Transcription
Good evening everyone. Please welcome the chief executive officer of Seven Singapore, Mr. Marcus Louu to deliver his opening remarks. A very good evening. A very warm welcome to everyone.
I can see in this room is an eclectic mix of business leaders from a myriad of industries. I would like to think first and foremost because of the crowd that I see in front of me that Savios was the draw card. But clearly you are here to hear from one person in Mr. George. Sir, such is your popularity. It holds no bounds. A big round of applause for Mr. George.
[Music]
Dominating the headlines in recent years. We've been talking about how tough the market is, how challenging it has been. But as much as we talk about and preoccupied with what's challenging in our business, there is always unfortunately as much as it doesn't want to happen, a segment of a society that is disprivileged or underprivileged. So we must never forget that in our way at Savios, we've been working with Viva for a number of years. We've been supporting their cause.
Now, back to the main event that we've all been waiting for. Let us invite Mr. Chris Marriott and Mr. George onto the stage.
[Applause]
Chris is the Savio Southeast Asia CEO. As much as he looks like the quintessential British expert, he's been in Asia for the last 35 35 years with 15 in Hong Kong and 15 in Singapore. So I think he's got a firsthand window view of the app and flow of both Hong Kong and Singapore rivaling each other as economic powerhouse.
Mr. George I guess needs no introduction. He used to be a cabinet minister, chief of navy, global business and air force. Pardon me. Okay. Global business and thought leader. His career has spanned defense, foreign affairs and trade. His test understanding and knowledge of Asia's place on world stage is remarkable. his uncanny ability to connect history, world leaders and a lot of his narration about interpersonal connections with people all around the world has brought brought him as a very well sought speaker.
So over to you Chris. Thank you Mr. Georgio. George maybe I could give you this.
So good evening ladies and gentlemen. Um a very warm welcome to you all. I am delighted by the turnout tonight. As Marcus said, we've we've really uh got a broad range of businesses and supporters for this cause. So, thank you. Um tonight, uh I hopefully it will be an engaging and thought-provoking conversation between uh Giorgio and myself. Um we will have questions at the end of the conversation for about half an hour. But um maybe I can start and say to provide some structure to the evening's discussion, we're going to explore three key themes. Global geopolitics and trade relations. Then we're going to talk to the leaders in the room about strategies in a constant state of change and then move on to Singapore and how it's going to position itself now and into the future.
With these topics in mind, keen to open up the conversation. So I'll start with an easy question. Um, following China's summit with India and Russia and their 80th anniversary parade with Russia, North Korea, and Iran, do you think China and its allies are set for a long-term adversarial stance against the West, or is there still a path to strategic coexistence?
Those images express what is happening the world today. We're in a great transition uh to a different kind of world where the US instead of holding the ring has decided that there's little benefit in doing so. is jumping into the ring itself to be a participant and the result is constation everywhere. It used to be Dwanu described the US as a benign superpower. It maintain global rules in international institutions like the WTO. It took the lead and I was for many years a trade wall. I know I was involved in trade negotiations and without the US we couldn't have made progress but the US now increasingly feels that the institutions which she helped to create at the end of the second world war when it was 40% of global GDP that these institutions no longer act in this interest and therefore subverts them when it feels that they should be marginalized or distorts the operation in order to benefit itself. America first should be an embarrassing phrase. I mean number one, you never say me first. How can the leader, how can a CEO, how can a boss say me first? Of course, we know he's me first, but there is always a dressing up almost a hypocrisy which shows your aura, your strength. But now there's no embarrassment. America first and it says about bullying others. If you're Singapore, well, okay, so it's better for Singapore to stay in the shadow and don't attract too much notice. If you have Panama in the limelight, frankly, you have no choice. Then he thought he could push China. China looked the other way. China could not be pushed. Russia of course cannot be pushed. And even India has shown that it will not be pushed or Brazil or South Africa. So Trump will push where he can, will bully whomver he can bully and the result is a reaction.
Global financial crisis 208. The G7 countries could not generate sufficient demand to pull the world out of a crisis. So George Bush Jr. He convened the first G20 summit and the following year. Gordon Brown in London got the G20 leaders to coordinate fiscal and financial policy and China introduced a 4 trillion Roman P budget and it really spent in those few years China bought more concrete than the US in its entire history. It helped to get the world out from the GFC. It could have been much worse. Now imagine today if there's a another global financial crisis and the liquidity overhang today is much greater than it was in that 208. The G20 is not functioning because of the Ukraine war. The G7 collective GDP as a proportion of global GDP is much smaller. We're in danger. So people are signaling to the G7, you can't decide for the entire world. So breaks the SEO. They are posturing to show that look, hey, you are not what you were before. The US thought it had India on his side against China. India thought he had the US on his side against China. Then when the Ukraine war broke out the America found that India is not going to disavow Russia and after Bahalgam India realize that America is not going to denounce Pakistan. So now both sides know it's an adult relationship. We get together when it's to our benefit otherwise we act in our own self-interest. So when Modi C and Putin were laughing, holding hands, part of it was for the camera to tell the Americans, "Yeah, of course you're number one, but you know, we're not that small and you can't just throw us around."
Then on September the 3 when China commemorated the 80th anniversary of the end of the war against Japan and fascism, he came out Putin on one side, Kim Jong-un on the other side. But you should pan out a little bit more. It was Prao, it was Toka F. Why Prao? Why Toka F? After tensing, Praobo flew back to Jakarta because there were riots. So having come it down by facing the media with Meawati, Puan, Surya Palo and the others, he then flew back to Beijing just for the parade. Then flew back to Jakarta. Why did he do that? Because it was important to the Chinese. Why was it important to the Chinese? Because in 2013 August Cinping launched the B and road initiative in Astana in August 2013 in Nazabai F University. Slightly over a month later he was in Jakata launching it at the DPR. So these two countries Kazakhstan Indonesia are the two key countries for the belt and row. People say oh bel and road is being being deemphasized. Not at all. Belt and road is part of this new phase of history. And that was a full display. Prao knew it. He knew that was important to the Chinese. He wants China to help his program for economic development. And it was a display for the world to see but principally for the Americans and for the G7 countries to see that. That was the meaning. We are in a great transition to a multipolar world and it's not going to go back to the past. Water doesn't flow uphill. What we have to try and figure out is what shape that multipolar world will be.
