAN due to strategic differences amid US-China tensions, pointing out that members wanted to avoid becoming collateral damage and instead pursue economic integration.
Prime Minister Lee Hsien Loong addressing reporters after the 34th ASEAN Summit on Jun 23, 2019. (Photo: Aqil Haziq Mahmud)
The prime minister then elaborated on his bilateral meetings at the summit with the Vietnamese and Cambodian prime ministers, after his mention of Vietnam’s 1978 invasion of Cambodia drew the ire of both nations.
Mr Lee clarified that while both parties did not expect to change each other’s opinions on the issue, they agreed to move forward and continue developing their relationships.
Mr Lee rounded off by detailing how ASEAN would continue to tackle other environmental challenges after it adopted a declaration on combating marine waste on Saturday.
On the issue of developed countries in the West exporting unwanted rubbish to less developed nations like Malaysia and the Philippines, Mr Lee revealed that ASEAN members were trying to come up with a common approach to overcome the issue.
REGIONAL TRADE PACT AND SOUTH CHINA SEA CODE
On the RCEP, Mr Lee said that while the degree of consensus among the 10 ASEAN members was “quite high”, bigger partner countries like India, Australia and New Zealand still had to “work out with one another what the deal is”.
“Some of these big economies who are partners in RCEP have not quite reached that point yet, partly because of domestic political timings,” Mr Lee explained.
READ: Southeast Asian leaders throw weight behind China-led trade pact
When inked, the pact – involving ASEAN, China, Japan, South Korea, India, Australia and New Zealand – will form the world’s largest trading bloc, making up a third of the global gross domestic product.
“We would like to push it forward as much as possible, and if at all possible, to have substantial completion of the deal this year,” Mr Lee said.
As for the COC in the South China Sea, Mr Lee noted that while ASEAN nations and China are “proceeding with all seriousness and dispatch” to try and complete it in three years, “we also have to watch the content” of the code.
READ: Southeast Asia making good progress on South China Sea conduct code: Thailand
China says it owns most of the strategic waterway – a claim other states dispute – and has been aggressively building and militarising artificial islands as well as confronting ships that enter the zone, actions that give urgency to ASEAN's efforts to negotiate on the area.
“There are some issues in the COC which are going to be very difficult to work out,” said Mr Lee, noting that “contentious” issues include the code’s rules and scope.
“I don't think we can compromise on the content in order to say the deadline is here, let's just make a deal … We have to make sure that we preserve our vital interests. And I think the vital interests will not be easy to reconcile.”
ASEAN DIVIDE
As US-China frictions in the South China Sea spill into areas like trade and technology, Mr Lee said ASEAN members were strategically pulled in different directions, noting that they had ties with both countries and were not about to take sides.
“The divide is a serious issue,” Mr Lee said, adding that ASEAN nations would be negatively impacted if US-China ties turn sour.
“I think there’s a high degree of recognition of that, and a great desire that third countries not become collateral damage if there is friction or worse between the big powers.”
READ: Amid US-China tensions, ‘not easy’ for ASEAN to stand together; must find common ground: PM Lee
Mr Lee said the ASEAN members want the tensions to be resolved in a way that enables global and regional economic cooperation to take place.
“They want to pursue multilateral avenues, including working at the WTO (World Trade Organization), and that’s one of the reasons why they’re putting such emphasis on the RCEP, because it’s one of the avenues of cooperation which can help us in a situation when the global economy is in troubled waters,” he added.
VIETNAM AND CAMBODIA
On the bilateral front, Mr Lee said he had asked to meet Vietnam Prime Minister Nguyen Xuan Phuc on the sidelines of the summit on Saturday following “some issues in our bilateral relationship recently”.
In a Facebook post on May 31, Mr Lee expressed his condolences on the death of former Thai premier General Prem Tinsulanonda, noting that his leadership had coincided with ASEAN coming together to oppose “Vietnam's invasion of Cambodia” in 1978.
READ: Singapore ‘highly values’ relations with Cambodia and Vietnam: MFA after PM Lee's remarks on 1978 invasion
Vietnam and Cambodia expressed concerns about this, prompting Singapore’s Ministry of Foreign Affairs to say it “highly values” its relations with both nations and that references to that part of Indochina’s history were not new.
Vietnam news portal VGP News reported on Sunday that Mr Phuc again expressed his dissatisfaction with Mr Lee’s comments during their bilateral meeting, noting that they had “deeply hurt” the people of Vietnam.
“I stated my position and explained why I had spoken about the period of the Cambodian war and Singapore's perspective on the matter. He explained forthrightly Vietnam's position on this matter,” Mr Lee said.
“Naturally, the two positions are different and we do not expect to change their minds, and they do not expect us to change our minds on this matter.”
However, Mr Lee said both of them have moved beyond the issue “to become friends and partners” both bilaterally and within ASEAN, with a “big stake” in developing that relationship and moving forward.
