Interview: Engagement, not decoupling, remains way forward for global economic harmony, says Singaporean scholar

SINGAPORE, Aug. 18 (Xinhua) -- Engagement, not decoupling, will remain the way forward for global economic harmony as China constitutes key nodes in the world's supply chains and innovation networks, a Singaporean scholar has said.

Decoupling or isolating countries or regions demerits globalization, leading to a losing proposition that benefits no country, Lawrence Loh, director of the Center for Governance and Sustainability at the National University of Singapore, told Xinhua in an interview.

"We should remain steadfast in the economic rationale of globalization," Loh said, noting that globalization helps promote the mobility of resources and outputs, bringing in efficiency gains for countries.

The organization of supply chains must not be distracted by political motivations, which do not benefit markets and businesses, the expert said.

Globalization, however, has to be managed so that it does not lead to inequality and inequity in wealth distribution, he pointed out, calling for countries to take policy initiatives to balance the undue impact of globalization, such as through the sharing of prosperity and alleviation of poverty.

Referring to some western media reports that foreign investors are pulling investment out of China and looking for alternative options in the region due to geopolitical reasons, Loh said the regional economic ecosystems in Asia are "highly intertwined" and interdependent.

Free trade agreements like the Regional Comprehensive Economic Partnership agreement, the world's largest trade deal so far, will continue to benefit countries as free flows of goods and services bring efficiencies and gains, according to the scholar.

He expected free trade to be an effective control mechanism for inflation, especially for import-dependent countries with high inflations.

Having gone beyond just a world factory, China is now a robust powerhouse in technological innovation, Loh said.

While China continues to provide technologies and high-tech products, Singapore can maintain its own competitiveness in fields such as financial and professional services, he added.