Singapore Hit By China-U.S. Trade War But Presses On
Singapore's Prime Minister, Lee Hsien Loong, admitted on Sunday that the blooming city-state is apparently experiencing the brunt of the China-U.S. trade war. On the other hand, he said Singapore should focus on moving forward despite the issues.
According to Channel News Asia, Lee said during a media briefing that economic growth predictions for Singapore dropped to between 1.5 percent and 2.5 percent for this year. Last year, the forecasts stood at 3.1 percent.
The Singaporean PM said Singapore should expect "some fallout" as trade tensions between China and the United States rages on. He added that the Singaporean economy is already started to slow down.
Among the highly affected areas of the economy are exports and manufacturing. Orders are significantly down as trade protectionism in several regions around the world is enhanced and global exports tone down.
Previous forecasts noted that trade is still the area of Singapore's economy that remains at high risk and could largely pull down growth figures this year. The city-state has significant export and import relations with both China and the U.S.
Despite pessimistic forecasts for Singapore's growth in 2019, Lee said the city-state has no choice but to stay strong and step up efforts in upgrading its own sectors. He said this is a way to help curb the negative impact of the trade war.
Lee further explained that restructuring the economy will help the city-state "pick up again when external conditions improve" and called on other countries to adopt the same strategy for achieving growth in the coming years.
Commenting on the trade war between China and the U.S., Lee recommended that the two sides may learn a lesson from the Vietnamese and Cambodian people. He said Vietnam and Cambodia still have issues regarding the 1978 invasion but in terms of trade, the two Asian countries agree to cooperate.
Last week, Singapore's Senior Minister of State for Trade, Industry, and Education, Chee Hong Tat, noted that there is no easy way out of the China-U.S. trade war. He pointed out that it will take not only time but also patience before the two sides earn trust.
Chee said he believes the trade war between the world's largest economies is not just about trade and technology. Instead, he believes it is "ultimately due to a lack of strategic trust between the US and China."
Leaders of ASEAN member nations called on economies to stay strong despite the impact of the trade war. They said during the 34th ASEAN Summit in Bangkok on Sunday that Southeast Asian countries, including Singapore, should unite to accomplish all hampered talks regarding the Regional Comprehensive Economic Partnership (RCEP) deal.
Thai Prime Minister Prayuth Chan-o-cha noted that the RCEP pact will help strengthen economies in the ASEAN region and improve bilateral ties.