“The best way to move forward, in our view, is on the basis of candour and honesty about what has happened in the past, so that we can develop trust and we can work more closely together and trust one another,” he added.
Mr Lee also met Cambodia's Prime Minister Hun Sen on Sunday, saying that the message with him was “similar”.
“It is helpful for us to understand where each other stands, rather than to gloss over and pretend that there is no issue whatsoever,” he stated.
ENVIRONMENTAL CHALLENGES
Moving on to environmental challenges, Mr Lee said beyond tackling marine waste, ASEAN members were also discussing how to address the issue of developed nations sending their rubbish to less developed counterparts in Southeast Asia.
READ: Singapore welcomes ASEAN declaration on tackling marine waste: PM Lee
On May 31, the Philippines shipped tonnes of rubbish back to Canada after it had received dozens of containers from a Canadian firm in 2013 and 2014 incorrectly labelled as recyclables.
Malaysia has also announced it was shipping 450 tonnes of imported plastic waste back to their sources, including Australia, Bangladesh, Canada, China, Japan, Saudi Arabia and the United States.
These moves come after huge quantities of plastic waste were redirected to Southeast Asia following China’s decision to close its doors to foreign rubbish last year in an effort to clean up its environment.
Mr Lee said ASEAN members were concerned with this exporting of waste, and were trying to come up with a common approach to the issue.
“I think it’s a problem for quite a number of countries, both practically handling this stuff and certainly politically,” he added. “To be seen as a place where rich countries dump their garbage, I think it’s not politically wearable.”
23 Jun 2019 06:00PM
Asia
Prime Minister Lee Hsien Loong wrapping up the 34th ASEAN Summit on Jun 23, 2019. (Photo: Aqil Haziq Mahmud)
(Updated: 23 Jun 2019 06:00PM)
Bookmark
BANGKOK: Singapore “must expect some fallout” from the trade dispute between the US and China, Prime Minister Lee Hsien Loong said on Sunday (Jun 23), noting that the way forward is to focus on upgrading the workforce and restructuring the economy.
“You can already see our economy slowing this year,” Mr Lee told reporters on the sidelines of the 34th Association of Southeast Asian Nations (ASEAN) Summit, nothing that growth forecasts have dropped from 3.1 per cent in 2018 to between 1.5 and 2.5 per cent in 2019.
“And you can see that our exports have been affected and factories are seeing their orders down, and the mood is significantly dampened.”
According to surveys, potential risks to the economy include escalating global trade protectionism, a slowdown in China and a global economic downturn.
READ: Singapore’s 2019 growth forecast cut to 2.1%, trade remains top risk: MAS survey
But Mr Lee said it was not possible to “just step on the gas and speed up and make up for a less favourable external environment”.
“What we can do is to keep on focusing on upgrading and training, and restructuring of the economy so that we have the productive capability and potential to pick up again when external conditions improve, and to make the best of the conditions as they are now,” he said.
“That's what we are doing in Singapore and I think that's what the other economies would like to do too.”
WRAPPING UP THE ASEAN SUMMIT
In a wide-ranging interview wrapping up the summit, Mr Lee also touched on the difficulties ASEAN members face in concluding the Regional Comprehensive Economic Partnership (RCEP) and the South China Sea Code of Conduct (COC).
For the RCEP, Mr Lee said it was a matter of getting the bigger economies on board, especially as they have their own considerations. As for the COC, he said its rules and scope are contentious issues that would be difficult to work out.
Mr Lee also touched on a divide within ASEAN due to strategic differences amid US-China tensions, pointing out that members wanted to avoid becoming collateral damage and instead pursue economic integration.
Prime Minister Lee Hsien Loong addressing reporters after the 34th ASEAN Summit on Jun 23, 2019. (Photo: Aqil Haziq Mahmud)
The prime minister then elaborated on his bilateral meetings at the summit with the Vietnamese and Cambodian prime ministers, after his mention of Vietnam’s 1978 invasion of Cambodia drew the ire of both nations.
Mr Lee clarified that while both parties did not expect to change each other’s opinions on the issue, they agreed to move forward and continue developing their relationships.
Mr Lee rounded off by detailing how ASEAN would continue to tackle other environmental challenges after it adopted a declaration on combating marine waste on Saturday.
On the issue of developed countries in the West exporting unwanted rubbish to less developed nations like Malaysia and the Philippines, Mr Lee revealed that ASEAN members were trying to come up with a common approach to overcome the issue.
REGIONAL TRADE PACT AND SOUTH CHINA SEA CODE
On the RCEP, Mr Lee said that while the degree of consensus among the 10 ASEAN members was “quite high”, bigger partner countries like India, Australia and New Zealand still had to “work out with one another what the deal is”.
“Some of these big economies who are partners in RCEP have not quite reached that point yet, partly because of domestic political timings,” Mr Lee explained.
READ: Southeast Asian leaders throw weight behind China-led trade pact
When inked, the pact – involving ASEAN, China, Japan, South Korea, India, Australia and New Zealand – will form the world’s largest trading bloc, making up a third of the global gross domestic product.