Do you I mean you talk about China's great strength um but looking at the sort of financial standing of it at the moment it really does need to drive its own internal economy its own uh I think GDP the domestic consumption is about 30% of its GDP when normally mature countries are more like 60%. It's got u 17 plus% youth unemployment. Um a lot of commentators talk about uh too much spending on infrastructure, too much focus on key industries like EV cars or solar panels. So there's a great overcapacity there. Um I'm I'm relatively bullish on China being consistent in terms of economic growth. But am I being too um too enthusiastic about it? Do you see that it won't have the strength to assert its position?
There are many problems in the Chinese economy. There there is fierce price competition and the Chinese is trying to intervene in what they call involution nature in you know where the competition results in the downward sparrow and is destructive. In a capitalist society from time to time there will be price wars and after that there'll be consolidation but it's wasteful of resources. The Chinese government is intervening to prevent it from being too wasteful and really encouraging consolidation. So I was talking to someone from a very big solar panel manufacturer in China and she told me that yes because of government intervention is a bit better off for them. So it become a little oligopolistic too much of it is no good for China. Uh but they don't want it to be too wasteful. The big problem was when they punctured the real estate bubble. It was getting ridiculous. When I was in Hong Kong, chairman of carry logistics, all my middle level managers in China, they were investing in property. Any savings you have, you throw in the property, you leverage it with mortgages. You did nothing to those properties. They were a one-way bet. And we know what happens to oneway bets. they lead to disappointment. They had to puncture it. Think about it. If China didn't punctuate it when it did and and then they had this enormous property bubble when they were facing Trump, they would have been in a very weakened political position. But because they saw it coming, both Trump and the problems the bubble will cause. So they punctured it. And of course this 30% of GDP is on everybody's balance sheet. Everybody felt poorer. And it affected consumption. And for as long as people couldn't see the bottom, they couldn't plan. Well, a bottom has formed. It's not going to get worse. And in fact in first tier cities is beginning to show improvement. You are in the real estate business you would have got the feedback in in third fourth tier cities is still problematic. It will take some time but there's a sense that it's rounded the corner. The stateowned enterprises they will support the private companies. Well, they want their pound of flesh for people who've done wrong, for people who've gone too far. So, they're restructuring. They're losing money. People have gone bankrupt. Some have got to face a music. But I think the real estate problem has seen its worst. Consumption is gradually improving. Those of you who go to China often, we can can see it for yourself. In Shanghai, I was there recently. I spent two weeks at Futanachu as a visiting scholar. There are more coffee outlets in Shanghai than in New York or in any European city. I never for the life of me believe that China from a tea drinking society would have taken to coffee. When my when I accompanied my parents to China in 1983 to Shanto, my father needed his daily coffee fix. We scoured the whole city. We couldn't find coffee, not even in a powdered form. You know, the world has changed and Starbucks is pulling out because there are too many Chinese coffee outlets priced much more competitively with innovations like maltic coffee which Starbucks can go into. They are not deliberately stimulating consumption because it will lead to wastage and they've kept the rem. No, China has been accumulating enormous surpluses. When COVID started it was 500 billion, then it went up 600 billion, 700 billion. Last year, China had a merchandise trade surplus of $1 trillion. And China together with Hong Kong is the world's biggest creditor nation in the world. What's happening? The Chinese are buying up properties and assets all over the world where they allowed to buy them. A little trickle come to Singapore and it creates asset inflation. Yes, we want them to consume more. They will, but they don't want to overdo it. and they're still investing infrastructure. Unemployment among young people is because of restructuring. China today accounts for more than half the robot births in the world. More than half the robot births in the world. In the Pearl River Delta, Young Delta, many factories are dark. One reason why their cars are so well received is because they're made by robots. And the Americans re worry that they're going to make missiles and drones using robots and rockets into outer space using robots which means that the quality will be very consistent and this is causing restructuring. So graduates who are used to jobs waiting for them, they want to do jobs beneath them. So they're doing masters and PhDs and parents don't mind their kids being at home because it's one child family. So yes, it's true the unemployment is high among fresh graduates, but you don't see hardship and families are not completely unhappy because they don't mind having their kids at home to help to being around helping their parents with various things and working online. But there is massive restructuring going on.
Thank you. Um maybe just a short um view on how you see India uh and the growth. Obviously we heard that uh India's population surpassed that of China um last year albeit that the GDP is still at around 4 trillion which is less than 25% of that of China. But how do you see it shaping um global trade relations?
Well, GDP in nominal terms is uh is distorted by exchange rates. IMF last year put out the major economies by PPP. So nominally the US is about 25 trillion, China is about 18 trillion. But in PPP, China is 40 trillion. The US is 30 trillion. Europe is 20 trillion. India is about 15 trillion. You've got to correct for the fact that with a $100 euros, you get much more in China than you would in America or Europe. In fact, you get you you you buy a lot of goods and services with 100 in China much more than you would in say in the west. So PPP is important and India's PPP will continue to grow it you'll be it will grow in a very different way from China. The urbanization rate is still much lower than in China which is 70%. So India is still very much a rural economy and if you have a bad monsoon the GDP is affected. If you have good monsoon it gives a big boost to the GDP and for India any political party which mismanages rural politics will lose power and that's the reason why India pulled out from RC because it was was very worried about the rural sector. The Indian economy is actually doing reasonably well and better from a year ago. But it's higgled piggledy and it's very different from China. Liqu used to say you should never speak about India and China in the same breath because that deceives you into thinking that it's kind of a similar kind of growth. India is all over but it's organic and if you're in Gujarat it's Gujarat. Even in Tamiladu is Tonadu. They're divided by cast, by language, by different cultures, by religion. Whoever operates in India must be prepared to get their feet wet and understand India and not think that from behind a screen looking at numbers they can invest in India. That is that is very dangerous. You want to be exposed to India, go to India. Get used to it. Learn to like the place then do India. China is simpler but not that simple either. To think that you can behind a screen looking at numbers and alphas and betas and move assets around. You can do that for Singapore, maybe Hong Kong, US, Europe, but do that at your peril in Asia because in Asia the numbers do not tell the whole story.
Yeah. Thank you. Maybe we move on now from that sort of global political backdrop and maybe help some of the senior managers here how to manage during what I've phrased as perma risk. It's a permanent risk that we're operating in. Um, how can you see international companies, especially those based in Asia, navigate all of these power shifts between India, China, US and the West?
