Transcription
China were to declare war zone on Taiwan, should there be any conflict or whatsoever? What do you think Singapore should do? Or would Singapore do the same thing as what they did for, you know, Russia and Ukraine? I mean, um, in view of, um, what may potentially happen.
This is [snorts] just a case where the US is sending officials to Taiwan, perhaps grandstanding, whereas China has declared that the Taiwan Strait is no longer international waters, or not international waters. And of course, domestic politics in Taiwan are gravitating towards independence. So, your thoughts on the end game of US-China?
You know, if China were to invade Taiwan, don't think that we will just stand by like we did Hong Kong. You will face the kind of sanctions that Russia is facing over Ukraine. So it gives me great pleasure now to ask you to help me welcome to the stage to deliver his speech, Mr. George Yo. [applause]
Thank you all for coming to, uh, hear me today. We are in a great transition in the world. Um, and many things may happen in, in this process of the old world giving birth to a new world, and this transition will last over many years, and we are now living through it. There are many dangers, which is why I titled my talk today, uh, "Storm Clouds."
When I was in MTI, I was involved very much in trade negotiations. Those were the days when globalization had no limit. When we accepted that trade should be depoliticized. All that is passed. All that is passed. It was made possible by the collapse of the Soviet Union, which was remarkably peaceful because the Soviet Union was not brought down. It imploded, and nuclear weapons around it were, were taken out. Countries broke off to form sovereign states. It was partly because Gorbachev was not a strong leader, and Yeltsin was drunk a lot of the time, and kept going by the Western powers. So during that period, the Western tide flowed eastwards.
When Putin came into power, he saw what was happening and started to fight back. And he knew that in these matters, Russia could not compete on the basis of the economy because its population is too small, but in weaponry, it had a technology, so they invested in new weapons. The Ukraine war, to me, marks the limit of the flow of the Western tide eastwards. And now we are seeing an intertidal period, which may go on for many years. I don't see either side sitting down and hammering out a peace agreement because to concede Putin's minimum demands will be defeat for the West. And for Putin to agree to the West's minimum demands [clears throat] must mean that he has done all this for nothing. He's crossed the Rubicon and has expended enormous treasures and bearing a very heavy cost. So we may, we may well see in Ukraine a situation similar to the Korean peninsula and in Cyprus, where at some point in time, end of the year, next year, there'll be a more or less a ceasefire line, but de facto partition, which may last decades, like that between North and South Korea and in Cyprus, with one part joining the EU, the other part more Russian-speaking being absorbed into the Russian sphere.
Then we have on the other side, the rise of China, which is creating a great sense of insecurity in the Western world, and particularly in the Anglo-Saxon world. It used to be that the Five Eyes were a very discreet, quiet intelligence agreement. We never heard about it. It was only when Snowden told us about PRISM that our eyes were opened to the kind of capabilities which they had. When Huawei started moving into what for them used to be a domain completely accessible to them, they decided that Huawei was a great threat. So in one of their meetings, they decided to bring down Huawei. Recently, the head of the FBI, Christopher Wray, met the head of MI5, Ken McCallum, uh, in London, and they gave a joint media presentation. That's very unusual. People in this business should always be quiet, discreet. For a long time, MI5 did not officially exist. To me, all this shows a certain tension, and they are now poised for a mortal fight.
China sees this. He sees the Five Eyes countries, not the intelligence organizations, but the five countries, thinking in terms of decades. The purpose of AUKUS, which is to augment the attack submarines available to the five air countries to hunt Chinese strategic submarines in the South China Sea, is an example. Xi Jinping is fond of saying, "Changes not seen in 100 years." He kept repeating it, and people wonder, what do you mean by that, you know? Oh, the East rising, the West declining. That's a trite remark. He could have been talking about that. Some said he was talking about technological change. That's bollocks. I don't believe he was talking about that. A hint of what he was thinking about was revealed by Cui Tiankai. Cui Tiankai served as China's ambassador to the US for many years. He retired last July. In last December, he gave a speech where he said, "America's ill will for China has no bottom line, and underlying it is racism. China should be very careful. China should not lose what he has painfully gained over the years by rash action." And he said, "Never fight a war you cannot win. Never fight a protracted war." So I was, this was reported, so I said, "Was it, were these off-the-cuff remarks?" So I checked the video. He was reading from the script, and CGTN carried line-by-line translation of that part of the speech. I said, "Oh, okay. That's a signal."
