‘Increasingly difficult and challenging' to partner both US and China: DPM Gan Kim Yong
[SINGAPORE] It is getting increasingly difficult and challenging to work with both the US and China amid rising uncertainty and geopolitical tensions, said Deputy Prime Minister Gan Kim Yong.
Finding ways to do business that will be comfortable for both sides is a key issue that Singapore will have to navigate, said Gan, who is also minister for trade and industry.
'It's not just the US and China – we want to do business with everybody else where it makes sense, and where we can achieve a new outcome,' said Gan at the inaugural wealth edition of UBS' Asian Investment Conference held in Singapore on Thursday (May 22).
His keynote address on Singapore's strategy in a turbulent world was moderated by Young Jin Yee, Singapore country head at UBS and co-head of UBS Asia-Pacific.
Responding to Young's question on Singapore's stance on staying neutral amid geopolitical tensions, Gan said Singapore 'has never been neutral' and has always taken a position.
'The only difference is that we take a position not because you are the US or because you are China; we take a position based on principles and always based on the interests of Singapore,' he said.
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This may upset different parties in different instances, but Gan said this allows Singapore to remain a trusted and reliable partner to do business with in the long term.
'If you try to be neutral and walk the middle road, the road is getting narrower and narrower. Eventually it will be a knife edge and you won't be able to stand up,' he said.
Gan expects the tariff crisis will change the world order, unlike the Covid-19 pandemic, when it was largely business as usual.
This change is not new, however. In the early days of the World Trade Organization, members had a shared vision to work together and create opportunities for everyone, but as time passed, there was increasing focus on domestic needs.
'(US President Donald Trump's) 'Liberation Day' was a very decisive moment in which we realised that the world has changed fundamentally,' Gan said.
This is why the government set up the Singapore Economic Resilience Taskforce – which Gan is chairing – to help businesses and workers navigate uncertainties from US tariffs, he said.
He noted three main objectives of the task force: to make sense of developments and get feedback from businesses; to find ways to respond to the immediate impact; and to position Singapore such that it can seize opportunities post-crisis.
'This is a longer-term plan that will require a lot of work, and we are starting now. We are not waiting for the whole crisis to be over to start,' he said.
For the next 10 years, Gan said manufacturing as a sector will remain key in Singapore's economic growth, although he noted the need to be 'quite selective' given limited resources.
This means a focus on products that are dependent on the global market, such as semiconductors, pharmaceuticals, equipment machinery (and) systems, and aerospace.
For services, growth areas include wealth management, financial services, professional services and trading.
The government will also continue to invest in innovation as it will be key to drive economic development.
But Gan noted that the key to success is for Singapore to remain nimble and not be fixated on a specific direction.
'Once you know that the direction is wrong, you have to be bold enough to make changes and shift your direction when necessary, and do so as quickly as possible,' Gan said.
'This nimbleness will ensure that Singapore will continue to succeed in this ever-changing world.'
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