THE ECONOMICS ASSIGNMENT

Running head: ECONOMICS ASSIGNMENT
ECONOMICS ASSIGNMENT
Name of the Student
Name of the University
Author Note

ECONOMICS ASSIGNMENT
Table of Contents
1. Introduction.........................................................................................................................2
2. To explore the spillover effects for Singapore....................................................................2
3. To highlight the serious concerns of the Singapore’s economy if there is an escalation
trade tension...............................................................................................................................4
4. How the Singapore government should be responded the current situations?.......................6
5. Conclusion..........................................................................................................................8
6. Referencing.........................................................................................................................9
7. Appendix...........................................................................................................................11

ECONOMICS ASSIGNMENT
1. Introduction
1.1. What is trade tension?
Trade tension can be defined as a term which is related to the disagreements at the
time of trade because of the growing complexity and the number of organizations and the
countries.
1.2. What are the reasons behind the US-China trade tension?
As China is one of the largest economies, it is very hard for the manufacturers of the
United States to tackle the trading switch the traders of China. The President of the
United States, Donald Trump has accused China about their unfair trading practices and
also due to intellectual property theft (Li, He and Lin 2018). In the case of China, they use
to think that the United States wants to curb the rise of global economic power.
2. To explore the spillover effects for Singapore
2.1. Maritime and Shipping
Singapore has one of the largest port in that entire region. There are many benefits
that the port has enjoyed, due to the Strait of Malacca and has become more successful in
the maritime industry (Rodan 2016). It is the leader in most of the area which includes
port terminal operations, offshore building, ship financing, marine insurance, bunkering,
ship brokering, forward freight agreement trading and maritime lawsuit jurisdiction
(Noland 2018). The ecosystem of the maritime comprises more than 5,000 establishments
and has more than 1,70,000 employees; in all total, it contributes almost 7 percent of the
GDP of the republic.
As there is a rapid growth in the economy of China, there is an expansion of the
marine insurance market. With the help of this expansion, they have achieved the position

ECONOMICS ASSIGNMENT
of the second-largest market in the sector of cargo insurance, and further, they have also
become the world's largest market for the cargo insurance market. Due to the enormous
growth of China, it become one of the biggest competitor of Singapore. China has also
invested billions of dollars upon the ports and the terminals overseas, so that they can
level up the port transshipment ability and also have the terminal efficiency (Hughes and
Meckling 2017). Singapore helps at the time of trade, as they clear the barriers as it is one
of the main concerns of the Chinese insurance organizations at the time of the dealing
with the currency of the United States.
2.2. Manufacturing or electric sectors
There are certain concerns that can be seen due to the trade war between China and
the United States, there are certain political concerns that have affected the major telecom
organizations like Huawei. The products of Chinese brands have a decline in the sales and
the production of various chipmakers has also slowed down, thus it affects the jobs in that
economy. In the sector of telecommunication, the majority part will be decreased as the
export of the items is also decreasing day by day (Gompert, Cevallos and Garafola
2016). It is assumed that there can be a recession in the recent period. There are several
industries who works for the biggest telecom organizations, and they also have the major
chipmakers in Singapore; due to the trade war, the supporting organizations will be shut
off.
The trade tensions between the United States and China have imposed several tariffs
by which Singapore is facing more problem and the organization is facing bans on the
products that Huawei has manufactured because of certain security concerns, who used to
be the biggest equipment maker in the telecom industry (Guo et al 2018).
2.3. Attracting financial investment