“We would like to push it forward as much as possible, and if at all possible, to have substantial completion of the deal this year,” Mr Lee said.
As for the COC in the South China Sea, Mr Lee noted that while ASEAN nations and China are “proceeding with all seriousness and dispatch” to try and complete it in three years, “we also have to watch the content” of the code.
READ: Southeast Asia making good progress on South China Sea conduct code: Thailand
China says it owns most of the strategic waterway – a claim other states dispute – and has been aggressively building and militarising artificial islands as well as confronting ships that enter the zone, actions that give urgency to ASEAN's efforts to negotiate on the area.
“There are some issues in the COC which are going to be very difficult to work out,” said Mr Lee, noting that “contentious” issues include the code’s rules and scope.
“I don't think we can compromise on the content in order to say the deadline is here, let's just make a deal … We have to make sure that we preserve our vital interests. And I think the vital interests will not be easy to reconcile.”
ASEAN DIVIDE
As US-China frictions in the South China Sea spill into areas like trade and technology, Mr Lee said ASEAN members were strategically pulled in different directions, noting that they had ties with both countries and were not about to take sides.
“The divide is a serious issue,” Mr Lee said, adding that ASEAN nations would be negatively impacted if US-China ties turn sour.
“I think there’s a high degree of recognition of that, and a great desire that third countries not become collateral damage if there is friction or worse between the big powers.”
READ: Amid US-China tensions, ‘not easy’ for ASEAN to stand together; must find common ground: PM Lee
Mr Lee said the ASEAN members want the tensions to be resolved in a way that enables global and regional economic cooperation to take place.
“They want to pursue multilateral avenues, including working at the WTO (World Trade Organization), and that’s one of the reasons why they’re putting such emphasis on the RCEP, because it’s one of the avenues of cooperation which can help us in a situation when the global economy is in troubled waters,” he added.
VIETNAM AND CAMBODIA
On the bilateral front, Mr Lee said he had asked to meet Vietnam Prime Minister Nguyen Xuan Phuc on the sidelines of the summit on Saturday following “some issues in our bilateral relationship recently”.
In a Facebook post on May 31, Mr Lee expressed his condolences on the death of former Thai premier General Prem Tinsulanonda, noting that his leadership had coincided with ASEAN coming together to oppose “Vietnam's invasion of Cambodia” in 1978.
READ: Singapore ‘highly values’ relations with Cambodia and Vietnam: MFA after PM Lee's remarks on 1978 invasion
Vietnam and Cambodia expressed concerns about this, prompting Singapore’s Ministry of Foreign Affairs to say it “highly values” its relations with both nations and that references to that part of Indochina’s history were not new.
Vietnam news portal VGP News reported on Sunday that Mr Phuc again expressed his dissatisfaction with Mr Lee’s comments during their bilateral meeting, noting that they had “deeply hurt” the people of Vietnam.
“I stated my position and explained why I had spoken about the period of the Cambodian war and Singapore's perspective on the matter. He explained forthrightly Vietnam's position on this matter,” Mr Lee said.
“Naturally, the two positions are different and we do not expect to change their minds, and they do not expect us to change our minds on this matter.”
However, Mr Lee said both of them have moved beyond the issue “to become friends and partners” both bilaterally and within ASEAN, with a “big stake” in developing that relationship and moving forward.
“The best way to move forward, in our view, is on the basis of candour and honesty about what has happened in the past, so that we can develop trust and we can work more closely together and trust one another,” he added.
Mr Lee also met Cambodia's Prime Minister Hun Sen on Sunday, saying that the message with him was “similar”.
“It is helpful for us to understand where each other stands, rather than to gloss over and pretend that there is no issue whatsoever,” he stated.
ENVIRONMENTAL CHALLENGES
Moving on to environmental challenges, Mr Lee said beyond tackling marine waste, ASEAN members were also discussing how to address the issue of developed nations sending their rubbish to less developed counterparts in Southeast Asia.
READ: Singapore welcomes ASEAN declaration on tackling marine waste: PM Lee
On May 31, the Philippines shipped tonnes of rubbish back to Canada after it had received dozens of containers from a Canadian firm in 2013 and 2014 incorrectly labelled as recyclables.
Malaysia has also announced it was shipping 450 tonnes of imported plastic waste back to their sources, including Australia, Bangladesh, Canada, China, Japan, Saudi Arabia and the United States.
These moves come after huge quantities of plastic waste were redirected to Southeast Asia following China’s decision to close its doors to foreign rubbish last year in an effort to clean up its environment.
Mr Lee said ASEAN members were concerned with this exporting of waste, and were trying to come up with a common approach to the issue.
“I think it’s a problem for quite a number of countries, both practically handling this stuff and certainly politically,” he added. “To be seen as a place where rich countries dump their garbage, I think it’s not politically wearable.”
