US-China tensions will affect S'pore, but slowdown not hitting jobs yet: PM Lee

GROWING tensions between the United States and China have an impact on both Singapore's foreign relations and economic growth, Prime Minister Lee Hsien Loong said in his Chinese speech during Sunday night's National Day Rally. But although Singapore's growth has slowed this year, it has not significantly affected jobs so far, he added.

Reflecting on the history of Singapore and its Chinese community, as well as that of Malay and Indian Singaporeans, Mr Lee noted that despite the links to their respective motherlands, the different communities developed a Singaporean identity together. Singapore may be a Chinese majority country, but it has its own history and culture, as well as its own perspectives on current affairs, he said.

Regarding the US-China tensions, Singapore is good friends with both China and the US, and wants to remain so, he said. In dealing with the two, Singapore "must be principled in our approach, and not swayed by emotion".

"When we can agree with either country, we will do so. When we cannot, we must maintain and explain our stand," he said. "We hope that other countries understand that Singapore is a multiracial and independent country, with its own position on issues."

Apart from external relations, US-China tensions also affect the world economy, said Mr Lee. If US-China relations continue to worsen, Singapore firms that export extensively to China will be hit, as will those that have factories in China and export to the US. Some may think that companies deciding not to manufacture in China will come to Singapore instead, but this is not the case, he added.

With the weakening of global demand and trade, Singapore’s growth this year has slowed significantly, he noted. A temporary slump in electronics has also hit overall performance, and retail remains under pressure from e-commerce.

But other sectors have not been affected for now, and retrenchment and unemployment rates remain low, said Mr Lee. Labour union leaders told him that while workers are worried, the slowdown has not significantly affected jobs so far.

"Therefore, the current situation does not warrant immediate stimulus measures. But if the situation gets worse, of course we will promptly respond with appropriate interventions to sustain the livelihoods of our workers," he assured the audience, adding that the government and union leaders are watching economic trends closely and are prepared.