Should we connect the dots between China’s neighbours’ increasing assertiveness over claims to disputed islands in the South and East China seas on the one hand and sharp declines in their trade with China on the other? Yes, but do not take our word for it – take it from Lee Kuan Yew, Singapore’s former prime minister. The latest trade figures show a 20 per cent drop in exports to China from the Philippines in the past year and a 16 per cent drop in exports from Japan. Exports from other nations in the region have, however, been rising. As Manila and Tokyo have become vocal about their claims to the Spratly Islands and what the Japanese call the Senkaku Islands (Diaoyu to the Chinese), China is using its economic power to send them a message. From the perspective of a strategist such as Mr Lee, this was not only predictable; it is a predictor of things to come.