US must play ‘long game’ with China, says Singapore’s Tharman Shanmugaratnam, not go for short-term gains, risk worse ties later
- Ahead of Singapore’s presidential election, front runner Tharman Shanmugaratnam sets out how he sees his candidacy in an exclusive interview
- Read on for part one with his thoughts on US ‘economic warfare’, China’s growing capabilities and the experience he would bring to bear if elected
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Zuraidah Ibrahimand Kimberly Lim
Published: 10:06am, 21 Aug, 2023
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Singapore's presidential hopeful Tharman Shanmugaratnam on China-US ties: Why the long game is vital
The United States needs to focus on the “long game” when dealing with China and resist the lure of short-term benefits that could create a more difficult relationship later, says the front runner in Singapore’s coming presidential election, Tharman Shanmugaratnam.An internationally respected former finance minister and central banker, Tharman said he was worried that recent moves by the US against China, such as imposing export controls and investment restrictions, would have far-reaching consequences for the rest of the world. “I think we’re going down the wrong road of de-risking, or whatever term one wants to use.”
Tharman was speaking to This Week in Asia ahead of the September 1 election. Although Singapore’s president is largely a ceremonial head of state with no executive role, the office includes certain blocking powers over the use of the republic’s massive reserves and appointments to top public-sector positions. The president also represents Singapore internationally – a role that Tharman is likely to play more actively than his predecessors if elected.
Tharman Shanmugaratnam and European Central Bank President Christine Lagarde share a light moment at an economic forum. Photo: tharman.sg/Handout
Singapore lost a global statesman with the death of founding prime minister Lee Kuan Yew in 2015. Tharman’s international standing, though incomparable to the late Lee’s, is without peer among Singapore’s current leaders. He was the first Asian person to chair the International Monetary and Financial Committee, the policy advisory committee of the International Monetary Fund. He also chaired the G20 Eminent Persons Group on Global Financial Governance, and the Group of Thirty from 2017 to 2022. He currently co-chairs the Global Commission on the Economics of Water.
Tharman stepped away from his role as a senior minister last month to run for president, a decision widely seen by the public as being backed by Prime Minister Lee Hsien Loong and his cabinet. As the constitution requires the president to be non-partisan, Tharman also resigned from the ruling People’s Action Party.
When he announced his presidential bid, he said he hoped to use his international experience at a time when the world was entering a more difficult era of tensions and polarisation.
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Asked how a slowing Chinese economy would affect the region and Singapore, he noted that China was going through “a very complex set of challenges, partly cyclical, partly structural”.“I keep telling my colleagues internationally, never underestimate the complexity of the challenges that China faces,” he said. “They are more complex than those faced by any other major economy. And even with the best of technocratic abilities, it requires a constant balancing.”
Tharman said he was confident that China had the capabilities to get past the period of slowdown but it “may take some time”.
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Asked about the US’ moves to restrict exports of certain advanced components to China and, more recently, on investments in China as part of a strategy of “de-risking”, Tharman noted that this was “a term that’s more mellifluous than decoupling”. But he said that these actions posed a grave risk over time.
“You have to play a long game,” he said. “China will eventually develop its capabilities. And it will do so on its own as well as through a complex and interdependent global market economy, where there’ll be other players willing to engage with them, including those who are not permanent friends of the US.”
He added that the resulting effect of moving away from China “is a little bit of a mirage”. Chinese exports were being diverted through third countries, “which are now benefiting as new manufacturing centres” before exporting to the US, he said.
“It’s become a more diversified set of supply chains, but China is still there at its core, and rightly so, because it is an extremely competitive global manufacturing and logistics base.”
Most of Asia isn’t going to decide that they will walk away from China, trade and investment wise, most of Asia is not going to make that decisionTharman Shanmugaratnam
Tharman said he hoped the US would take a longer view of its relations with China.
“What long-term relationship does one want between these two major powers, China and the US? Is it a relationship of interdependence with certain, very carefully prescribed, constraints on that interdependence? Or is it a relationship of gradually cascading separation, which isn’t going to stop China from rising eventually, but will lead to a much more antagonistic relationship in the long term?”
He also pointed out that neither the US nor China would be able to demand that other countries join their camps for the long term.
“Most of Asia isn’t going to decide that they will walk away from China, trade and investment-wise, most of Asia is not going to make that decision. So that, too, has to be part of the long-term strategic calculation.”
China’s Xi Jinping and US President Joe Biden meet on the sidelines of a G20 summit in Indonesia last year. Tharman said he feared there was little domestic incentive for the US to roll back its “economic warfare” with China. Photo: AFP
Tharman said he feared that both sides of the Democrat-Republican divide in the US had little domestic incentive to halt, let alone roll back the “escalation of economic warfare” with China.
“So the incentives within democracy, as it’s now evolving in the US, are not conjoined with the longer-term interests of the US very well, nor of global prosperity,” he said.
“It requires a new coalescing of leadership in Congress, besides the administration, to take that long view. It’s not blind faith in free trade and free investment flows. It’s a strategic view as to what’s in the US’ long-term interests, and in the interests of global order, which we all depend on.”
If elected, Tharman said he would draw on his extensive experience and the networks of which he is part, both domestic and international.
“People know me in China, India, in the United States and Europe, and of course, in the region around us,” he said.
“We must always speak with humility, as a small country, but our ability so far to project a Singapore ‘voice of reason’ does not go unnoticed.”
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He said Singapore need not be deterred by its small size from speaking up. “We must always be larger than that, larger through persuasion.”This was not merely about projecting Singapore’s narrow interests, he stressed, but about being a “bridging player in addressing the challenges that we see in the world”.
“My leadership roles in various global fora involve finding ways in which everyone understands the challenges that different parts of the world are going through, particularly in the developing world, and finding a way in which even the major powers know that small countries and mid-sized powers want to play a role in avoiding a fragmentation of the whole system. Those are active roles, which I will continue to play.”
Part 2, tomorrow: Tharman Shanmugaratnam on what kind of president he plans to be
