Singapore’s prime minister is worried the U.S.’s geopolitics-driven shift to domestic manufacturing is going to hurt the Southeast Asian country’s trade-reliant economy.
“People used to say ‘invented in California; made in China’,” Prime Minister Lawrence Wong said Sunday at the National Day Rally, his first since taking office in May.
For decades, the U.S. tech sector has been tightly connected with Chinese manufacturing. U.S.-based engineers and designers create new products, which Chinese factories make at scale. It’s a relationship highlighted on devices like Apple’s iPhone, which famously declares that the smartphone was “designed by Apple in California; assembled in China.”
But that close relationship is unraveling after years of worsening tensions between Washington and Beijing.
“Now the slogan is: ‘Invented in California, made in the USA,” Wong said Sunday.
Singapore’s prime minister warned in Sunday's address that U.S.-China tensions will make it harder for a trade-reliant economy like Singapore to keep growing. Developed economies will now try to reshape supply chains in their favor after decades of outsourcing manufacturing to cheaper locations in Asia.
Even China will try to become technologically self-sufficient in order to dominate future industries, Wong said.
China has offered subsidies to grow companies in sectors like solar panels, electric vehicles, and semiconductors.
Washington’s attitude towards China is “hardening,” while Beijing is “convinced that America is seeking to contain it and suppress its rise,” the prime minister explained.
In the wake of the COVID pandemic, the U.S. has pushed companies to shift their supply chains away from China. The Biden administration has offered subsidies to encourage companies to set up manufacturing in the U.S., and exclude manufacturing facilities established in China.
Wong said Singapore needed to work even harder to stay competitive in a “different environment,” by investing heavily in research and development and new infrastructure to make the Southeast Asian city an attractive place for companies to invest.
What policies did Singapore's Prime Minister propose?
The National Day Rally is a speech meant to inform Singaporeans on current and future policy, similar to the U.S. President’s State of the Union address. The speech is traditionally held 1-2 weeks after Singapore’s National Day on Aug. 9, and is one of the country's most important political speeches of the year.
On Sunday, Wong outlined several new domestic policy initiatives targeting unemployment and the country's falling fertility rate.
He pledged to introduce a new scheme that will provide a maximum of 6,000 Singapore dollars ($4580) over a period of up to six months to recently unemployed Singaporeans that were actively seeking employment.
Singapore has long been wary of unemployment insurance over fears that it could result in a welfare state where an unemployed person finds it more attractive to stay unemployed than to seek reemployment.
“We will have your back, we will stand by you; but you too must take responsibility for your actions, and make an effort to pull yourself up,” Wong said on Sunday.
Wong also promised to grant new fathers four weeks of mandatory paid paternity leave, and an additional 10 extra weeks of paid parental leave to be shared between parents. New mothers are currently entitled to 16 weeks of maternity leave.
Like many developed Asian economies, Singapore’s fertility rate is dropping, from 1.27 in 2003 to a historic low of 0.97 in 2023. The government has tried to offer financial incentives to encourage people to start families since 2001, with little success.
Wong became Singapore’s prime minister on May 15, replacing Lee Hsien Loong who served for 20 years.
Lee previously said stepping down ahead of national elections would give his successor the space to “lead the party into the campaign, win his own mandate, and take the country forward with the full backing of the nation.”
Singapore must call a general election by November 2025.
