Singapore: Caught Between Silicon Valley and Shenzhen in the Global Tech War

It is impossible to imagine today’s world without technology, especially the Internet and, in the last couple of years, artificial intelligence. What began as a competition over semiconductors and 5G has now turned into a “tech war”, polarising the world between the United States and China. Technologies have become economic and political tools for superpowers in the race to dominate the world, pressuring other states to choose sides. Singapore is no exception to this challenge. To maintain independence and engage with both Silicon Valley and Shenzhen, Singapore has followed its long-established policy of non-alignment. However, the tech war may accelerate this matter, making neutrality increasingly difficult to sustain.

Today’s global digital order is divided into two main ecosystems: the United States model and the China model. Amazon, Microsoft, and Google are well-known examples of American firms dominating global cloud infrastructure and artificial intelligence research. The United States model is perceived to prioritise private-sector innovation, open data flows, and liberal market values. The China model, with its prominent firms Huawei, Alibaba Cloud, and Tencent, focuses on state-led development, data localisation, and digital sovereignty.

Due to the incompatible approaches of the two systems, alongside the relative decline of the United States and the rise of China, the current conflict, driven by Washington, is commonly defined in the literature as a “tech war” or “technological war”. Emerging after the beginning of the trade war in 2018–2019, it resembles a new Cold War in which the United States strategy is seen as a defensive response to geopolitical rivalry, security threats, and China’s economic practices. The main objective for the United States is to maintain its technological primacy and global hegemony. Moreover, Washington perceives Beijing’s technological advancement as a security threat because Chinese companies are required to share technology with their military under the civil–military fusion strategy. The fear of the world’s most technologically advanced military drives securitisation, making digital development a non-cooperative, zero-sum game. Lastly, the United States imposes sanctions on China to limit its “unfair” trade and economic practices while also making innovation more costly. China is commonly accused of intellectual property theft, forced technology transfer, and excessive state support for “national champion” companies.

The United States strategy involves a “whole-of-government approach” with targeted decoupling in microelectronics, artificial intelligence, and quantum computing. Key instruments of this strategy include trade sanctions, export controls, investment restrictions, entry restrictions, and diplomatic pressure through allied countries such as the Netherlands and Japan. Huawei, a Chinese firm, is one of the most prominent examples of targeted decoupling. Initially, sanctions damaged the firm’s smartphone business. However, unexpectedly for Washington, Huawei’s ICT infrastructure showed resilience and maintained a leading global share of 5G base stations. The company aggressively stockpiled chips, generated income from its Enterprise Business, and licensed patented 5G technology. Additionally, Huawei increased its investment in research and development, creating domestic alternatives to United States-produced parts. Internationally, by 2023, eighty-one countries were using Huawei 5G infrastructure, including NATO allies and third countries, highlighting the limited leverage of the United States. Clearly, United States pressure appears weak at present, yet it still poses future risks by pressuring other countries to take sides.

Between the two giant powers, Singapore continues to follow its foreign policy of non-alignment. Ever since the Cold War, the city-state has balanced ideological divides while prioritising national interests. The commitment to non-alignment arose because Singapore aimed to demonstrate its sovereignty and independence from Britain. It was also motivated by the desire to gain support and recognition from the Afro-Asian community and to avoid global isolation. Instead of choosing sides as the world was divided into two blocs, Singapore managed to remain “friendly to all nations” and trade with every country. In the context of the new Cold War, Singapore today hosts cloud providers from both the United States and China, such as AWS, Google Cloud, Microsoft Azure, Alibaba Cloud, and Huawei Cloud. The country also engages with both Western and Asian frameworks, including the OECD, APEC, the EU, ASEAN, and China’s Belt and Road digital corridors. Thus, Singapore stands on neutral ground, diversifying its digital connectivity to avoid dependence on a single global system or ideology.

Singapore’s neutrality is reflected in its domestic digital governance, particularly in artificial intelligence regulation, data flows, and cybersecurity. The Model AI Governance Framework, launched in 2019, focuses on two core ethical principles: AI must be transparent, explainable, and fair, and AI must be “human-centric”. In this way, it avoids the American liberal model and the Chinese state-centric one, creating its own practical and voluntary approach. Singapore’s AI governance is guided by the Smart Nation Initiative and the National AI Strategy, which focus on the public good, global competitiveness, and a trusted environment.

Singapore is a regional leader that has influenced the ASEAN Guide on AI Governance and Ethics. The country has not enacted specific laws regulating AI but relies on voluntary regulation. Despite this soft law approach, Singapore prioritises the safety of its citizens by leveraging the Personal Data Protection Act. To balance national privacy with international data exchange, Singapore ensures that it maintains “trusted data corridors”. For instance, together with Chile and New Zealand, it established the Digital Economy Partnership Agreement (DEPA), and with Asian countries, the ASEAN Digital Economy Framework Agreement (DEFA).

For national-level security, Singapore implements the certification scheme under the Cybersecurity Act of 2018 and the Multi-Tier Cloud Security (MTCS) for all companies, irrespective of their origin. This allows for government oversight while maintaining neutrality.

In this manner, Singapore has become an attractive hub for investors and multinational corporations, where they can operate in a stable and protected environment. It also plays the role of an intermediary in a fragmented world, allowing Singapore to enhance its soft power and influence. However, as the United States–China technological competition intensifies, pressure from both sides may increase and challenge Singapore’s neutrality. At present, three possible scenarios are expected for Singapore’s future, with the best being continued digital non-alignment. The second scenario results from increasing pressure, in which the city-state may have to choose one side and align with it, leading to fewer investments and reduced policy independence. The third is a risk scenario in which the two systems become completely incompatible and Singapore loses its value as a bridge between them. To remain in the best scenario, it is in Singapore’s interest to strengthen ASEAN digital cooperation, partner with other states, and enhance cybersecurity while also maintaining control of its own digital ecosystem so that no single system dominates.

Despite its small land area, Singapore possesses strategic advantages in today’s technological world due to its policy of technological non-alignment. However, this is not the time for complacency. The more polarised the world becomes, the more challenging it will be to maintain a neutral order. For Singapore to preserve its autonomy, it must continue to innovate, diversify, and maintain the trust of other states through the protection of data and transparency.