Managed well, US and China rivalry can help the world: President Tharman

Competition between the United States and China should not be seen as a threat to be eliminated but an opportunity to be managed, said Singapore's President Tharman Shanmugaratnam on Oct 15.

- Kok Yufeng Correspondent

If they are well-handled, interactions between the two superpowers can lead to prosperity for both nations and help the world to solve common problems, he said during a lecture at the International Monetary Fund (IMF) headquarters in Washington.

"The stakes are high. If we manage this well, the US-China edge will be a source of prosperity for both nations - and the world's greatest engine of innovation," said Mr Tharman.

"If we fail, and progressively decouple the two systems, we face growing danger, and no winners," he warned, in reference to the different economic systems of the US and China, the former a market-driven system and the latter a state-guided economy.

"The US and China will have to manage their relationship differently, for that will be central to how we avoid a multipolar world becoming a more polarised and dangerous world," he added, noting that the fault line between the countries is widening, with a growing intersection between national security and economics.

Mr Tharman's remarks come at a time when there is an escalating tit-for-tat trade war between Beijing and Washington.

Using an ecological metaphor, he said the interface between the US and China has been, and can be, greatly productive, similar to how hybrids flourish and new life forms emerge where two different ecosystems meet.

He noted that while the US may be able to delay China's catch-up in key technologies like high-end chips, it will be difficult for Washington to prevent Beijing from advancing.

The question is whether China maintains interdependence with the US, Europe and other major technology players as it advances, or if it does so through a strategy of self-reliance.

But Mr Tharman cautioned that both outcomes come with risks, as interdependence will have to be actively managed by both sides to prevent the weaponisation of key technologies or materials, while a decoupling will result in a more profoundly dangerous world.