Paterson kickstarted the event with his keynote lecture, in which he talked about the unexpected outcomes of a Western policy of engagement with China, which led to the country’s accession to the WTO in 2001 without critical economic reforms, such as a floating exchange rate and open capital account.

He also said that Western governments supported China’s accession to the WTO in 2001 primarily for geopolitical reasons and that the West’s strategy of engagement was aimed at economic, and eventually political, change in China. However, Western policy makers did not adequately forecast the economic impact of allowing 750 million low-cost workers into the global economy.

As a result, China’s admission into the WTO helped lift hundreds of millions of people out of poverty in China, cementing the legitimacy of the Chinese Communist party and making China’s mercantilist model attractive to emerging economies in Asia.

Further, Paterson explained how the supply-side shock created by China’s increasing and deflationary exports, coupled with the inflation-targeting response of Western central banks, led to a fall in real incomes for the many in the West and a rise in asset prices for the few, raising questions about the effectiveness of Western liberal economic models.

The keynote lecture was followed by a discussion and lively question and answer session with:

Alex Capri – Senior Research Fellow, NUS Business School
Lawrence Loh – Director, CGIO, NUS Business School
Stewart Paterson – Research Fellow, Hinrich Foundation

The experts talked about the trade war between the US and China and its impact on the world economy and supply chain. They also touched upon issues pertaining to WTO reform and the rise of bilateral negotiations between countries around the world.