The ground everywhere is shaking. It's almost as if the plates are moving. So, we are entering a seismically active geological period. You can't stop earthquakes. When when you think that we we are entering a seismic seismically volatile period, what do we do? I think take smaller steps. Take smaller steps and don't build structures premise on stability. Build structures which assumes instability. there earthquakes. So structures which flex instead of one big block you build smaller blocks linked together you know by in different ways. So even if the ground moves you can flex with the ground and wherever you are go local be grounded. They interviewed me about CSR because Seos is making a contribution to Viva Foundation which my wife established after our son was saved from childhood leukemia at St. Jude's Children's Research Hospital. So charity saved his life but not many families who have access to the networks that we had. So, we felt a strong obligation to help others in similar need. So, the reason why I'm here is because I'm supporting my wife's charity. And and she started one for Hong Kong for China because when I was working there, we want to do something there. And she's not established something for Indonesia. But wherever we are help the local community which gives us our profit and our revenue then there stability then people will say yeah we hope you'll do well because that means that we are doing well but if international companies are seen as profiting at their expense then that's ugly side of capitalism. people will begin to resent it, especially in a crisis, and say, "Hey, you're just exploiting us. We'll we'll support the local guy instead." And you don't want that. So, wherever we are, go local. You can be an MNC, you can be a Chinese company, wherever you are, go local. The Chinese companies are learning how to go local in Europe and America because they know politically they're facing flag. Western companies have long done CSR and are doing more now. Chinese companies are also learning to do this and Indian companies somewhat behind also learning to do this. I think this is the new world we're entering. Take smaller steps, be able to flex, be grounded. I think South Korea have learned their lesson in the US having had half of their car manufacturing staff deported back to Soul. So, uh, it was it was traumatic for them. Yeah, very traumatic.
Um, maybe slightly left field and I'll go back to one of my optional questions. Um obviously you mentioned the um Belt and Road initiative from China and they've been very uh aggressive expanding into South America and Africa and there's been an emergency an emergence of an alternative financial system the digital one. Um, are we going to as businesses have to start trading in alt currencies like the digital one?
The US took over from pound sterling as global reserve currency. The idea of a global reserve currency is is an aberration in history. When Marco Polo arrived in China, he wrote about it in his memoirs. For the first time, he encountered paper currency. He's a Ven. He was a Venetian. And Venetian only trusted gold. Paper. How can I How can paper be a substitute for gold? But the paper had a big chop. It was the emperor's chop. and the emperor can can kill you which means that that paper has backing right. So behind fiat currency is the ability to exercise power raw power. The American dollar is maintained by 800 military bases around the world. Think about it. when the basis start to close because the deficit cannot be get is getting worse and the interest servicing on American debt has already overtaken US defense spending so it's not sustainable so sooner or later you'll come to a stark choice between guns and butter for American voters at that point bases will begin to close just as British bases started closing after Suez you grew up son of an RAF Flight squadron commander near where I live at to estate. To estate is where RAF Sabatans had the quarters. Where I live slightly uphill was where senior officers had their bungalows and the flag officers had their bungalows at ferry point number one to number seven. They're still there. They're still there. all the area with SCF they were something like 20 30% of Singapore GDP in 1968 Harold Wilson announced pullback evacuation from Singapore Liu was in a panic he flew to London pleaded for an extension and was given three years three more harvests that mattered a lot to Singapore at that bases are expensive and at some point in time can America sustain these bases so he's telling the Europeans the Japanese Koreans cough up cough up okay let's say the Germans cough up 5% GDP every year after 20 years you tell the Germans you don't buy Russian gas you do this you do By that time we very you would be a very muscular Germany and you'll say no I don't think that's in my interest the power is shifting. So this is the world we're entering and when we talk about currencies everybody worries that at what point will the US dollar break? We all know it will break one day but it may not break for a few more decades you know so live on we we don't know when the cookie will crumble or how it will crumble so now we have cryptocurrencies Bitcoin and gold is steadily going up the Venetian instinct is coming back why because everyone worries about fiat currency, Bitcoin. I've been often be asked about Bitcoin. Is there violence behind Bitcoin? No, there's no violence behind Bitcoin. Is there intrinsic value in Bitcoin? None. Can North Korea hack into Bitcoin? Yes. Therefore, can America hack into Bitcoin? Of course. Can Russia? Of course. Can China? Of course. So, I said, "No, no, no. I'm not going to Bitcoin stable coins. Well, it's okay if you see it's backed by US dollar, but it's still US dollar. If it's backed by Roman, it's Roman MP. It just facilitates transaction. But it means that you can bypass Swift and American control is not just in a currency, it's in the settlement system, in the banking system. So digital currencies may well weaken the American strangle hold over the financial network. So these are risks which everybody worries about. People talk about it over whiskey. They they say ah it won't happen yet. Don't worry. Well, then maybe it happens. So people kind of take precautions and I think that's the right attitude to have. Take precautions.
Well I think we might have to close early so I can sell my altcoin collection. Um but uh we've we've spoken about tectonic shifts in the way that uh trade is being played politics. We've talked about um digital currencies and the dominance of currencies may be failing. Um, how how can corporate leaders create an early warning system and plan for political and trade risk for what? Um, how how an early warning system for corporates? How do they how do they structure something like that to try and plan? Um, obviously we can never plan for a black swan event, but we can certainly see some of the tectonic shifts in trade and politics. How do we plan for something like that as as a business leader?
