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Dr. Ganeshan Wignaraja, Executive Director at the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKI), was recently invited to participate in a public panel discussion entitled ‘The Great Decoupling: China, America and the Risk of a New Asian Economic Cold War,’ at the Lee Kuan Yew School of Public Policy in Singapore.
The panel discussion highlighted the interdependence of the US and Chinese economies through the spread of global value chain (GVC) trade, the unique features of China’s state-driven economic model, US policymakers concerns about about Chinese export-led industrialisation, near-term scenarios for the US-China trade relationship and reform of the World Trade Organization (WTO). Dr. Wignaraja said that the timing of the trade war was unfortunate for Asia’s economic development. It coincided with a post-global financial crisis era of a declining role of trade as an engine of Asian economic growth. The silver lining was opportunities in GVCs for latecomers. Rising wages in China, coupled with tariffs on Chinese imports into the US, would hasten the shift of GVCs in labour-intensive activities to economies in South-East Asia and South Asia. GVC latecomers need to adopt coherent strategies—raising productivity, improving openness to FDI and investing in infrastructure—in order to be successful. Dr. Wignaraja concluded that Asian countries should support the strengthening of a rules-based world trading system, anchored on WTO rules and mega-regional trade agreements.
Other panellists included—Dr. Adam Posen, President, Peterson Institute for International Economics (PIIE), Washington, DC; Dr. Alicia Garcia-Herrero, Senior Fellow, Bruegel, Brussels; Mr. Alan Beattie, European Editorial Writer, Financial Times, London; and Prof. Yang Yao, Dean, National School of Development, Peking University and Director, China Center for Economic Research, Beijing. The panel discussion was moderated by Mr. James Crabtree, Associate Professor in Practice, Lee Kuan Yew School of Public Policy, Singapore.
The panel discussion organised by the Lee Kuan Yew School of Public Policy in Singapore, was held on 30 November 2018, and is part of the ‘Asia in the World Economy’ roundtable. The roundtable convened a diverse range of reputed academic experts and other policymakers from both Asia and the West to discuss the role of Asia in the global economy. This year’s theme was “Growth and Inclusion in Asia,” and covered a range of issues including the ongoing US-China trade war, and the future of global and Asian economic development.
For more insights, read Dr. Wignaraja’s article titled ‘Tackling Asia’s new middle-income challenge,’on the East Asia Forum.