China is preparing for war. Preparing for war not because China wants war, but China knows that in order to avoid war, it must be prepared for war. So there's a famous line in Sun Tzu, "The Art of War." He says, "In other words, do not plan on the assumption that the other side will not attack. Plan on the basis that you can withstand all attacks. Then there will be peace." Now, interestingly, this statement from Sun Tzu was quoted by Medvedev, the Russian prime minister, who has also been reading Sun Tzu.
There are three main domains of warfare which I think China is worried about. Now, I don't belong to the Five Eyes. I'm not in government. So I'm just watching and trying to understand and make sense of what I read and see. One is, of course, nuclear warfare. China says it will not be the first to use nuclear weapons. So it must have a deterrent capability. The US has been quite determined to deny China a counter-strike capability because if it's just conventional warfare, repeated scenario wargaming by the Indo-Pacific Command by RAND shows that in a conventional war around Taiwan, the South China Sea, America cannot prevail. So they must be able to threaten nuclear weapons. But if China can threaten back, then that threat is blunted. So China has a few hundred warheads. America has many thousands. And China is thinking of putting the ICBMs on high-speed rail. It's about the same length as the carriage. Uh, but they can't be sure because a few hundred [laughter] you can pack every one of them. Yes, you have tunnels, but I know where the tunnels open and where they close, and I can close them. China's strategic bombing is very backward, relatively speaking. So, they are very dependent on strategic submarines, which is why the South China Sea is so important. It's not about navigation or shipping. At the core of it are nuclear submarines. You know, in SA, they have a facility like you see in a James Bond movie. You know, deep down below, the submarines come out. The Americans cover the seabed. They have all kinds of drones, seabed arrays, surveillance to monitor all the Chinese submarines. And the Chinese harass American submarines and encourage fishermen to fish out American drones. They pay much more for a drone than for a tuna. And see, so there's a game going on which is not much reported, but which those who are interested follow. But just to be sure, China will increase its warheads to maybe a thousand, maybe more. So that whatever you do, you can't take out all my counter-strike capability. And without that counter-strike capability, America's ability to prevent reunification of Taiwan will be severely blunted. So this is one serious area. And in many Chinese cities, they're building tunnels, nuclear tunnels, like they did against the Soviet Union.
The second area where they worry about is cyberspace, and there the fight will be from outer space to underground. Today, the Americans will not agree to sing a cable to America near the China coast. It must go through the Java Sea, in between Sulawesi and Kalimantan, and from then straight across the Pacific. They can tap undersea cables. They assume the Chinese can tap undersea cables, and the Chinese side, internal communication security, all buried internally. Satellites. NASA said China wants to take over the moon. They want more money because China's space program is making rapid progress, which troubles the Americans enormously.
