The golden age of globalization is clearly over, says Singapore's Deputy Prime Minister Lawrence Wong
- The golden age of globalization has ended and a fundamental change to the way the world works is underway, said Singapore's Deputy Prime Minister and Minister for Finance Lawrence Wong.
- Though countries have not fully retreated into protectionism, businesses 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 strained relations between the U.S. and China.
- Wong said, however, that Singapore and the rest of ASEAN want a balanced relationship with both the U.S. and China and prefer that the two countries engage with the region "on its own merits" rather than through the prism of a U.S.-China relationship.
The golden age of globalization has ended and a fundamental change to the way the world works is underway, said Singapore's Deputy Prime Minister and Minister for Finance Lawrence Wong.
Though countries have not fully retreated into protectionism, businesses 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 strained relations between the U.S. and China.
Wong said, however, that Singapore and the rest of ASEAN want a balanced relationship with both the U.S. and China and prefer that the two countries engage with the region "on its own merits" rather than through the prism of a U.S.-China relationship.
"Where previously the logic was, countries do not have to be friends to do business with one another. In fact, the hope was that the more we trade and invest in each other, we will tamp down 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 experienced in the last 30 years since the end of the Cold War has ended clearly and we are entering a new era, a new era that will be marked by greater geopolitical contestation."
If those developments are normalized, the world will become more dangerous and fractured, he said.
U.S.-China tensions and business
Singapore will continue to work with both the U.S. and China without taking sides, Wong said, adding that a probable meeting between the leaders of the two nations is encouraging.
"With that ability to come together to meet in person, there will be an ability to establish a new modus vivendi between the two countries, recognizing that really, the world is big enough for China and the U.S. and the two countries do not have to define their relationship in adversarial terms," Wong said.
He warned of the effects that such a relationship could have on the perceptions of younger generations in the U.S. and China.
"And if there is no ability for the people-to-people connection and communication to happen, it's very easy to portray the other side as the bad guy, we are the good guys. And both sides do that."
"And you have a whole generation of people growing up thinking that way, then what happens 50 years from now, 30 years from now? I think that's something we should be concerned about."
Business leaders taking part in the discussions at the conference agree that the widening rift between the U.S. and China isn't good for business.
"Look at it from the other side of the mirror. China just went through an America 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 generations, many of them idealized America and the American way of life. It is such a shock for the Chinese of this time to be rejected by America and to be subject to racial profiling, there is a lot of disillusion, there is a lot of 'what do we do next'."
Though positive engagement doesn't mean there won't 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, founding chairman of Avanda Investment Management former chief investment officer at Singapore's GIC, Ng Kok Song, said during a panel at the conference.
Ng said studies showed many S&P 500 American companies have benefited from the growth of China in terms of both revenue and size.
Likewise, the Chinese have welcomed international capital and financial institutions into their market, John Studzinski, vice chair and managing director at American investment management firm Pimco, said at the same panel.
When asked for a timeline for his succession as Singapore's new prime minister, Wong didn't give a specific answer, cautioning there are more pressing issues at hand, such as the high cost of living, a possible economic slowdown next year, and the threat of new mutations from the Covid pandemic.