I think go back to u geopolitical scenario analysis. Uh there are no crystal balls. And if someone offers you a crystal ball, be very skeptical. It's a point of view. It's a lens. It's hard to predict the weather. But you have a sense of climate. So this is September. It's going to get colder in the northern hemisphere. So, better get your winter clothing out of the cupboard, air them because you're going to get cold. But next week, who knows, you may need your swim trunks. I was in Croatia and suddenly I had to go to the shop and buy myself swim trunks because I wasn't prepared for such warm weather and it was too attractive not to get into the water. So the climate you cannot ignore. What's the climate? The climate is multipolarity which means an old system is breaking up not into chaos but shaking down into a more complex network with multiple nodes. That's climate. between now and then in this transition is weather. Can you predict Trump tomorrow, next week? No, you can't. But you know, he worries about the midterm elections because if he does badly in the midterm elections, the second half of his presidency will be worthless. So he can be sure that whatever he does, one eye is on the midterm elections. He will not say it. But that is a certainty. So that guides us as to our estimation of risk. Will he go into another war? We will threaten war to get a better deal. But we actually go into a big war which will get Americans so upset that they will vote out Republican congressmen and senators. He won't do that. He won't do that. Look at power. He's so angry with power. Why? because power worries too much about inflation. But inflation is a long-term concern. What he wants to get rates down, get the economy going, and then bring in the ves. But for us in the financial business, that's worrying because then the US dollar will eventually be affected. So that's I think the way we should approach risk. There are risks which are climate risks and there are risks which are weather risks. And be clear which is which is China rising? There's no doubt. Is China's economy this year better than last year? Maybe, maybe not. Is unemployment figure getting worse? Could there be problems in China? Yes. But if in 10 years time what will it be? It'll be a very big economy. In India Modi may win the ele the next election may not win the next election but in 10 years time where will India be? It'll be a larger economy and one you cannot ignore. So that's how I would view risk in terms of time perspective.
Thank you. I'm still not quite clear how we're going to run saviles in Asia Pacific over the next five years, but uh we'll work on a plan next week. Um maybe moving away from the corporate and more into Singapore. If I can sure offer a view, it's not my business, but but several maintain my apartment in Hong Kong. The middle classes in Asia are growing. That's for sure. China has been urbanizing. It's about 70%, you'll continue. India will urbanize rapidly. Southeast Asia will urbanize. They will have middle-ass properties and middle-ass needs. So this is a growth area for SEO. But every market is different. So you have got to be localized. That's good news. We have uh the largest strata management business both here in Singapore and also in Hong Kong. So uh yes, we take that as wise words. But moving moving back to Singapore, um it it's always prospered on how it's engaged globally. Um it's been very pragmatic and pro business in terms of its strategies. Um but as these uh tensions rise and god forbid if it's being asked to pick sides, how do you see it's going to manage over the next coming years?
No, no one's going to pick sides if if you can avoid it. If you have no choice, you have no choice. But otherwise, everyone will try to triangulate and keep all options open. And the US will increasingly itself get into that position. I was quite uh amused when u the pres the Filipino president went to the White House hoping to get tariffs sharply reduced because of the military alliance against China and Trump turned around and said no you should better manage your relations with China we're having better relations with China and reduce terrorists from 20% to 19%. So the US itself is triangulating. Trump from leading the European charge against Russia now wants to be a mediator and he say he stopped seven wars where he's a mediator. He wants to be in that position and that's rational because in a multipolar world the best strategy of the US in game theory is just to move closer to to everybody and on every issue by a slight shift of weight you can affect the outcome. This is enta optimal. You move into a balanced position then you're free to act. But if you think you can hold every other poll in a fixed position, you will exhaust yourself and you will fail. So without articulating it that way, Trump by his action is in fact now acting more rationally in the multipolar world by triangulating its position in every region in the world.
Thank you. Um I mean it's fairly well publicized that you know the cost of running businesses here in Singapore um continues to go up. Staffing costs, commercial costs, residential costs. Um how and we've seen quite a few companies start to nearshore into Malaysia, offshore into India or the Philippines. And uh I've even heard of a number of companies who were sending staff to Singapore now moving them back to Hong Kong because the trade is increasing there. How how how do you see the Singapore government managing this uh constant sort of growth of cost driven partly by the success?
Now high costs are a big problem in Singapore. I mean Singaporeans love it when they travel. And so many go to Japan now and they say, "Oh, the best omakas for half the price. The omacas business in Singapore has gone down." Many Singaporeans will hop over to Jaw to get the massages, to get their car fixed, to buy their drugs, just to have a good time, play golf because the price arbitrage is simply too great. The price of a car in Joho is less than one/10enth. The price of a property is maybe less than 110 foods one/ird. So the same thing which has caused Hong Kong to lose much of the vitality of its retail sector. I think will happen to Singapore. Should we stop it? No, I don't think we should stop it because it's good for Singaporeans to have more space and better access to cheaper products and services. I think it's good for Singapore, but the affected sectors in Singapore should be should be given help to to make adjustments. I see border crossings getting easier because with AI checking identity is much easier. So the idea that if you queue up just to establish your identity, do you really need all that when it can be done so much more efficiently which is what's happening between Hong Kong and Sunen? So as the border crossings become easier, the arbitrage opportunity will be too great and we're already seeing it because Joho is booming. Yeah, there's only one sector. There will be other sectors. So in the end, how does Singapore justify higher prices? You know, in some places in the world, in Europe, America, Japan at a water point, they make provisions for dogs. We've not yet we've not seen that in Singapore yet. I think we'll see that eventually, but maybe several should consider that for the properties you manage because that's very appealing to dog owners. Oh, well, no, it mean it means that you have a heart for dogs. Well, okay. So, Singapore will become more middle class, harder to govern because middle class needs are more variegated, more nuanced and therefore impossible to fully satisfy. But it justify higher prices and people will say no no I want a property in Singapore because it's a special place but for it to be sustainable the people who live here must be given a leg up which means that large sectors must be protected them which is HTB which is driving taxis which is many other things should only benefit citizens then there is a value to citizens ship for which you have got to do national service and other things. So as we become more middle class and more expensive the governance of Singapore becomes a bit more complicated. is a challenge, but it's a necessary challenge. And the more open we are, the more foreigners and foreign companies we have in Singapore, which means more tension, more conflict. And if we don't manage them in ways that we don't expect, they'll suddenly break out in riots in and unhappinesses. So constantly telling those who are better off that look you must you must have a heart for those not like yourself telling companies especially when you do well do something for the local community then it becomes organic then people say yes we wish you well because when you do well we our lives improve then this becomes a special society at the last general election the big the biggest issue was cost of I think Trump helped but Singaporeans in the end kind of distinguished between big issues and small issues and decided in a world which is marked by uncertainty better make sure that we get the key things right and gave Robert Lawren a big 65% support which which is reputationally very good for Singapore. People say, "Ah, it's stable." Despite rapid progress and uncertainty, the people hold together. But it's a challenge. You cannot assume that the next election will be the same. Every year, every month is a challenge. It's a challenge of leadership. It's a challenge of managing tendencies which are dividing us. You take AI. I think AI is very dangerous because people become redundant and we look at AI as a way to replace human beings then we shouldn't be surprised that there'll be a lad reaction against AI that hey this thing is a threat to us but if AI is a way by which lives improve then people say no no no all of us must must get into AI and AI enhances us as human beings. I saw an app recently about exoskeletons. You know, exoskeletons used to be bulky stuff which maybe commandos can wear to help them do impossible task. Now the AI exoskeleton in China, they're light. It doesn't require much training. You strap it on and after a while it knows who you are. And if you have bad knees and back hips, you can begin to walk and you can begin to run and lift products and they're not that heavy and they're going to get lighter and cheaper and smarter. So AI not in terms of whether it's grock or claude or or chat GPT or deepseek but AI in terms of how it can be applied to make life better in all its aspects from production to locom motion to to to environmental control to anticipation of sinkholes to traffic management to car maintenance to everything then our attitude to AI will be very different not in terms of how many people can be replaced but how every human life can be enhanced that someone who's who's trapped in a wheelchair because of diabetes or whatever cannot walk and therefore less reliant on children and family members to apply for leave to take them out for an outing. So it requires a different mindset towards technology and it requires education. So I had a friend in Hong Kong who's working for the Shienha authority and I visited him a few months ago. He said all of them in the Shenhai government which is a part of Sensen had to attend a twoe course in AI. They want all civil servants to learn AI so that they know how to manage AI companies and AI technology and how it can be used to benefit everyone and not to threaten people. It's something that we have to think about in Singapore.