During COVID-19, I was listening to some Guoli, the head of Chinese medicine in China. Every dynasty had epidemics. Every dynasty, many epidemics. And China's records have recorded over 300 epidemics going back to Tang. And for every epidemic, they know the symptoms, they know the progression, they know what herbs are useful. And S. Paul said, "Every epidemic is different, but they affect the same human organs, and they kill by inflammation. And we know how to treat for inflammation." So the traditional way in China to handle epidemics is lockdown. So Chan, they were divided into 108 fang, every fang can be locked down, whether it is an assassin plot, a disease, every fang can be locked down. During SARS, the first SARS, China locked down, they stopped it. Now, even in the harem, in the nong, they can't afford for the epidemic to kill all the princes, then the dynasty is dead. So they have procedures for locking down the nong. So every concubine has a cell. So if you die, this cell dies. The rest will. Shanghai thought it had a superior system using man-made and artificial intelligence. So when they could not handle it, they just locked down Shanghai. The Shanghai people were completely traumatized. Traumatized, right? Many of us are aware of this. Can't be helped because it's a rehearsal that if one day China faces an epidemic much worse than COVID-19, he has a way to stop it. And if you are a potential troublemaker and you know that they have a system to stop it, then you won't try, because if you try, it'll come back to you. I think this is what Xi Jinping means when they said "Changes not seen in 100 years." Many people are very angry with Xi Jinping. Many want him to go away. Business people, academics, journalists, you know, because he's crowding into them. But as far as Tongyang [clears throat] is concerned, this is this is a big matter. If you're in the way, I push you aside because this is a matter of life and death. When did they come to this conclusion? I don't know. They thought they could have a working relationship with the Americans. But when they saw the pivot to Asia and increasing preparations, they said, "Oh, don't assume they will not attack. Assume they will attack, but you'll be able to repel the attack." So this period in China is a very tough period for ordinary people, for businessmen, for a lot of people. They are preparing for a storm. And for China, time is important. The longer the contest is deferred, the better it is for them because they're getting stronger. Whereas in America, America today is very divided. A lot of people say America has not been so divided since the Civil War. The Civil War was settled not by negotiation, not by one-on-one conversations. It was settled by violence. Terrible violence. So this period which America is going through now, where every institution has been weaponized and politicized, including the Supreme Court, is creating very deep divisions. To me, the greatest uncertainty in the world today is US politics. It's not US-China relations. This midterm, the Democrats may face a terrible defeat. And for that reason, in the short term, relations between the US and China are improving. You remember when, uh, Secretary Lloyd Austin was in Singapore for the Shangri-La Dialogue, and he met Wei Fenghe, and they sat down and they had a kind of a [clears throat] statement of former positions. Shortly thereafter, Yang Jiechi met Jake Sullivan for four hours in Luxembourg. The Americans described it as productive. China described it as constructive. Both sides described it as candid. [clears throat] They were making progress. And a few days ago in Bali, Wang Yi met Blinken for over five hours. China said constructive and useful. The US agreed. And Blinken, the following day, said Biden will speak to Xi Jinping within a few weeks. For what? For China, the big issue is Taiwan. China has been telling the Americans, "You keep saying one China, you do something else. We don't believe you. We will judge by what you do." And Wang Yi said, "If there's conflict over Taiwan, there will be ferocious storms." That's the words he used, "ferocious storms." In other words, war. And the entire basis of US-China relations, which started with Kissinger and Nixon, was based on one China. Kissinger said, "He can talk about everything else, but it will always come back to Taiwan." So Taiwan is not a card. Taiwan is the basis. Every American administration thinks this is a card, and then it is brought back to reality. Will it be again brought back to reality? I'm not sure because the anti-China sentiments in America today are bipartisan and profound. Even if the Republicans win, they'll still be anti-China. And the deep state, meaning the security, intelligence agencies, defense, they are committed on a multi-year program to fight China. So it's not going to change just because the president has changed. So in the short term, because America needs to lower tariffs in order to reduce a tax on its own population to reduce inflation, and needs China to do some face-saving concessions for this to go through, so they need to talk. So in the coming months, we may well see improvement in China-US relations. But as a longer-term proposition, I don't think the position has changed.
