联合早报
Business China Chairman Lee Yi Shyan. Photo: Wee TY
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The global society, economy, and politics have developed and changed rapidly in the past two decades. Business China Chairman Lee Yi Shyan thinks that Singapore will be able to mobilise the society to deploy and prepare ourselves to capitalise on emerging industries, if the nation understands these evolving factors well. This will help to develop its economy for next two decades.
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The COVID-19 pandemic can be said to be a disaster in the last hundred years and a catastrophe for humankind. Many developing countries have poor medical facilities and are unable to purchase enough vaccines in a short period of time. The pandemic situation at these countries may continue for some time before it stabilizes. In the recent G7 summit, developed countries pledged to donate 1 billion doses of vaccine, this in itself is a good sign of international cooperation.
The sudden emergence of Covid-19 has not only tested the resilience of various governments and societies, but also tested the resilience and effectiveness of international cooperation mechanisms. We also have a fresh understanding of the global economic industrial chain: we have only learned that the transnational industrial chain, which was originally thought to give us peace of mind, could stop operating in an instant. We have also only realised the fragility of transnational industrial chains. We ought to ask: Can these industrial chains continue to operate smoothly in the post-pandemic era? Or are these transnational arrangements no longer the same, and will continue to be interrupted by other (non-pandemic) factors and stalled?
These are the important issues to be discussed in this year’s FutureChina Global Forum.
Overlooking the world trend at a historic turning point
However, in order to explore the world in the post-pandemic era, we must first review some major trends that were already undercurrents before the pandemic outbreak. We will not be able to sail against the current and achieve greater heights if we do not understand these trends well enough. Instead, we will be thrown off course and away from the trajectory.
First, anti-globalisation sentiments. The “America First” ideology advocated by Donald Trump during his four-year administration has won the support of half of American voters. The Brexit of the United Kingdom and the rise of many far-right parties in European countries also demonstrated that these societies are disappointed and tired of the unequal distribution of wealth brought about by globalisation. The international community has continuously set off waves of anti-globalisation. Politicians in many Asian countries have also ride on these waves and adopted nativism, populism, and protectionism to gain political capital. The popularity of new media has also accelerated the spread of false information, xenophobic thoughts and hate speech, leading to division and polarisation within society. These developing trends are worrying and have severely weakened the propensity for international cooperation, giving protectionism, isolationism and hostile thinking a chance to take off once again.
Second, technology development has shifted the center of the world economic gravity. Twenty years ago, under the blow of the Internet bubble, Amazon’s stock fell by 85% within two years, and its survival then was uncertain. At the same period, China was busy dealing with weak exports caused by the Asian Financial Crisis, and on the other hand, it was preoccupied with reforming its state-owned enterprise system, by shutting down excess production capacity, and cutting redundant employees, resulting in more than 13 million laid-offs and unemployed people within a year. Who would have expected that in just two decades, American and Chinese companies will occupy three-quarters of the world’s top 100 companies by market capitalisation? In the top 10, seven companies are all Internet related technology companies from the China and US. These companies were almost insignificant 20 years ago, some were not even in existence yet. Today, they are giants leading the world’s technological trends and economic development.
The development of the technology industry sees a major change every ten years. The internet era was introduced in 2000, and we then witnessed the era of mobile internet in 2010. The era of big data was launched in 2020, where cloud technology allows large, medium and small enterprises to hold powerful computing resources. Mobile internet, Internet of Things and edge computing have replaced the original internet. The application of Artificial Intelligence technology will fundamentally reform many vertical industries, accelerate automation, allocate resources more accurately, improve operational efficiency and reduce production’s dependence on labour. In the era of big data, data is the new power, which brings about another industrial revolution.
The rapid development of the technology industry will certainly bring about many benefits, among them, the biggest benefit should be a society that, is capable at learning, keen on scientific research, possessing strong organisational skills, and has a life-long learning and training mechanism for workers. The US and China will continue to lead the development of the global data industry with their own favourable conditions.
Third, the developing US-China relationship. Within the economic framework of globalisation, these two economies are closely tied together in many transnational industrial chains. One produces what the other designed, or one party manufactures the main device, while the other assembles the components. Both parties jointly produce and sell their products all over the world. Examples of such productions are widespread. Outside of the economic field, the two countries have considerable differences on issues such as political formation, cultural thinking, economic structure, democracy and human rights. In addition, the “China threat theory” is taking form as a public opinion in the US in recent years. The formation of such an opinion is undoubtedly a big nemesis to the political school of thought that originally advocated a more moderate “seeking common ground while reserving differences” and “mutually benefitting” stance.