Yeah. And big fan of AI and I think it is going to be a struggle for everybody to accommodate the change that's coming. Um but maybe picking up on the the border crossing uh and the ease with which you say it's now becoming to in terms of get getting over to Jor. We heard the announcement of the Jour Singapore special economic zone. Um and we've spoken about maybe nearshoring some of the services that are currently done here in Singapore. There's been I suppose an equal balance of enthusiasm and skepticism. Um how do you see that playing out because of the circumstances of separation in ' 65 and memories of conflict and tough negotiations.
So for a long time we couldn't even resolve simple things like the railway land. But since then the big problems have been resolved and the more recent prime ministers of Malaysia with a notable exception of Tun Mahadia have been in favor of closer collaboration within Singapore and Joho. And now we have a sultan who's aong who has every vested interest in seeing closer cooperation. And we're seeing it now. And I think it's good for both sides. But it's got to be managed on both sides because the easier the access, the more resources will redistribute. Then there are sectors in Singapore which are affected. They must be looked after. Then on the Malaysian side, there will be many sectors who should be affected. Jaw is booming but not for everybody. And so you can expect a reaction on Joho side and if the reaction is along racial lines because the Chinese in Malaysia benefit more than the Malays Joho, the Chinese in Joho benefit more than Malays Joions and it will not be sustainable. So they will they on their side. We have to manage this and in a sense we have to help them manage it and they have to help us manage it. Then this greater collaboration will be win-win and we minimize the lose loose then it'll be sustainable. But as in all matters, it requires active minds being sensitive to problems even when they're just emerging and acting in anticipation of them getting worse. And being sprry enough to recognize that whatever preparations you make, you always be surprised and be very quick to react to problems you didn't anticipate erupting suddenly. have the attitude and it must be on both sides.
Thank you. And of course it also requires Singaporeans who go to Jaw Hall to behave well and that point should should not be cannot be overemphasized and not bring back anything in the back of their car and not bring back too many things. The whole pleasure of going across is to bring back stuff whether inside you or in your trunk.
So one final question on Singapore and what I love about Singapore is its ambition and attempts to continue to strengthen its status as a global city and serve as a location for regional headquarters. Is this a realist? Is is this realistic or will Singapore continue to act as a sort of gateway to the Ashen region and uh those headquarters that find it affordable enough to be in?
I would say at the heart of it is culture. This has to be a culture which accepts you for who you are. So you come from Britain, you come from America, from Japan, from Timbuktu with your own tradition and habits. You say no, you're welcome here. But which at the same time puts upon you an expectation that you that you that you behave know that you are in Singapore, we don't insult one another. We don't go around procelitized and we know that we have different dietary habits, different taboos and and that expectation must be on all those who come here to work, to invest, to teach. But the overall attitude is a welcoming one. And the attitude is we welcome foreigners and foreign companies because they are blessing to us. And foreigners and foreign companies who come here feel that yes we are blessed by the local people. Easy to say there always be problems. So it requires constant management and attention to problems when they arise. Yeah. And there will always be problems. But if we have a habit of addressing these problems and not letting it get out of hand, then this would be a remarkable place because you can't find that in most places in the world. I was in central Europe. I did a trip which began in Luxembourg. I went to Tria to visit Kmak's house. Then saw the saw the old Roman gate, the Negra Pota. Then took a flight to Prague, spent one night in Batislava, then drove to Zagreb, went to Eastria, and then took my flight home from Trieste. It's a very Catholic part of Europe. And apart from trieste you had a sense that you're in homogeneous society people there's a sense of community you are you are in Luxembourg you are in in Czech Republic in Slovakia you know and you are foreigner you you learn to say yes know what are the local norms and you kind of conform but today if you go to a city like New York or Paris or London. He say, "No, I I can be who I am. I disregard the fact that I'm in America or Britain or or France because there's so many foreigners here now. I form my own local communities. So, it's not a surprise that the local inhabitants are now reacting against it and the central Europeans have decided that they don't want to be like that. So, Singapore is between and between. We don't want to lose our own sense of self but at the same time we don't want to close in and we can only maintain that balance by having a certain attitude and certain disciplines and requiring of those who come here a certain attitude and discipline also then it can work but it's a challenge.
Yeah. Find balance. So, thank you. That wraps up the one hour of conversation. Um, and I will open the floor up to questions. Um, there'll be a number of spotters with microphones who will come and see you if your hand is up. So, can the Saviles members grab the microphones? We've got one over there. Whilst we're waiting, um, maybe I can ask one of the one of my favorite questions that came in from the RSVPs? um from Linhawk uh Ebridge Preschool. Um in your 1991 speech, you spoke about the need to prune the branch tree, a metaphor for reducing state dominance to allow civil society to flourish. Looking back now through the lens of your book Bonsai, Banyan and Tao, how has your understanding of governance, balance, and openness changed?