So we're all caught in between. You know, in Singapore, we're very reliant on the US for weaponry, for the financial system. Uh, we don't want to choose. Our best bet is to have ASEAN, you know, because if it's just us, it's very uncomfortable. But if there's ASEAN around us, we can all hide behind ASEAN. It's ASEAN's position. When I was Trade Minister, Foreign Minister, for me, always the first circle of our trade and foreign policy was ASEAN. The more ASEAN puffs up, the more comfortable the buffer we have. It's like airbags, you know. We made an accident, airbags all around us. We need ASEAN for that. It's very important. Never disdain our neighborhood. Indonesia, in particular, if Singapore and Indonesia align their positions, we can win over ASEAN. If Singapore and Indonesia are not aligned, there'll be no agreement in ASEAN. So this, I see our bilateral relationship is growing. Unfortunately, under Jokowi, Indonesia is not that interested in ASEAN. I hope this will progressively change. I'm very heartened that over the G20, Jokowi took a firm stand and told the G7 countries, "If you don't attend my dinner, no, it's a voluntary dinner, it's okay. You know, if you want to walk out, you may be going to the toilet. Seven of you, it's okay. [laughter] It's okay. We still have the meeting, but we will not not invite Putin, and we will not hint to him that he should not come. Whether he comes or not, that is his decision. But in the meantime, exercising my prerogative as chairman, I invite Volodymyr Zelenskyy to come along. He wants to come physically, that's fine. If you want to zoom in, that's also fine." I'm very impressed by Indonesia's leadership for the G20. And I hope that he will continue to use that leadership for ASEAN, because all of us, not just Singapore, all of us need ASEAN. And for those of us who are in business, I think we have to think through clearly, because whether we like it or not, globalization that we were used to has crested, and in selective areas, there's decoupling. Decoupling because it is strategically necessary. Even in Singapore, no, we're talking about food security with Samui. Every country now has to protect itself, and decoupling is a way of protecting yourself. You've got to decide then, whatever business we are in, we know that there are fault lines. If you build structures across a fault line, then naturally there's an earthquake, your structure will collapse. But you see, no, no, no. It's okay. I will be on one side. So there can be an earthquake. I'm still on one plane. If I want to straddle, don't build a monument. No. Build like a kind of a souk-like structure, you know, where we're linked together by pathways like boats rafted together. The tides can go up and down. There could be waves. It's okay. We bob up and down. We are still connected. So businesses, families, individuals must, must all make this judgment, because I see a stormy period ahead. So Danny, thank you. Happy to have a conversation from here on. [applause]
>> Thank you, George, for an amazing tour of the world horizon. Very sobering. Um, you know, in terms of messages to take away, um, not a great deal that we're going to be laughing and smiling about in the short term if we are mindful of the greater dynamics that are already in play. Um, I would like to make this a conversation with everybody here, and I invite you all to address your questions to any part of what George has said, or indeed extrapolate from the things that he has already pointed to. While I'm waiting for the first question, George, maybe I can get one in, uh, to ask you to, to address. And this is something that touches on the global supply chain and logistics, as well as some, uh, and how it connects with the geopolitical forces that you have outlined for us so brilliantly. You mentioned Taiwan, and how Taiwan is not just a card in the game. It is the basis for the engagement. Taiwan is also the location of the production of the world's most advanced semiconductors. 80% of the world's three-nanometer semiconductors are made by TSMC in Taiwan. And it is these chips that drive not just everything in the modern world, but that make globalization work, that make international trade work, that make the shipping of goods, pineapples, everything else from one part of the world to the next function. Taiwan is in the crosshairs of US-China tensions. And although you say US-China tensions might not be the principal thing we need to look at, it is US domestic politics, US-China tensions, be how all of this spills over for us into the rest of the world. Given the fragility and the concentration of the global supply chain in its semiconductors, coupled with what you have described of the geopolitical dynamics, should you be even more worried about the health of the world?
Well, if, um, the collapse of the semiconductor industry in Taiwan affects both sides severely, then another side is likely to be adventurous. But let us say the US facilitates Taiwan independence, and China feels that a red line has been crossed and decides to move. We should be forced to. Who will be affected more? Uh, it's interesting that when, uh, Christopher Wray and here at MI5, Ken McCallum spoke recently, they talked about the possibility of the Chinese invasion of Taiwan. They said it would have horrific business implications. Horrific business implications. My sense is China will be affected less, and after that, that industry is under China's control. So, because I was in this game in my youth, when Christopher Wray and McCallum spoke like that, I think they could, they could have been sending a signal that they understand. And a few weeks earlier, I was reading an art, a speech given by, uh, the US Under Secretary of Defense, Colin Kahl. He said, you know, it was a fierce speech against China, but he said, you know, "If China were to invade Taiwan, don't think that we will just stand by like we did Hong Kong. You will face the kind of sanctions that Russia is facing over Ukraine." I read his speech two, three times. I said, "Is that all?" [snorts] "Is that all he's saying?" So my guess is it was a signal. It was a signal following the meeting between Yang Jiechi and Sullivan in Luxembourg, that, "Okay, we understand Taiwan, we will move away." That's my guess. I may be wrong. Let's see in the coming weeks and months.
