(Bloomberg) -- Taiwan has become “one of the most dangerous flashpoints” in the region as the US-China rivalry intensifies, Singapore Deputy Prime Minister Gan Kim Yong said on Friday.

“Taiwan is one of the most sensitive issues in US-China relations,” Gan said at the Nikkei Forum in Tokyo. “Any clash in the Taiwan Strait will have dire consequences not just for the parties involved, but the entire world.”

Gan’s remarks come as China started its most expansive military drills in a year around Taiwan, ramping up pressure on Lai Ching-te just days after he took over as the island’s new president. Tensions in the Taiwan Strait have raised concern about implications for the global economy — which counts on Taiwan Semiconductor Manufacturing Co. to produce the world’s most essential chips.

“The US-China relationship is the most consequential in the world but is unfortunately marked by deep suspicion and distrust,” Gan said. “When each side views the other as an adversary, the risk of accidents and miscalculations increases.”

Gan, who’s also Singapore’s top trade official, called on US and China to build trust and cooperate on Taiwan and other issues. He said the regional economy will prosper if there’s peace and stability.

China’s growing heft and desire for a more prominent global role mean that its “actions and words are often seen and interpreted differently,” said Gan who took office as Singapore’s deputy premier on May 15. “How China wields its clout in response, will greatly influence the reactions of countries in the region.”

Singapore, like most of Asia, counts China as it’s largest trading partner. The US is the city-state’s biggest foreign investor and a critical military partner. The trade-dependent nation has repeatedly stressed that it will not choose sides.

“China is a geostrategic reality,” Gan said. “An isolated or excluded China is not good for anyone.”

--With assistance from Yi Wei Wong.

(Adds comments from deputy PM from fifth paragraph.)

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