This is a balance which has to be tuned and retuned all the time. You can't do without government. I don't subscribe to Milton Friedman's view that government is in position. Ronald Reagan said the problem is government. Uh because we are from an Asian particularly from East Asian tradition where the best minds for 2,000 years for more than 2,000 years has been applied towards the challenge of good governance. That that is a central issue of civilization. How do you govern? And if you can govern well, you can govern large numbers. If you can govern large numbers well, you can have a division of labor which makes you much more productive that societies which are not able to go beyond tribal affiliations. So we inherit an East Asian tradition where some of the best brains go into governance. But governance not to impose a hierarchical system of production organization but one which allows people to exercise their freedoms and initiative. So Lau said governing is like frying small fish. If you overfry a small fish it's not edible. If you underfry it is dangerous. But how to do it? like the the gooning fish for Nasama, you know, it's just perfect. It's not burnt. You can ch the bones. You can still eat the flesh. That's an art because every fish is different and you must see and stir it just enough. Governance is like that. The idea that government is always bad which is which found favor among the monetarist at some point in time I think that is ridiculous you know but at the same time a Stalin Maui system that won't work either and China is constantly trying to find the right balance we are constantly trying to find the right balance as companies as families as unities ities. We're all trying to find the right balance. You want enough central direction to give people a sense of purpose, but you want enough freedom so that people can exercise initiative to disagree and for new directions to be found. Yeah, there's no standard answer to this question.
Yeah, good. Maybe we have a question over there. Hi, my name is Phillip and I love all your insights uh especially through the cultural lens. Um we are seeing a really turbulent financial environment uh where gold is rising and uh we are seeing a lot of dstability in financial environments and central banks around the world are doing their best to to do as much as possible to support social demands. And uh there is a backdrop of possible layoffs, threat of AI. So we possibly can see a lot of instability in currencies in debt prices in the next 7 to nine years probably possibly after the end of the Trump term. Would you foresee a scenario and this is a a little far off but love to hear your advice and your perspective where central banks are really exhausted from a 7-year recession possibly after the Trump term from 2027 and will there be ever a possibility where central banks banks actually lose their credibility? The the currencies just break and we have a new regime, a new financial reality, a new global digital currency where where we just adopt a new one world government currency? just
This is so utopian, so so far off, but love to hear your views in terms of how countries can accept such a reality, just for entertaining our acceptance of this, and your perspective.
Well, at one level it's entertaining, but at another level, it's dead serious because it's our blood, sweat, and tears that we're talking about. So, if you hold money which becomes worthless or devalued, that's serious business.
I think history is a useful guide. I think for most of human history, the world has been messy, and the world we're entering is also messy. So, the last 50 years may not be a good guide to the future. So, the better guide to the future may be the world before that.
So you have Venetian, you have Marco Polo and Venice, you have a duck. This is good. This is good. Go. No, you go to China and say, "Oh, that's this is Koblan's chop on it." It's okay. That's that's good. Then you go to another kingdom and you have paper currency. You say, "I don't recognize this chop. I'm not accepting this currency." But say the local people accept it. You say, "Okay, okay, I use it for the time being, but I'm not going to hold it. I have it. I quickly pass it on." Right? It's a little like stable coins. You have it, you pass it on because you don't have to worry about what's the underlying asset. But good for the short term.
Then you go to another jurisdiction. You come down to say Majapahit, and they use Chinese copper. Okay, Chinese copper is good. It's good copper. It's all right. It's not like gold, but it's good enough. So, you learn to accept different currencies. So operating in the multicurrency world, some paper, some fiat, some digital, it may include bitcoins, it's okay, but balance the risk. Don't be completely in gold because that's not liquid. Don't be completely in, I don't know, in currencies from dubious banana republics. I take banana currencies, then you say, "Okay, for as long as I have it, I quickly change it to assets." But I have US dollars now. I say, "It's not bad, okay, but bear in mind that it may break." Then you have RMB. You say, "Oh, okay, China is still strong, but for how long? And I can't take it out of China." So that's a minus. So you say, "Okay, I need so much in China. So I have some in China, but some out of China." So we've got to learn to deal with that messiness, which is a messiness Marco Polo was used to dealing with. And if you can't deal with it, then don't be in that business. I think anyone in international business has got to deal with messy currency situations.
The days when AML laws can be imposed on every country because tax authorities want to be able to tax you. I think they were increasingly free. So when you have SCO and BRICS and a desire to create an alternative settlement system, what are they saying? "I will no longer be under US jurisdiction, and we will create our own rules." Yeah, it may not happen immediately, but we are tending in that direction. Thank you.
Do we have other questions from the floor? One over there? Thank you. Thank you. And thank you, Saville, for organizing this. And thank you, Mr. Josh here. Thank you. So far away, we can barely see you. Don't worry.
Can I ask how will Singapore be like when there is a 10 million population? It depends on infrastructure. If you have good infrastructure, I think you can handle 10 million people and still feel comfortable. But if you don't have infrastructure, even a million people would be unbearable.
I remember a conversation Rupert Murdoch had with Lee Kuan Yew, and Rupert Murdoch was talking about Singapore at the end of the Second World War and how crowded and poor it was. Singapore's population was maybe half a million at that time, and we saw pictures of Chinatown and Singapore River and the slums. Yeah. So it depends on infrastructure and technology. Now allows us to do things which you could not do before, including improving underground environments and piping in sunlight underground. It used to be that you could only do it with glass. Now you can do it to a certain degree with plastics.
So if we design cities with a high population in mind, let's say we design a city for 10 million, 15 million, that even with $50 million, you have full soccer pitches at certain levels and bicycle lanes topologically separate from car lanes from PMVs, and you don't reach 10 million, you reach 7 million. You say, "Wow, this place is so spacious." But if you plan for 5 million and you reach 7 million, they say, "I better leave this place. It's just too crowded." So the key is infrastructure and good planning because if you plan ahead, then you can develop the infrastructure stage by stage at lower cost. But if you don't have a plan for a larger number, to retrofit is very expensive and very difficult.