Okay. >> You're right. I think China is also now moving full steam ahead to achieve certain self-sufficiency in chip technology. This 5-nanometer, 3-nanometer is important for handsets because we want the intelligence in our pocket. Yes. >> It's not that important for the rest of industry. For motor cars, you can have 12, 24, it doesn't matter. Yeah. And China is producing those by, by in buckets. >> Yeah. >> I see. Yeah. Thanks. I mean, the, the other thing that I might add in this discussion is that, you know, the way that we've been talking about Taiwan as a geopolitical, not chip, but the basis. Uh, Taiwan is also geologically unstable, not just geopolitically in the crosshairs. I happen to look up, as I routinely do, worldquakes.com just an hour before coming in, and worldquakes.com reports that in the last 365 days, Taiwan experienced 182 earthquakes. >> They've won every other day. And you know, I just think that if you're going to be fabricating semiconductors, the last place you would want to do it is where you're going to be perturbed by earthquakes every other day. But that's how the world has gone. And I wonder if, you know, maybe a bright spot in this discussion is the world G20, Indonesia leadership, or some other organization that can act multilaterally should think about the economics, technology side of this at the same time that we worry about the geopolitics. Questions from the audience.
Is I'm Chinway. I'm with the Hinrich Foundation. >> The Hinrich Foundation, where we're an Asia-focused philanthropy that advances, uh, sustainable free trade. So my question is very much focused on trade. And you, as a minister, were pivotal in the WTO in its early days. You were involved in Seattle, you played a key role in Cancun. Zoellick depended on you to marshal the developing countries. When you look at the WTO now, and there's been a, you know, great success in recent months, but that comes on the heels of years of setbacks. How do you see the future of the WTO developing alongside all the issues that you've raised in terms of geopolitics?
Last night, I was working on, uh, I'm writing a series of musings which has been growing. So it'll be published in three books. So I'll be talking about WTO and world trade in my third volume, and I was writing, I was going over my drafts, you know, and I was reflecting with some sadness that the, the, the days of globalization have passed. GATT was a way to organize the free world during the Cold War. Free trade, it was America's largest economy providing the basis, buyer of last resort, seller of last resort. Then collapse of the Soviet Union. The whole world got stuck into it. GATT became the WTO, and we thought that there was no limit to globalization. That trade would finally be depoliticized. Now we know that we were naive. The world has now gone back to what has always been in history. So when you talk about WTO, because I check agriculture during those periods, I said, "Well, it's a moment in history. It's past. We have to accept that the world from here on is both global and local, decoupled in strategic areas, and everybody increasingly concerned about the inner circles of security, economic, food, culture, everything." It is the result of a multipolar war. It was unipolar with one having his own future arrangements. Then it became, sorry, it was bipolar, then it became unipolar, and now it's becoming multipolar. And when was the last time we had a multipolar world? Well, before the Second World War, so within the British Empire, there were imperial preferences. Within the Dutch Empire, they had their own preferences. America had its own internal market. So, we're going back to that world. So, perhaps there's nothing new under the sun. And the period that you talk about was de-politicization in human affairs.
The, just to follow up this part of the conversation, if I may. The, the question, uh, struck me as one about economic alignment in terms of trade. Uh, George, your answer, uh, touched on that, but it also reached into geopolitics, geopolitical alignment. When you talk about multipolarity, as you know, sort of the way the world is now, it's a statement about political systems, about beliefs, interests, and values. And I wonder if the alignment between the economics and politics is something that we agree to too readily. Is it possible to have a multilateral trading system when even if political beliefs are different? And in fact, for the last 50 years, it seemed like we had that. After Nixon went to China, America was quite happy to let China continue on its socialist, communist ways as long as it traded a certain way. Is that world no longer possible? That world where there's a separation between the economics and politics?
