SINGAPORE (July 4): Unresolved tensions between the US and China today can be likened to the great rivalry between the ancient Greek cities of Athens and Sparta, according to DBS Group Holdings CEO Piyush Gupta.
Speaking at the 2H2019 Outlook DBS Private Bank Luncheon organised for the bank’s affluent clients on Thursday, Gupta says Greek historian Thucydides recorded how Athens grew in political and economic strength, which eventually led it to “clash” with neighbouring Sparta.
“The fact that we now have a rising China – what does it mean for the future going forward?” Gupta says.
Today’s battle, however, will not be waged with swords and spears over land and sea. Rather, it will be through trade restrictions and the control of technology – in a tussle for global power.
“The stark realisation is that the future of the world will be in the hands of those who can control technology,” says Gupta. “And therefore to me, there is a massive battle for superiority in 5G, Internet of Things [and] robotics. And many of these things, China is getting ahead.”
This has implications for many economies around the world, he warns.
At the same time, the rivalry between the US and China can be viewed through the lens of political ideology.
In the past, many in the West had presumed that China would embark on a “gradual but steady” transition into a liberal and democratic country, Gupta says. But that perception has changed today.
“I think it has suddenly dawned on a lot of people in the West that that is not likely to happen. China is practically competing [against the capitalist model],” he says. “[China] may have a capitalist market, but it is still a communist-socialist state and they are not likely to give it up.”
Gupta cautions that all of these may lead to further tensions ahead. “I think there is a genuine tussle going on right now: What is the future of societies? Is it a democratic future or not?”
He stresses that these tensions are long term issues that cannot be solved within a short period of time or through the inking of a trade deal.
Ultimately, if the situation deteriorates further, countries may find themselves forced to pick sides.
This would become a problem for trade dependent and open economies like Singapore, which has flourished on the back of globalisation.
“When China does well, we do well. When US does well, we do well,” says Gupta. “But if it comes down to choosing sides, that will be a big problem. I think it will be a fundamental problem for many people to think about.”