So we must have a three-dimensional master plan which goes underground and which includes, as the Chinese call it, a low-altitude economy, which means cars which can fly, delivery via drones, and enabling individuals to have local motion, whether it's with exoskeletons or with PMVs or with bicycles or whatever, but it requires traffic separation. It costs money. Yes, it costs money. But if we create something special and people can come together and live well, then it can be justified. So you compare the infrastructure in Singapore to that in other cities in Asia. Why do we command higher prices? Because the place works. If it doesn't work, it'd be cheaper. So the easiest way to bring down prices is to make the place work less efficiently. I mean, it's something to think about.
I think we have a question over here. Hello, Mr. Yo. Always so nice to hear all your insights about what's going on. I can't imagine how you can hold all this in your mind. Your brain must be so powerful. But can I just ask you two questions? You talked about the new reality in the world is a multipolar system, and you talked about the challenge of the middle class is more and more difficult to please. And Singapore, the per capita income is very high, I think we all know. And Singapore is a small state, and we know the challenge of a small state. And I think one of our leaders, the PM, has said that we must keep Singapore exceptional. That is how you keep Singapore going and have a place in the world. Can we do that? That's my first question. And how do we do that? Then my second question is, Hong Kong and Singapore are always being compared, whether as competitive or complementary. Can I ask you that, in your view, has Hong Kong lost its mojo? Thank you.
Well, whether we have the spirit to continue addressing challenges and being creative and solving problems and harmonizing conflict, that is a matter of culture and a matter of almost spiritual inheritance. You know, if you feel that your ancestors have overcome these problems before, then we say, "Yeah, we are of that tradition, we can do it." So there are problems, and we say, "Okay, we put our minds to it, apply technology, and find a way out." It's a kind of faith in ourselves. And this faith in ourselves is very important. In other words, it's not just developing the potential of an individual, but it's developing the potential of an individual in relation to how he works with the people in his community. So there has to be a Singapore spirit which says, "Yes, this is our history. Before independence, we had a history, and we are Chinese and Indians and Arabs and Malays, and we have done great things in the past. We feel we can do it." It's faith. And faith is very important. We know that in many situations, if your morale is low, the world looks dark. You're not creative. You get quarrelsome. There's a negative charge, you know, a feel. People get angry with one another. They get irritable. But if the spirit is good, like in strong families and in good companies, people say, "No, no, no, no. Let's sit down, lay it out, do a proper analysis, step by step, find a way to the future." Is it guaranteed? Of course, it's not guaranteed. They say from slipper to slipper in three generations. What's behind that wisdom? Behind that wisdom is the fact that if you allow wealth to corrupt you and become lazy, then you go back to the slipper. But if you don't take liberties with yourself, but make sure that children are well brought up and disciplined, not by lecture, by punishment, but by example, then it gets passed on down the generations. No, no, we don't live like that. We are not fleshy. We may be wealthy, but we are not fleshy, and we look down on those who are like who behave otherwise.
So can Singapore maintain that spirit? I think we are accumulating it. You can never be sure. It's like parents who never stop worrying. The day you stop worrying is a day when you should really worry. Think about it. If you stop worrying, you're going downhill. So we should never stop worrying. So it's good that you raise that question because that question should never be off the agenda.
The Hong Kong people are like that because they accumulated it in Hong Kong because of problems in China. Wave after wave came over. So they are steady. They are very independent. The problem was there's a Hong Kong spirit, but the British never nurtured a Chinese spirit. So they kept Cantonese. They kept them separate. There's only the memory of the Opium War and historical injustice. After Huay, after '97, in the initial period, nothing was done to the education system. So I had a young middle school student who sought me out as an advisor. He told me 80% of his teachers were anti-China. In every university, you had to commemorate Tiananmen in order to be a student leader. In other words, to qualify as a student leader, you had to be anti-China. So the result was the problems that we had first with the anti-national education movement, the Umbrella Movement, and finally the troubles of 2019. Said Hong Kong people govern themselves, but it's conditional upon Hong Kong people loving China and loving China first, then loving Hong Kong. So the mainland will not send people from the mainland to govern China, and China will not tax Hong Kong. That's in fact a very good deal because China provides the overheads. So all that is being put right after the national security law was built in. I don't know. In the West, they say there's a return to one country, one system. It's entirely untrue. I go to Hong Kong six, seven times a year. I have an apartment there, run by Seibu. I mean, it's completely different from the mainland. Of course, it's part of China. And unlike Singapore, you don't have to spend 6% of your GDP on defense. You don't have to set aside land for power stations and for reservoirs. So Hong Kong has it made. The danger is where you lose its spirit. No, I don't think Hong Kong will lose its spirit. If you ask me, the Hong Kong spirit is stronger than the Singapore spirit because it's forged in years, generations of hardship and struggle. So there's a tenacity in the individual Hong Konger and in their families which we wish we have in Singapore. I had a sense of Singaporeans and Hong Kongers working for me when I was in Kerry Logistics. They have different qualities, and I think Hong Kong will continue to do well. I'm not selling my apartment in Hong Kong.
I think that's a very honest and insightful view on the differences between Hong Kong and Singapore. I've spent equal amounts of time in both over the 35 years in Asia, and I agree. My son has just started work in Hong Kong, and it remains an exciting city. They fight for every opportunity. And it is a contrast to Singapore, which is a stable, safe country. So I think your views are very insightful. Just on a time check, we've got a few more questions. One over in the corner. Yes.
Hi, good evening. Thanks, Mr. Yo, and Saville for this really interesting and insightful event, and your views are really, really interesting. I have two questions. My name is Leonard. I'm working in an Italian asset management firm, and we work with several family offices in the region. And several of them have actually settled down in Singapore in the past years, some even during COVID. And often I get asked this question: How is Singapore's landscape evolving in terms of how do you stay relevant as a country? Because obviously, there's price competition, there are so many challenges going around the world. And how is the political system also evolving, right, with this new 4G administration now in power? And that's my first question. The second question is, you know, what is Singapore known for? So, for instance, an example from a family office that I work with started a media entertainment company in Singapore, right? And they say that Thailand, for instance, is well known for service, right? Or Vietnam is well known for certain services or certain cultures. But Singapore, according to this family office, seems to complain a lot, right? The jokes around selling T-shirts, "We are a fine country," and complaints are a national hobby, a national pastime. How do we change the mindset of Singaporeans to adopt a more forward-looking culture and mindset? And what does Singapore want to be known for in the future in this evolving landscape? So, sorry, a couple of questions. Hope you can share with us your views. Thank you very much.
