Singapore’s Prime Minister Lee Hsien Loong warned the US decision to curb supply of microchips to Chinese companies could have widespread consequences and greater decoupling between the top two economies may create a “less stable world.”

“The Biden administration’s latest move is a very serious one, I’m sure they have considered it carefully,” Lee said at a press conference in Canberra where he is meeting with his Australian counterpart. “It can have very wide ramifications.”

Last week, the US Commerce Department placed sweeping restrictions on technology exports to China, including semi-conductors and chip-making equipment -- a move which will hamper Beijing’s domestic research and technology industry. The Chinese government slammed the move, describing the curbs as political and arbitrary and warning they would “further weaken” the global economy.

Lee said in Australia that restrictive trade decisions based on valid national security concerns could result in “less economic cooperation, less interdependency, less trust and possibly ultimately a less stable world.”

The Singapore government has for a long time worked to balance its relationship between the US and China as tensions have risen between the two superpowers in the Asia-Pacific region. The city-state’s deputy prime minister Lawrence Wong told Bloomberg News in August he was worried the US and China could “sleepwalk into conflict” over the democratically run island of Taiwan.

At the press conference in Canberra with Lee, Australian Prime Minister Anthony Albanese said the Covid-19 pandemic had shown the importance of securing supply chains and prioritizing “national resilience.”

“National security is not just about our defense systems. It’s also about our capacity to make things here in Australia, to be less vulnerable to shocks of whatever form, be it a future pandemic, trade, cybersecurity shocks or whether it be international conflict,” he said.