China’s G2 reality and Hormuz’s new normal

(Edited and refined by James Loo, Grace Chong and Candice Chan with the assistance of AI translation.)

Singapore’s Ambassador-at-Large Chan Heng Chee said a US-China G2 is taking shape, even if Beijing is reluctant to embrace the label. While China rejects the notion that it seeks hegemony like the US, much of the world already regards it as one of two dominant global powers.

Speaking at the eighth Singapore-China Forum, organised by Lianhe Zaobao (LHZB) on 6 June, Chan said during the panel discussion, “The Global Order: Changing Tunes, New Realities”: “Whether you like it or not, China, there is a G2 because that’s how the world looks at you.”

A rising power’s identity

She added that while a US-China G2 has yet to be formally institutionalised, the meeting between the Chinese and US presidents in Beijing in May attracted global attention.

Chan said stable China-US relations would create more room and opportunities for other countries. At the same time, she noted that both the international community and Chinese policymakers themselves are asking what kind of great power China will become. “China does not want to be like the US, but what kind of power should it be? I think China is trying to work that out.”

Speaking on the same panel, Zhao Minghao, deputy director of the Centre for American Studies at Fudan University, said the May meeting between the Chinese and US presidents in Beijing produced a consensus on building a “constructive strategic stability relationship”. This was a positive development, but the challenge lies in the limited domestic support in the US. How to make this consensus operational, institutionalised and sustainable beyond 2028 remains “a very big challenge”.

On the outlook for China-US relations, Zhao said that in the economic sphere, US policy towards China is shifting from strategic decoupling to exploring a “manageable trade” relationship. “This is a very big change.”

However, Zhao noted that significant points of contention remain, including the US review of whether to revoke China's permanent normal trade relations (PNTR) status, its handling of the Section 301 investigation involving China in July, and the possibility of additional tariffs.

Managing tensions over Taiwan

On the Taiwan issue, Zhao said US President Donald Trump made clear after his China visit that he did not want to see “Taiwan independence” and did not believe US forces should travel 9,500 miles (15,289 km) to fight in the Taiwan Strait.

“Against this backdrop, we saw the US side seeking to gain a deeper understanding of Beijing’s position on the Taiwan issue during the Trump-Xi meeting,” Zhao said.

Chinese President Xi Jinping also laid out China’s Taiwan policy in a way that was clearer and more direct than in the past.

“On the Taiwan issue, both sides are now looking to ease tensions and find ways to manage their differences,” Zhao said.

Keeping ASEAN out of great power rivalry

On China-ASEAN relations, Ma Bo, associate professor at Nanjing University’s School of International Studies and assistant director of the Collaborative Innovation Center of South China Sea Studies, said Trump’s second term had seen trade, technology, supply chains and AI computing power brought under the national security framework.

This, he said, had led to the broader securitisation of regional economic issues, threatening China-ASEAN economic, trade and technological cooperation.

Ma said ASEAN needed to develop internal risk management mechanisms.

“Potential threats to regional security should be minimised as far as possible, while cooperation should be given greater priority,” he said. “Southeast Asia should not become a chessboard for great power competition.”

China’s rise and the challenge of competition

The discussion was moderated by LHZB associate editor Han Yong Hong. During the Q&A session, drawing on Chan’s remarks, she asked: What kind of great power will China become? As China grows stronger, is it becoming a competitor to other countries across multiple fronts?

Chan said China was gradually becoming a competitor of all countries in every field. As Chinese exports face increasing barriers in Western markets, ASEAN countries have also come to see Chinese goods as being “dumped” into their markets.

“China should not be surprised if other countries put up protectionist walls because in the end every country wants to protect their own markets,” Chan said. “The thing is, I do not think for the long-term security and prosperity of China that this can carry on.” 

She added that some have suggested China should adjust its export strategy, including considering export taxes on certain industries, to level the playing field.

Zhao responded that China is taking a range of measures to ease competitive tensions, including boosting domestic consumption and, under the leadership of the National Development and Reform Commission, restructuring its industrial base in response to external concerns over China’s industrial overcapacity.

Fees on the Strait of Hormuz could become the new normal

Professor Joseph Chinyong Liow, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore and chairman of the Middle East Institute, said that a new normal is likely to emerge in the Strait of Hormuz following the US-Iran conflict, with countries in the region finding various pretexts to levy charges on vessels passing through the waterway. Meanwhile, he noted that the US has continued to be inconsistent on the issue of such charges.

Having just returned to Singapore from the Middle East, Liow shared his first-hand observations of the region during the panel discussion. Commenting on the current ceasefire between the US and Iran, Liow said: “Very few people in the Middle East believe that the ceasefire will hold for any significant amount of time. It is going to fluctuate between talking and fighting and quite likely both happening at the same time, as we have seen already, and that is going to be the nature of things, and the different actors in the region are going to have to manage that dynamic.”

On the future of the Strait of Hormuz, Liow said: “Now it’s going to be a new normal, right? And that new normal as far as Iran and Oman are concerned is going to involve some kind of fee. They may not call it a toll. They will say that for environmental protection reasons, for administrative reasons, they have to charge a fee. They conjure something.”

Liow noted that regional countries such as Saudi Arabia and the UAE are responding pragmatically — while discussing the future of the Strait of Hormuz with Iran, they are also accelerating efforts to establish alternative energy supply routes, including those via the Red Sea and the Gulf of Oman.

Looking at the Middle East’s long-term regional order, Liow assessed that the US cannot be replaced as a major strategic actor in that region, nor does it want to withdraw entirely from that region. Countries across the Middle East are responding to the evolving situation in different ways. Qatar, Bahrain and Saudi Arabia are talking to Iran, while the UAE — which was targeted the most by Iran — is aligning itself more closely with the US and Israel.

This article was first published in Lianhe Zaobao as “中美G2正在形成中 建设性战略稳定关系或难延续” and “区域国家向过航霍尔木兹船只收费或成新常态”.

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