While the face-to-face meeting between US President Joe Biden and Chinese President Xi Jinping at the G20 summit in Bali, Indonesia is “important and constructive", Deputy Prime Minister Lawrence Wong says that “we shouldn't have any illusions that this one meeting has changed things overnight.”
Speaking at the Bloomberg New Economy Forum, he explains that this is because there have been such deep suspicions and distrust built up over so many years between the two sides.
Referring to the saying that “trust is built in drops but lost in buckets,” Wong says that this meeting is the first step in a “long journey” of building trust, and recognises that there are still major differences between both sides.
This meeting is also an opportunity to make sure that neither party takes any actions that will cause the trust that is built to be eroded very quickly.
But trust does not only have to be built between the people at the top, Wong says. More communication channels need to be opened “beyond the person or relationship at the very top.”
Through these channels, more interactions can be fostered, and most importantly, he hopes that guiding principles can be developed, so that both sides understand where the other's red lines are.
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The good thing about the Xi-Biden meeting in Bali, Wong points out, is that the two sides made it very clear they do not want to enter into conflict.
However, “the fundamental differences have not changed”. The US still considers China as its strategic rival, and Wong points out the US position stating that it wants an absolute lead in technology. “It wants to not just have a lead in technology for one or two bounds, but absolutely, as far as a lead as possible."
In September, US national security adviser Jake Sullivan opined that the US had to revisit its view that it only needed to stay ahead of its competitors by “a couple of generations”
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“That is not the strategic environment we are in today,” he added, saying “given the foundational nature of certain technologies, such as advanced logic and memory chips, we must maintain as large of a lead as possible.”
Wong says, “the more America takes action in that direction, the more China will feel, ‘well, you are really just trying to keep me down permanently to contain me.’ And that will elicit a reaction from China.”
While Sullivan was referring to the US’ edge in technology, Wong sees this reaction in more areas, like trade and supply chains.
Diversification does not mean decoupling
He does concede that there are legitimate concerns around security, “but if you carry the arguments too far, then I think there will be many unintended and far-reaching consequences that will make all of us worse off.”
As such, if the US can be very careful about defining its security interests, and limiting these to areas of critical technologies where there are legitimate security interests. “I think there will be more countries that understand America's position and will be prepared to support them.”
Wong adds, “but once it gets more and more far-reaching, I think there will be concern for countries in Southeast Asia.”
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The same goes for dealing with supply chains. For example, in the chip industry, more chipmakers are setting up shop in the Southeast Asian region and moving away from China and Taiwan, and diversification is a good thing, says Wong, especially if there are critical dependencies in essential areas.
But if a complete bifurcation happens and there are two separate ecosystems, where nothing in one ecosystem can be made in another ecosystem, this will mean that countries and companies will be forced to choose sides, and “no one wants to be in that position.”
“Diversification does not mean decoupling,” Wong highlights.
