Transcription
Good afternoon, ladies and gentlemen. Um, thank you, Minister, for joining us today for this fireside chat. Um, because we, time is, >> yes, >> time pressure. >> So, um, Minister, would you first like to make an opening remark?
Uh, let me try to quickly gallop through a few points. Now, I know you've already had very good morning sessions, and I hope you've listened to them, and you've got more to come in the afternoon. But what I wanted to start with is to get all of you to take a step back and take a historical perspective. What happened in 221 BC? That's a question. So, I'm going to do this as a series of questions. 221 BC, what happened? You, I think, better game to answer. What happened? Right. My pronunciation's bad. What is his most famous achievement? He reunified China. What else? Imposed a common script, which, in a sense, we still, depending on your perspective, labor under or still maximize the advantage of a common script of China. What else did he do? Great Wall. Basically, the point about 221 BC is the political imperative for China to maintain territorial integrity, to maintain unity, whatever it takes. Okay.
Next date I want to ask you, what happened in 1433? 1433, what happened? Okay, first, which dynasty is this? Ming, right? 1433. Doesn't it sound familiar? Okay, I'll give you another clue. Admiral Zheng He. It was the end of the seventh expedition. Actually, 1433 is when, you know, the eunuchs in the fleets, the scholars in the treasury, and they persuaded the emperor to burn the imperial fleets. Waste of time, waste of money exploring the world. That, in a sense, I use as an example of China deciding, "I've got nothing to learn from the rest of the world. I have reached the zenith of civilization, and all these guys wandering across the oceans wasting time, wasting money."
Next date, 1839. I think >> 1840. >> Yeah. Leading on to 1840. What, what does that remind you of? It's the Opium Wars, right? But, and this is already a different dynasty. This is the Qing dynasty, right? But what does that represent? Is that between the Ming and the Qing, by the time the Opium War came about, it's worthwhile remembering what was happening in Europe the preceding centuries in Europe: the Age of Renaissance, the Age of Science, the Enlightenment, Reason, the Industrial Revolution. The reason why I am speaking English, and many of you here are speaking English either as a first or second language, is because the Industrial Revolution began in England, spread to Europe, and the ultimate winner was the United States of America. But China missed it. And 1840, the Opium War, marks the lowest point of Chinese history in a couple of thousand years because we missed the Industrial Revolution based on science.
Next date, 1868. Does that ring any bells here? I'll give you a clue. Not China, but a neighbor of China. The Meiji Restoration. You see, what happened in that period from 1840 and 1868 is that the Europeans, on the basis of science and technology and oceangoing ships, had come out to Asia to colonize us, to take our natural resources. And of course, they had reached China and Japan. But here is where a fork in history took place. In the case of China, Ming, they tried to conscribe foreign expeditions in China. So, for instance, the Canton, Canton, Canton, Canton, Canton, Canton, Canton, Canton, they tried to confine the foreigners to these places, and the imperial dynasty then was still in a defensive posture. "Keep foreigners out, limit them. I still refuse to accept that the world has changed, and actually, I'm on the way out." In the case of Japan, the Meiji Restoration, in fact, it led to an overthrow of a dynasty early. I can't remember the name, Tokugawa or something like that. But Japan was the first Asian nation to industrialize, and they copied the West. In fact, they copied the West too much. So by the time 1895 came along, not only was Japan industrialized and militarily strong, it decided, "If the white man can build global supply chains on the basis of empire, so can I." And you saw in quick rapidity, Japan took Taiwan, took Korea, fought a war with Russia, which it won, and of course, began Japan's aggression to China.