It was only a short moment in history. China joined the WTO in 2001. I was there in Doha. By 2011, >> Obama's administration was talking about the pivot to East. >> Yeah, that's true. >> And increasingly identifying China as the major threat to the US. It only lasted 10 years. >> Yeah. >> So, no, it's an aberration. >> Yeah. I mean, I read about it with profound sadness because I spent so many years of my life on it, and those were some of the most stressful periods >> during my years in government, but >> Yeah, but we learn. >> We learn. >> Other questions? Yes, sir.
>> Not really a question, but more a comment. My views, if you don't mind, but it seems to me that globalization >> I know who you are, please. >> Oh, sorry. Brian, go from the Tower Family Office, single family office, ESG and impact investors. >> It seems to me that the period of globalization was convenient for America and nothing else. That's my view. I'm very happy to be proven wrong.
For most of history, the biggest domestic market was China. And China had always had a very lively internal circulation, never really dependent on the external circulation. Uh, China is not giving up its external circulation, but it knows that everything about its political stability and its cultural coherence requires a vibrant internal circulation. And that's why he's got this, uh, system administration where no one is allowed to be leader in his own locality, everything reports to the center, a comprehensive system of canals and roads to ensure that in any crisis, food can be distributed, salt can be distributed, and revenues can be collected. And among all the ethnic groups, the Chinese are remarkable because China has a population of 1.4, 1.5 billion, 94% are Han. This is not the result, this is not by accident, this is policy and preference, because the Chinese government have always felt that governing non-Han people is very difficult.
So among Han people, you can lock down, you can do all kinds of things, they will take it. Once you deal with foreigners, then it's, you use economics for political management. So if you are friendly to China, I will favor you, and you need only to do a little bit, and you'll be so happy. And if you are hostile to China, I will turn the knob the other way. Just a notch. Nothing to me. I don't feel it. You will feel intense pain. And that is why throughout its history, China never separated trade from politics. It much prefers to use trade for foreign policy than gunboats and armies, because to use military force, you create a lot of damage to everybody. Trade is subtle. I give you an example. Again, it hearkens back to a different period where Yingluck Shinawatra won elections that was going to take over the government. So the military stepped aside. Before that, Kerry has a port at Laem Chabang in the eastern seaboard of Thailand. There was an old sugar facility which Robert himself built years ago, but we enlarged it. And suddenly, no more sugar. What happened to the sugar? No more sugar. I heard the rumor, lost a lot of money on the trade because something happened. What happened? China opened the back gate in Myanmar for sugar imports. The generals made money because the moment issue license, you import sugar back into China. No tariff. It lasted one year. It was a final payoff by China to their friends in the military. After that, I'm Yingluck. Now they're scratching their head because they got to deal with the military again. But what I'm saying is, ordinary Chinese feel nothing. But when they favor you, you get giddy. When they decide to punish you, you also get very giddy. You see? [laughter] So this is the advantage of having a large population which is coherent, allowing you to develop a huge internal market. It has always been China's greatest strength when it is well organized. But of course, when it collapses, the chaos is equally awesome.
Uh, hi, Mr. Bennett. Sarah. I work for PIM, which is a global investment manager. I look after the business in Asia. What you said, um, uh, there is this deep-seated rift between, uh, China and the US, and China and the West. Um, and is your view that economically China will become more isolated than it's been in the past? And if that's the case, and we're seeing some of this now, would ASEAN benefit? And can ASEAN get its act together to really benefit from the shift away from China?
