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Singapore's economy would suffer if relations worsen between the U.S. and China, but the city-state must stay independent in the conflict between its two biggest trading partners, Prime Minister Lee Hsien Loong said Sunday.
“We have our own history and culture, and also our own perspectives and political stands on current affairs,” Lee said in Mandarin during his annual National Day rally speech. “We must always be principled in our approach, and not swayed by emotions.”
Lee described the U.S. as a major security and economic partner for Singapore, encompassing military equipment deals, troop training and investments. Meanwhile, China is Singapore's largest export market and the city-state's population has an ethnic Chinese majority, he noted.
The U.S. has to accommodate an increasingly powerful and influential China, while China as a rising power must take other countries' interests and views into account, Lee said.
Data out Friday showed just how much Singapore's trade-dependent economy is suffering from the trade war, with non-oil domestic exports now expected to contract by as much as 9% this year. Economic growth is expected to come in at 1.0% or less this year, which could be its lowest point since 2009. The economy grew 3.2% last year.
Read More on Singapore Cutting its Growth Outlook
Lee said there's no need yet for economic stimulus, as retrenchment and unemployment rates in Singapore remain low, but the government will “promptly respond” if the situation worsens.
--With assistance from Michelle Jamrisko.
To contact the reporter on this story: Joyce Koh in Singapore at jkoh38@bloomberg.net
To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Michael S. Arnold, Shamim Adam
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