Chan Heng Chee has been Singapore’s ambassador to the United States for 16 years and is now its ambassador in general. He has actively worked to mitigate the impact of escalating tensions between the US and China on their home country and the Association of Southeast Asian Nations (ASEAN). From the stage at Swell, she offered her to understand the state of this relationship today and how it could develop in the future and what it means for innovations like blockchain.
A policy of technology containment
Basically, it is difficult for one great superpower to understand another. Fundamental cultural differences can lead to misunderstandings and misperceptions of each country’s ambitions and intentions, and spark a repetitive cycle of opposition with a huge impact on the world around them.
Recently, these cycles have continued to accelerate, introducing a policy she referred to as technology containment. The most visible implementation of this policy has been the US blacklisting Huawei and pressure on partner countries to do the same. This approach threatens to seduce many other Chinese and Asian companies, potentially excluding them from US partners and capital markets.
This is also a factor in China’s experiments with blockchain as a possible way to bypass the US dollar as a reserve currency. This wouldn’t be a true decentralized currency as China wants to maintain some level of control and avoid anonymity, but it would be functional in that it could allow direct settlement between countries for trade or transaction purposes without relying on the dollar.
Fortunately, the ambassador said the US Treasury Department had been working behind the scenes to clarify the situation and ease pressure not to completely undermine US industry and the stock market. The semiconductor industry, universities and others have also seen significant setbacks.
Without this temperature control or effective guard rails, she fears that an expanded containment policy could undo decades of technical cooperation and optimization of the supply chain. To clarify her point of view, she paraphrased MIT President L. Rafael Reif: “If our response to China’s ambitions is to double-lock the doors, we would have locked ourselves in mediocrity.”
Avoiding a new cold war
If protective measures prove unsuccessful or relations deteriorate again, it could lead to a worst-case scenario in which the US and China actually enter into a new Cold War. However, the ambassador was quick to point out that this is an extreme scenario and highly unlikely. At least not a cold war like we have seen in the past with other communist nations.
She believes a real Cold War is unlikely because global realities make it difficult to line up the factions required for this kind of stalemate. She also wonders if the Trump administration has the discipline necessary to implement a Cold War strategy that would be undermined by the recent peace offerings against North Korea and Russia.
Competitive coexistence on the global stage
Instead, she hopes that US-China relations will evolve into a third, more ideal, competitive coexistence scenario that will allow the two vast systems to coexist despite their inherent differences. In this scenario, they could actively compete against each other, but not attempt to completely defeat or eliminate the other.
The ambassador says this idyll is what most ASEAN countries want because although some like Vietnam and Cambodia are now benefiting from the trade war due to supply chain diversion, the long-term effects of a deteriorating US-China relationship would play a role in Pall across the entire region.
According to Ambassador Chan, the mantra is “not an option” for many ASEAN countries. She has heard that even strong American allies like Australia loudly reject the binary narrative of having to choose a preferred partner.
These countries are more concerned about their own welfare and that of the AESEAN region and are actively changing trade or political preferences depending on the circumstances and benefits. For example, some continue to work with Huawei while others consider using Nokia or Ericsson at its core, while Huawei moves to the periphery. Others make one-off decisions about joining trade pacts like the Trans-Pacific Partnership or initiatives like Belt and Road.
Regardless of whether individual nations agree on short-term decisions, the ambassador believes that they are all geared towards creating long-term prosperity for the entire region and would actively advocate a scenario of competitive coexistence.
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