I sent over to Europe as China's number one trading partner many years ago, and I think we are heading towards maybe a trillion dollars in bilateral trade within a few years. China was hoping that it would be reached earlier, but it may take a few more years, but it will be reached. And for all of us in ASEAN, China is the number one trading partner. No one who is asked by the US to choose between China and the US will likely choose the US over China because it's on that side of the bread that we're buttered. But no one who has that relationship with China, uh, is happy about it because it means that he's got a lot of hold over me. So, everybody seeks diversification. My, my persistent recommendation to American and Western friends is, why do you want us to choose? If you don't force us to choose, you are a free rider everywhere. You'll be welcome. Because the more they see their account with China growing, the more they say, "Oh, this is not good." You know, I better get the Americans in, get the Europeans in, get the Japanese in. I said, "You're a free rider. You don't have to pay a cent for infrastructure. Let China bear all the consequences. I just free ride on it." But it means that China becomes bigger and stronger. And they don't like that. You see, so they're caught in a bind. They fear China because they think that China may one day behave like them, uh, when it becomes very strong and powerful. But I don't think it's in the, in the Chinese self-conception. As I said, China is 94% Han for a population of 1.5 billion. Not by accident, but by preference. I'm going to Croatia in 10 days' time. And Croatia, after ethnic cleansing, is one of the most homogeneous countries in Europe. Four, five million, five, six million people. Is 90% Croat. China's 1.5 billion people is 94% Han. So think about that, you know. And therefore, that deep nature will not change. We say China will isolate itself from the world. China has always been a universe unto itself. Always been a universe unto itself. Which is why building walls is deep in the Chinese mindset. They're always building walls. You build a wall not to conquer other people. You build a wall to keep people out. [snorts] So the Great Wall has been rebuilt in every dynasty. China has walls for finance, for capital markets, for culture, for education. And in the last few years, has built the most awesome wall of all, the Great Virus Wall. And does it succeed? Walls are never 100%. But it's working. And you know, even, I mean, if you leave aside the Western media report, China during COVID was the least damaged economy in the world. Least damaged. They continued to grow. And in fact, the manufacturing expanded, the exports grew. Last year, China's trade surplus was 650 billion US dollars. It's an enormous amount of money. Why? Why was there? We're talking about freight rates going up 20 times. Why? Because the ships left China full. They all returned empty. I was in this business, and I'm told my former company has made a lot of money. It used to be you send the ship to Los Angeles, you say, "Okay, the moment you discuss your containers, come home." When freight rates went beyond $5,000, they say, "Forget about the container. Just leave the container there. Ship come home," 'cause they can replace the container. It's only $2,000 per box. So, we may say, "Oh, China did terrible things during COVID." Yes, they may lock down one city, but they have hundreds of cities, which means that the other hundreds continue to operate normally. So if, if tomorrow your number is drawn, "Oh, tough, okay, we just take one month rest. The others continue." Now, Omicron is more complicated. I don't think it is worth their while to continue this strategy against Omicron, but they want to make sure that the entire country, including Shanghai, has a system in place. So my guess is after the 20th Party Congress, you loosen. Thank you, sir.
>> Uh, Mr. Yo, uh, my name is Andrew Tan. I work for Harvest Farm Management, a Chinese investment manager. So, last November, I was in actually Paris. So I met the French. The French was asking me, "When will China attack Taiwan?" There was a big topical part about investing in China. So I told them, I'm not sure, but I'm more interested in and more likely to see when the Russians will invade Ukraine. Of course, I do not have a crystal ball in front of me to forecast that. So, of course, the Europeans' obsession has been that, "Oh, the Chinese, they will attack Taiwan. You know, Chinese has actually been going down the wrong path." So assuming, I mean, um, this is a topical discussion about China and Taiwan, and then we have unfortunately seen what happened and how Singapore has reacted towards Russia and Ukraine. So assuming that this is a domestic affair, and China were to declare war zone on Taiwan, should there be any conflict or whatsoever? What do you think Singapore should do? Or would Singapore do the same thing as what they did for, you know, Russia and Ukraine? I mean, um, in view of, um, what may potentially happen. This is just a case study. Now, Singapore's One China policy goes back way before we even had diplomatic relations with China. When agreed to let SF trade in Taiwan in the mid-70s, second half of the 70s, one day we'll recognize China, and all be stopped in Singapore. So there was no surprise. Singapore's position is very clear. Lee Kuan Yew got me to make the announcement in Parliament that we'll allow the US to use our facilities. He was very clear that if there's a war over Taiwan, Singapore will not be involved. I don't believe that policy has changed. And Ukraine is an independent country. Now, whether our policy is right or wrong, and we can talk about that, is not a situation which is analogous to Taiwan. I would say for the Chinese in Singapore, do a poll. Do you think Taiwan should be independent? I think the majority will say no. And the Singapore government says no, we'll support Taiwan independence. >> I think the government will face political problems domestically.
