The golden age of globalization has ended: Singapore’s Lawrence Wong

“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,” mentioned Singapore’s Deputy Prime Minister and Minister for Finance Lawrence Wong.

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The golden age of globalization has ended and a elementary change to the best way the world works is underway, mentioned Singapore’s Deputy Prime Minister and Minister for Finance Lawrence Wong.

Though nations haven’t absolutely retreated into protectionism, companies are more and more influenced by geopolitical tensions, Wong mentioned throughout a dialogue on the Forbes Global CEO Conference in Singapore on Monday evening, referring particularly to strained relations between the U.S. and China.

Wong mentioned, nonetheless, that Singapore and the remaining of ASEAN desire a balanced relationship with each the U.S. and China and like that the 2 nations have interaction with the area “on its own merits” slightly than by 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 mentioned.

“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 these developments are normalized, the world will change into extra harmful and fractured, he mentioned.

U.S.-China tensions and enterprise

Singapore will proceed to work with each the U.S. and China with out taking sides, Wong mentioned, including {that a} possible assembly between the leaders of the 2 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 mentioned.

He warned of the results that such a relationship may have on the perceptions of youthful generations within 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.”

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Business leaders collaborating within the discussions on the convention agree that the widening rift between the U.S. and China is not good for enterprise.

“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 administration firm, mentioned throughout a panel on the convention.

“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 optimistic engagement doesn’t suggest there will not be “rigorous competition” between the 2 nations, working collectively shall be helpful, particularly in terms of points akin to local weather change and pandemic responses, Wong mentioned.

The United States and China have benefited from being financially intertwined, founding chairman of Avanda Investment Management former chief funding officer at Singapore’s GIC, Ng Kok Song, mentioned throughout a panel on the convention.

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Ng mentioned research confirmed many S&P 500 American corporations have benefited from the expansion of China in phrases of each income and dimension.

Likewise, the Chinese have welcomed worldwide capital and monetary establishments into their market, John Studzinski, vice chair and managing director at American funding administration agency Pimco, mentioned on the similar panel.

When requested for a timeline for his succession as Singapore’s new prime minister, Wong did not give a selected reply, cautioning there are extra urgent points at hand, such because the excessive value of residing, a attainable financial slowdown subsequent yr, and the menace of new mutations from the Covid pandemic.

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