The widening rift between the world’s two biggest economies, the US and China, now looks in some regards to be irreconcilable, according to Singapore Deputy Prime Minister Lawrence Wong.

The geopolitical situation has become more dangerous amid tensions between the two sides with the Taiwan Strait becoming the region’s “most dangerous flashpoint,” Wong said in his speech at the Nikkei Forum 28th Future of Asia in Tokyo. “We are moving closer to the edge,” he said, reflecting a sentiment that has become more prevalent among Asian leaders.

“Some of the strategic and ideological differences between the two countries appear insurmountable, and may well be irreconcilable,” Wong said.

The remarks come after China’s new ambassador to the US said the relationship between the two is facing “serious difficulties and challenges.” Washington has aimed to stabilize ties between the two global competitors after relations were derailed in recent months amid disputes over spying allegations, Taiwan’s sovereignty and US technology export controls.

Singapore for its part is preparing to host one of the region’s most important defense conferences at the start of next month. Chinese officials have so far rebuffed Defense Secretary Lloyd Austin’s request to meet with Defense Minister Li Shangfu on the sidelines of the Shangri-La Dialogue.

The US, China divide has stoked broader economic concerns among governments as companies seek to diversify supply chains in order to avoid being caught in the geopolitical competition. While Wong said it was understandable why they are seeking to de-risk or diversify, it’s hard to see how doing so can be confined to just a few strategic areas without affecting broader economic interactions.

“If de-risking is taken too far, it would prompt reactions and unintended consequences,” he said, “Over time, we will end up with a more fragmented and decoupled global economy.”

Wong, who is also heir-apparent to one day take over the reins from Prime Minister Lee Hsien Loong, reiterated that the timing of Singapore’s political succession is still not decided and could happen either before or after the next general election that is due by 2025.

“We haven’t decided what the options are, but we will eventually make a decision,” he said. “For now, I have many other preoccupations. I have lots of things to do.”

--With assistance from Erica Yokoyama.

Author: Philip J. Heijmans