Thank you. Um, Robin, I'm going to have to give you the last question, and we're going to have to end after that. I know there are other people who have their hands up. I apologize ahead of time, but Robin, thank you, Danny, for that privilege. Uh, George, it, uh, it's always a pleasure to be at the receiving end, uh, as you impart your knowledge and wisdom. Robin Hood, Temasek. Uh, my question is, given that there are so many business leaders in the audience today, uh, would you be able to, or you, no, I'm not able, would, would you, uh, like to depict for us what do you see as the US-China end game? And what are the, the possible, possible scenarios of that against a backdrop where the two powers have massive mistrust of one another? Against a backdrop where the working-level, long-established conduit communications are no longer working? Now, we're standing the fact that Blinken, Sullivan, Yellen, as well as Austin, and even General Mark Milley, have spoken with their respective counterparts. Against a backdrop where the flaw or the red lines of the relationships are getting increasingly murky. And, um, um, and, and against a backdrop where the one, most dangerous flashpoint that is the Taiwan Strait, where the three key stakeholders all seem to be raising temperature, where the US is sending officials to Taiwan, perhaps grandstanding, whereas China have declared the Taiwan Strait is no longer international waters, or not international waters. And of course, domestic politics in Taiwan are gravitating towards independence. So, your thoughts on the end game of US-China? Thank you.
There's a kind of tug-of-war going on. US is pushing here, pushing there. China is, uh, letting the force go by it, and sometimes returning it, but not pushing the US. And China's objective is, "In time, you will know my nature. That I'm happy with being 94%. I'd want to reduce it to 90%." So when you understand that nature, that I'm not like the old Soviet Union, then you may be less anxious about my being the biggest economy in the world. What the US is afraid of is they lose their top cultural, moral position in the world. And China is so happy to say, "Look, it's okay. You be top dog. You be the world policeman. It's fine. You want to spend money on aircraft carriers in the Baltics, in the Caribbean, in the Persian Gulf. Good luck to you. [laughter] In their hearts, the Chinese know, because it's in their history, that you do this, you kill yourself. There's no profit in interfering in other people's affairs. And if sooner or later, you will learn this lesson, which we learned painfully more than 2,000 years ago." You see, so I think the Chinese are playing for time. But of course, if the US economy were functioning, they were united, then the US will see that all the philosophical BS, they just punch you. But the US is no longer in that position. As its internal contradictions, to use a term the Chinese like, are getting more severe. So the longer the Chinese are able to maintain stability in this tai chi push-hand, you know, the longer they let America weaken under its own internal contradictions. But they may be wrong. America may suddenly be able to renew itself and become strong again, in which case the Chinese will then have to adopt different tactics. But this is an ongoing drama, and there's no guarantee they will have a happy ending. You know, it may be a very unhappy ending.
Thank you, George. Um, again, I know that there are questions still, but I'm going to have to call this event to a close with your permission, George. I think that your answer to Robin about the potential endgame nicely bookends the contents of a lot of the lecture, where you had begun telling us about Ukraine and Russia, and giving us a picture not really of an irresistible force meeting an immovable object, but two irresistible forces crashing headlong against each other. You carried that dynamic forwards when you told us about how the US-China rivalry, the West is gearing up for a mortal fight, and China is preparing for war. All this is very grim. I took a bright spot of light in your relating how Singapore can work within ASEAN to keep things going on an even keel, if not for the entire world, at least in this region for ourselves. Um, George, I want to thank you for all the insights and the good cheer that you've shown us as we asked you questions. I want to thank the audience for all your interest, enthusiasm, and participation. Um, and it's been just a wonderful event. Thank you very much. Fore [laughter] speech. Foreign speech. Foreign speech. Foreign speech. Fore speech. Fore speech.