Of course, it will be a great benefit for others and for China and US themselves, if the US can accept the fact that the China that has risen operates on a completely different system, cooperate on the basis of common interests, and work together to create an atmosphere and system for international cooperation. It is a pity that the US is facing strong and negative social public opinion internally. These pressures may be the biggest stumbling block to the improvement of US-China relations. Although it seems conclusive that the US-China relationship cannot revert to how it was like in the past, topics such as the extent that US-China relations will deteriorate, whether it will lead to a polarised world, whether high-tech industrial chain will be forced to decouple, and whether other countries will be dragged into a “sanction war”, are matters closely watched by the international community.
Promote mutual trust and strengthen collaboration
The three major trends mentioned above will be the main forces shaping the future economy and geopolitics landscape. By understanding the development of these trends well, we will be able to reduce risks and enhance the factors that favours continuous development.
As a neutral, inclusive, peace-loving and stable market and platform, Southeast Asia develops friendly cooperation and collective development with neighbouring countries. In November last year, ASEAN signed the Regional Comprehensive Economic Partnership Agreement (RCEP) with five negotiating countries, namely China, Japan, South Korea, Australia and New Zealand, forming the world’s largest free trade agreement or regional cooperation agreement.
This cooperation agreement covers one-third of the world’s population and 30% of the economic output. Countries are starting to get their respective parliaments to review, and the original start date is January next year. “It sends a very important message to the world, that is, regional cooperation is the best way to achieve collective and peaceful development.”
11 pacific countries signed the “Comprehensive and Progressive Trans-Pacific Partnership Agreement” in March 2018. These 11 countries include Brunei, Malaysia, Vietnam, and Singapore, four Southeast Asian countries, as well as Japan, New Zealand, Australia and other countries.
In total, Singapore has signed 15 bilateral free trade agreements and 11 multilateral free trade agreements. We believe that multilateral cooperation is an important foundation for regional peace, stability and sustainable development.
Friendly neighbours naturally form partnerships
Although the global economy moved in the reverse gear in 2020, ASEAN has surpassed the European Union, the US, and South Korea to become China’s largest trading partner. In the first quarter of 2021, ASEAN’s investment in China increased by 60%, becoming China’s largest trading partner. These data show the continued deepening of economic and trade relations between ASEAN and China. Not only were they not hindered by the pandemic, but they have also demonstrated the resilience of regional integration. This trend will continue to develop due to objective factors.
In the past 40 years, the industrialisation and urbanisation of China and ASEAN have been continuously advancing. Although the rate of development is different, the continuous development of China and ASEAN has produced a new middle class in general. While there may be various overlaps in the industrial structures between China and ASEAN, there are also great differences and complementarities. These factors are favorable conditions for regional investment and trade. This year coincides with the 30th Anniversary of Dialogue Relations between China and ASEAN. The FutureChina Global Forum will also make some prospects for the economic and trade cooperation between ASEAN and China, and explore how the cooperation between the two regions will evolve under the catalysis of the pandemic.
Conclusion
As the global economy recovers gradually, governments of various countries have to face many thorny issues apart from being preoccupied with the deployment of pandemic prevention measures. These issues include public health, debt management, economic restoration, and structural reforms. It will add burden and be difficult for many countries to deal with these problems, should protectionism and unilateralism prevail and that international environment deteriorates further, as such problems are inherently strenuous to deal with. We do not wish to see such a situation. If the pandemic does not subside, it will be difficult for us to live well; if the global economy is sluggish, we cannot prosper, and climate change affects everyone. After all, we are all part of the global ecosystem.
FutureChina Global Forum organised in a hybrid format for the first time
The FutureChina Global Forum is Business China’s flagship programme that provides a high-level and diverse platform for sharing insights into China’s economic and social growth. This picture was taken at the FutureChina Global Forum in 2019. Photo: Business China
FutureChina Global Forum was launched in 2010 by the founder of Business China and the late founding Prime Minister of Singapore, Mr. Lee Kuan Yew. It is an international exchange platform that gathers leaders and experts from various walks of life, including politics, industry, business, academics, and research. The past eleven sessions of the forum have been widely covered by international media, and each session has attracted guests from all over the world.
This year’s forum will discuss the latest developments and future trends in ASEAN and China, for regional enterprises to better grasp the new business opportunities and the new situation of economic recovery after the COVID-19 pandemic. The forum will be held in a hybrid format for the first time from July 12th to 13th.