Now, and then we can talk about the Second World War, and now we just had the 80th anniversary. The point I wanted to raise, like jumping through all these quick historical things, is can you discern some trends? Because apart from the headlines which you read about and all the, you know, the diplomatic things, understand the deeper underlying tectonic forces which history has actually revealed. I would say, number one, is technology matters. Number two, a closing of the mind, erecting walls, and being defensive is a mistake. Number three, when walls, you know, and later, I think Ray, you can have a session with Ray Dalio later. I can almost recite his talking points, but he will tell you about the potential for both economic cataclysms and military, which usually follows these periods of great depression. But the point I wanted to make was that what happened in the last 80 years was that when America won the Second World War, it was a very unusual winner because the defeated countries, Germany and Japan, were rebuilt by American generosity. The Marshall Plan uplifted Europe. Yes, there was a distraction from the Cold War, but we all know communism as an economic paradigm didn't work. So by 1990, Berlin Wall came down, '89. But 1991, Soviet Union cracked up. The point I'm trying to make is that actually, the last 80 years has been a very unusual period in world history where you had a generous victorious hegemon called the United States, which built up a so-called rules-based model of globalization, which we all benefited from. But the biggest winner in the last 45, 47 years has been China because Deng Xiaoping embarked on Gaige Kaifang, which is an opening of China. And what we are witnessing now, and I'm going to stop here, is that if I ask you the technologies of the future, who has mastered or who is more likely to take advantage of those technologies, achieve economic profit, which in turn means strategic advantage and potential power for the future? So maybe I'll stop there, but I hope I've given you enough, you know, breadcrumbs to draw some interesting conclusions.
Um, thank you, Minister, for starting off with, um, giving us this historical perspective. But, um, journalists, being journalists, have to pull it back to what's happening now. And I think a lot of the audience, they would like to hear, >> um, your views on what's happening right now.
So, what's happening now is the winner of the Second World War has decided that, well, I used to be 40% of global GDP. It was worth my blood and treasure to underwrite a generous rules-based system which allowed everybody to rise. But now that America is 26% of global GDP, it is entirely legitimate for the American voter to say, "Why should we pay? People are free-riding off us." Even the Europeans have said, "Well, we outsource manufacturing to China, we outsource security to America, and outsource energy to Russia." So America has decided globalization of the last 80 years may have been useful in the past, not now. China, at the end of the Second World War, maybe 1 or 2% of global GDP. Today, it's in the high teens, crossing to 20%. Right? And China says, "But wait a minute, I don't look in terms of centuries, I look in terms of millennia, thousands of years. And if you take a multi-millennial view of history, when it is at peace, borders intact, running a continental-size economy, has usually constituted within 25 to 30% of global GDP. So, China says, 'I'm entitled to that.' >> How can you tell me I can't, right? I'm not asking for any special favors. My success is my hard work and savings, and I'm not going to make the mistake of the Ming dynasty or the Qing dynasty, and I'm going to master technology, and I'm going to remain open to the world." So, from China's perspective, they're not doing anything wrong, but they don't accept an American-led, rules-based global world order. And then you've got all the middle powers, Europe. And then you've got India, Middle East, and ASEAN, which is a larger population than Europe, which, if you add up all our GDPs, makes us either fourth or fifth largest in the world. And we say, "Well, you know, if we play our cards right, we also can be a middle power." So we are now in a period of great flux, which is your theme, because the old presumptions, the old reflexes, no longer apply.