The entire world is in flux. So it's natural that in Singapore, there's a sense that everything is changing, and many of us feel unsettled by the changes and worry about them, and worry even more for our children, whether they can adjust to these changes. Then we look around and say, "Well, but everybody's got to adjust to these changes. So we're not alone." And they said, "When everything is changing, we must have a point of constancy." As they say, a point of no change, helping us manage 10,000 changes. And that point of constancy should be our moral quality. Which means being strict with ourselves, education, saving, compassion, family, proper behavior, standards, and passing it on and expecting of one another. I think if we have that, all the other changes are just tight movements. Be centered in the basics, and then be completely light in adjusting to change. So don't be emotional. Oh, we must have a petrochemical industry or pharmaceutical industry, or we must be good in this or that. No, I don't think we should have any emotional attachment. How do we make a living? By serving others. If we don't serve others, we don't eat. It's as simple as that. And I think that is a good reminder. If we have a big inheritance, then of course we don't have to serve others, we just eat off grandfather, you know. But if we don't have an inheritance, and Singapore has no natural resources, no rare earths, no oil wells, no nickel mines, no vast prairies, so people all here know, you don't work, you don't eat. So you have to serve people. When you arrive in Singapore, when you are in Changi Airport, you know, in many places, airports are unpleasant. When you clear customs, you're a bit tense because they look at you, you ask a question, they don't like the answer, they give you trouble, and so you are well-behaved. If you're running a shopping center, will you ever do that to your customer? No. We want footfall. We're smiling at you. It doesn't mean that we are not worried about security, but it's a service orientation. Singapore must always have that. If we think that we don't need others, then we don't eat. So we want something to serve. So we must always serve others and serve ourselves by serving others. And if we do that, the world changes. We say, "No, we can't make a living here anymore because they can do it for themselves." Ah, in this area, because of changes, there's now a domain shift, and therefore an arbitrage opportunity. We can provide a service there. Then we make something for ourselves. We should always be a place where you can buy cheaper and sell dearer. Whether it is a good, a service, a financial product, where you can buy cheaper and sell dearer. It's a service orientation. And in the end, we serve by arbitraging the inefficiencies, the domain differences around us. And since the world is in flux, in fact, the opportunities to make a living by serving others may in fact increase. So it's not that a world in flux is bad for us. If it's too stormy, of course, it's bad for us. But a world which is in flux may be a good thing for us, provided we stay alert. And in all the domains at which boundaries we interact have their reflections in Singapore, we're in business. So we've got to bridge China and India, and the Chinese and Indians are in Singapore, and we can deal with both, and they don't kill each other in Singapore, we're in business. Perfect.
One final question on the left-hand side. Hi, Mr. Yo. Thank you for your time today, coming out and sharing your insights. It's been quite interesting for me to digest. So, in recent days, I have witnessed what is, in my opinion, the most surreal United Nations General Assembly proceedings in recent times, and that is to me very symbolic of the ongoing breakdown of the post-1945 world order. So my question is in two parts, and it draws from remarks made by Minister Vivian Balakrishnan, where he called for some reforms to how the Security Council members use their veto votes, and also from a question that President Trump posed to the world in the General Assembly, where he questioned the continued existence of the United Nations itself. So the first part of my question would be, in your opinion, what kind of reforms might be suggested to improve these global institutions for global governance? And if President Trump's vision, a rather scary vision, were to come to pass, and these institutions were done away with ultimately, in your estimation, do you think we would revert back to a sort of balance of power approach in world politics with a more regional order, or is it more bilateral, and maybe the key players are the middle powers right now, like Brazil, India, Turkey, for example?
The United Nations was created after the Second World War. So the victorious powers have veto powers in the Security Council. There have been various attempts to change the structure. It's not going to change without another global cataclysm, you know. No one is going to volunteer a change, and the veto powers can veto whatever change is against their interest. So there's no point talking about it. The US is now behaving in a more selfish way, taking a shorter-term view and being proud of it. So we could live with it. We can't change the US with it. It may get better after Trump. It may get a little better after Trump, but that's a general direction they're moving. So we have this old structure. It's creaky. It's leaking. We can't rebuild it, but we don't want to tear it down either because it's still serving us in some ways. So what do we do? We say we better have other structures to meet our needs. And in a world where it's almost impossible now to have global agreement, then we should work on our regions. So the region was stable. It's like below that big structure, we have our own little pavilion, and there's waterproof, it's air-conditioned, it's okay. It's all right. So I feel that especially when the 800 military bases cannot be sustained indefinitely. So sooner or later, some pillars will collapse, and some parts of the roof will come down. But if we have a regional structure, that's okay. That's okay. We'll be all right. So I would give a lot of attention to regional stability, which means ASEAN. ASEAN is not a pattern on you know, it's not marble, it's a bit of a type structure, but it's okay. It provides shade, it provides some shelter, it's cool, it's pleasant. It leaks from time to time, so we'll patch it up. Yeah, I think ASEAN is fine, and ASEAN should always hold together. And we hold together by making sure we're neutral. We welcome China, India, US, everybody can come here, be accepted. We have good food, we have very nice climate, we are very good in service, you know, we don't like to say no, but we hint at it. So I think if we can maintain that instinct in ASEAN, however the world changes, we don't get embroiled in their quarrels, we don't get sucked into the conflict, then we maintain a regional stability, and that regional stability can itself conduce greater stability in the wider region. So in the years when I was Minister for Trade and Industry and Foreign Affairs, the first circle of our economic and political diplomacy was always ASEAN, and should always be ASEAN. It's more important than many Singaporeans give it credit for.
Well, thank you. That brings this evening's session to an end. And I would like to say thank you to a few people before I thank Giorgio. To all the Saville staff for pulling this evening together. It has run seamlessly. So, thank you, and all the support staff on the cameras, etc. I'd also like to thank Viva. We're very proud to support the charity. There is a QR code on the table. I'd please ask if anybody wishes to donate. It's a fantastic cause. And George and his wife worked tirelessly to make that a success. And finally, to thank you, George, for a spectacular evening. I've sat here, nervous, but I didn't have to be. You have, there was silence in the room after every question, and everybody has been listening to every word. It's been an exceptional evening. I've thoroughly enjoyed myself, and I think a big round of applause for George. Thank you.