SINGAPORE, March 11 (The Straits Times/ANN): As tensions between the US and China escalate, globalisation will be reshaped by the competition between these superpowers.

And this could affect global supply chains, which could lead to a fragmented world, said Deputy Prime Minister Lawrence Wong.

In a keynote speech at the 55th Wharton Global Forum held at the Shangri-La Singapore on Saturday, he said what happens over the next few decades will be defined by how the great power rivalry between both countries unfolds.

He expects this geopolitical contest to play out through hard power, as well as economic and technological domains. However, he hoped that history would not repeat itself, with another Cold War, which triggered a nuclear arms race and bloody proxy wars that killed millions of people.

Wong added that the era of unhampered globalisation was over.

He said more multinational enterprises are looking to move production back home or relocate to markets that have a bigger consumer base, where they are less likely to get caught in geostrategic crossfires.

“For now, it’s very hard to imagine a complete reversal of globalisation. But (it) will clearly be reshaped by this strategic competition between the big powers,” said Wong.

Speaking to some 800 alumni, business leaders and government officials, he added: “The patterns of trade will change. Supply chains will be reconfigured because security considerations are now moving to the forefront of commercial decisions.

“Left unchecked, if this trend continues, we will see a more fragmented and dangerous global order.”

He said the lack of trust between the US and China was rooted in incompatible world views.

He cited the common narrative of how China and the East were rising while the US and the West were in decline. He said while the centre of gravity of the global economy was shifting towards Asia, we should not overstate the case.

He highlighted how the US, one of the most vibrant and advanced economies of the world, remains at the forefront of cutting-edge industries such as artificial intelligence (AI) and biotechnology.

He said the development of mRNA technology in the US successfully produced Covid-19 vaccines that helped people get through the pandemic safely. Meanwhile, the US’ advancement in the AI field has upended notions of what the technology is capable of.

“Part of the reason for all of this is America’s openness to new ideas and its attractiveness to talent from around the world. This is supported by world-class research centres and universities, like Wharton and the University of Pennsylvania.”

In a world more divided than ever, Wong said there is a need to seek common ground to solve collective problems.

New working arrangements and international collaboration are necessary for global stability and to tackle issues that affect everyone such as climate change and being prepared for future pandemics.

Multilateral institutions such as the International Monetary Fund and World Health Organisation must also remain strong and relevant so that all countries have a stake in the international system, he added.

Wong said Singapore would do its part to advance these goals but is realistic about what we can or cannot do.

He said: “After all, we are really one of the smallest countries in Asia. We know that we have to adapt to the world as it is, not what we would like it to be.”

If not, he cautioned that Singapore might go the way of another Singapore – a namesake American village in Michigan that is now a ghost town.

Founded in the late 1830s, it was once a thriving lumber port town that attracted boat traffic from Lake Michigan, and drew immigrants from the rest of the US, Canada and Europe.

Wong said it was reportedly named after Singapore as its founders hoped to emulate the fortunes of the island in Southeast Asia that was making waves for its bustling port.

He said Singapore in Michigan had some good years. With its abundance of white pine trees, it became a lumber and shipbuilding hub for 50 years.

But the lumber trade went into decline, the sawmills moved and its residents left. There was also massive deforestation. Eventually, that Singapore was buried by the shifting sands from Lake Michigan.

Wong, who is an alumnus of the University of Michigan, said Singapore in Southeast Asia is determined not to meet the same fate.

“Singapore today may be in a stronger position than when we started out as an independent country in 1965. But we will always be that little red dot in the world, an improbable nation that was really never meant to be.

“And in this era of change, really, one can never take things for granted.”

To thrive and prosper, Singapore will do its best to stay relevant and add value as a key node in the global network as a hub for trade, finance, talent and ideas, he said.

“We will continue to build a vast network of friends to promote peace and stability in our region, and most of all, to preserve our sovereignty and right to determine our own future.”

One way would be to host events like the forum, he said, which was last held in Singapore in 2005.

Wong said: “It reflects the role that Singapore can play in this changing world as a convenor, a connector and a facilitator. Ultimately, (this is) a place where we can imagine new possibilities, where we can make things happen and where the human spirit will always thrive.” – The Straits Times/ANN