BUSINESSES and investors will still look at Asia even if tensions
between the US and China escalate into a full-blown trade war,
according to Singapore's Economic Development Board (EDB).

In an interview with Bloomberg Television, the chairman of the EDB Beh
Swan Gin said: "Singapore is very fortunate, Asian countries in
general are very fortunate because we are in the middle of a growth
engine.

"Asia is somewhat insulated from this - not totally of course - but it
can provide upside that can mitigate some of the downside if indeed
there is a major dispute between the US and China," he said.

The city state is taking stock and planning for the worst after the
world's two biggest economies exchanged blows with US President Donald
Trump promising tariffs on US$50 billion of Chinese imports on top of
steel and aluminum duties. China responded with penalties on $3
billion of US imports.

The two sides are now engaged in negotiations that Mr Beh said could
create a "much more level playing field across the world." He said
it's still too early to say whether the dispute will result in a trade
war and businesses that he's spoken to, as part of the EDB's role to
attract more investment to Singapore, are adopting a "wait-and-see"
approach.

For Singapore, a deterioration in those talks could imperil an already
more tempered growth path for 2018 after strong global trade last year
propelled the economy to its fastest pace of expansion since 2013.

The city state is dependent on trade, amounting to 212 per cent of its
gross domestic product as of 2016, according to World Bank data. That
compares with a world average of 42 per cent. China is Singapore's top
goods trading partner, with a 14.2 per cent share, while the US is the
fourth-biggest at 8.3 per cent.

Mr Beh sees reasons around the region to remain upbeat: growing demand
in China, Southeast Asia and in India. Japan, Australia and New
Zealand remain solidly pro-trade, he said, helping to accelerate
regional trade deals such as the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership that was signed March 8.

While the US and China do battle on the trade field, Singapore is
seeing a gradual broadening out of manufacturing gains it enjoyed in
2017. And while certain areas of Singapore's economy might see tougher
competition overseas, that's more a long-term story of globalisation
than a response to trade-war tension, Mr Beh said.

He identified the pharmaceutical industry as one area where new
investments might crop up on American shores rather than in Singapore,
particularly given recent US tax policy changes that enhance
competitiveness.

"Many companies are now digesting the tax changes in the US and
re-looking at how they may or may not want to change their supply
chains around the world," Mr Beh said.

But he doesn't see that threatening Asia's long-term attractiveness
for companies, and Singapore's role as a leading base of those
activities.