SINGAPORE (Feb 14): Singapore warned about greater economic nationalism and protectionism around the world, especially as tensions between the US and China heat up.

“Great power contestation has intensified, most notably between the US and China,” Finance Minister Lawrence Wong said on Tuesday (Feb 14) during an annual budget speech. “We must expect to see greater contestation and fragmentation in the global economy.”

Wong’s speech underscores the growing unease in the international trade hub that has enjoyed the benefits of globalisation, but is now seeing rising risks to its fortune as US-China rivalries gather pace. Wong said governments are rolling out more tax breaks and subsidies for key industries, while major countries are using sanctions, investment bans and export controls to safeguard national security.

“An era of zero-sum thinking has begun,” said Wong, who is poised to take over current Prime Minister Lee Hsien Loong when Lee steps down. “It will be a world that is less hospitable to small economies like Singapore, which have long thrived on an open, rules-based multilaternal system.”

The minister said there is a huge contest for leadership in key technologies, which is likely to escalate with time, citing the US ban on high-end chips to China, and China’s push for self-reliance.