(Bloomberg) -- Singapore will focus on regional trade and digital economic agreements to counter the impact of the U.S.-China trade war that’s weighing on the nation’s growth prospects and prompting some economists to warn of a recession risk.
It’s important that Singapore works on different types of regional arrangements to "find new pathways for growth," S. Iswaran, minister for communications and information, said in an interview with Bloomberg Television on Friday. He referred to pacts such as the Comprehensive and Progressive (NYSE:PGR) Agreement for Trans-Pacific Partnership, or CPTPP, and the EU-Singapore free trade agreement.
One of the biggest challenges facing Singapore now is navigating external geopolitical uncertainties, Iswaran said. As trade disagreements between the U.S. and China morphed over the past year into a full-blown trade war, global growth engines have stalled, the city’s central bank chief said on Thursday.
U.S. President Donald Trump and Chinese President Xi Jinping are scheduled to meet on Saturday at the sidelines of the G-20 summit in Osaka as the leaders try to resolve their trade war.
Trade tensions could turn out to be "an opportunity for Southeast Asia to be the place where China and U.S. can invest and can jointly and participate in growth of this region," Iswaran said.
Singapore is reviewing its 2019 growth projection range of 1.5% to 2.5% amid concern the trade war is spreading, while Maybank Kim Eng Research is warning that Singapore’s economy will probably experience a “shallow technical recession” in the third quarter.
Alarm bells on the island’s growth are ringing at a time when the government is planning to roll-out key 5G technology, which is seen as essential for deployment of key automation technologies such as the internet-of-things applications. Another challenge for Singapore is managing the technological transition within its economy, Iswaran said.
Here are some other comments made by the minister:
- Singapore will have its own security requirements for 5G equipment, and will balance the allocation of limited spectrum with feasible use cases of the technology
- The city-state’s 5G technology will focus more on areas such as port and maritime operations, aviation sector, advanced manufacturing
- Greater scale in the high-speed 5G technology will help in reduction of costs
- Singapore has kept its options open for a third or fourth 5G network