So, what's going to happen? First question is, what is going to happen within America itself? Whether it will still maintain the age of reason and science and business and innovation? Will it still be the master of future technologies? For America, actually, has some fundamental challenges too. China's per capita GDP is about $13,000 US. Well, I'd like to ask everyone here, in 1991, when the bubble burst in Japan, what was Japan's per capita GDP? In 1991, I suspect Rio, Ray, Ray can answer that. Answer: about $29,000 US. Which means when Japan ran out of babies and its workforce peaked and its stock market and its property market crashed, Japan's per capita GDP, I'm not even correcting for inflation and value and time value of money, Japan's per capita GDP when the bubble burst was more than double China's GDP in nominal terms today. So even China has got significant challenges to overcome, while China has got significant strategic advantages. So we will have to see what happens in China. For the rest of us, I think the fundamental questions still are: Can we master the technologies? Can we maintain openness? Can we maintain a rules-based world system that gives us all a fair chance to trade, to manufacture, to master technologies, and to get ahead? And there are some good old-fashioned values. There's got to be some respect for facts, right? It cannot be that everyone is existing in echo chambers and facts and science doesn't matter. Second, there has to be thrift. You can't spend more than you earn. And sooner or later, modern monetary theory notwithstanding, you know, you've got to come to terms with it, right? And if you earn more than you spend, and you're a net creditor, and you believe that we're now in a new technological revolution, and in history has shown us, in the early phase of a technological revolution, you normally get a gilded age. People like Ray Dalio become very rich. It takes time for those technologies to be democratized so that a new middle class can rise on the basis of those technologies. How long will it take us to move from that gilded age to a new GI Bill based on education? The GI Bill in America, post-Second World War, they expanded education opportunities to the returning GIs. It's raising the middle class, productive capacity, then you have a pro-growth economy, you get good returns on your capital, and you're not squabbling over the distribution of debt burdens between demographic groups or between the present generation and the future generation. So my advertising now, I can't help advertising for Singapore. In such an age, would you prefer to be in a place that is AAA-rated? In an age when return on capital exceeds return on labor? Would you prefer your state to be a net creditor or net debtor? In an age of a technological revolution, would you prefer to live in a state that is scientifically literate, that is organized on logical and rational terms politically? And in an age of interdependence, would you prefer to live in a state that is always scanning outwards, looking for dangers and opportunities? And in a time when the greatest challenges to the world, I believe, climate change, pandemics, AI gone wrong, the issue of managing the global commons is more important than ever before. So my point is, you know, don't lose hope in Singapore. I think we've got some fundamentals right, but we need to be aware of the larger currents around the world.
>> So, Minister, in this world of flux, >> yes, >> being a foreign minister for a small country, you said you were advertising for Singapore. >> Yes. >> Do you feel, um, so how, how do you make a tangible difference >> in foreign policy? >> No, no, it's not, it's not about me. Do you, do you feel more powerless, or do you think there's more opportunity? >> No. First, first is not about me. Okay. I'm a believer in, in appreciation of history. I'm a believer in fiscal rectitude. I'm a believer in technology, and I'm also a believer in relationship building. Uh, I think I've had a really exhilarating 10-year ride because I've had a ringside seat, you know, to a technological revolution, a world in flux. I've had the opportunity to meet and be in the room with all the key leaders of countries large and small. And I've been able to face both pressure and to withstand pressure, and to try our best to keep Singapore relevant, keep Singapore safe, and maintain Singapore's reputation for reliability and trust. And this is particularly important when your next question will be, how do you engage the US and China? With China, my paradigm is, I operate on this.
>> Maybe I ask my question. Okay, I'll let you ask the question. >> I can't help myself. >> So, I, I will go to China first. >> Okay. >> Um, I mean, this year marks the 35th anniversary. We all know that. >> Yes. >> Um, and having spent this decade with your counterpart, Mr. Wang Yi. >> Yes. Whom I consider a real friend. >> And I think you have met for not less than probably 18 times or so. >> I've lost count. I, I mean, I go to China every year, see him several times, China or other parts of the world. >> And, and with, with a, a younger new PM that we have now, engaging with them. >> You sit in the meeting rooms with them. >> Can you share with us your observations of? >> Well, first of all, this year we celebrate, we say we celebrate 35 years, but actually, >> you celebrate every year. >> Way back then, way back, right? You talk about her and the rest. I mean, there have been Chinese fleets. There have been Chinese traders in Southeast Asia for centuries. Second point, where else in the world do you have 74% of the population with Chinese ancestry? And the answer is either China or Singapore. We are unique. We are the only independent sovereign political entity with a Chinese ancestral majority, which is both a blessing as well as sometimes a burden. Blessing because presidency has probably spent more time with President Putin than any other leader. All right. But which other, I often wonder when I sit in those rooms, which other foreign leader can the Chinese leaders really, not at the formal meetings, but over drinks and over dinner, really download from the heart and from the mind? I'm saying it is a unique relationship because of this linguistic, cultural, historical mix. But having said that, our, if you go to China and ask, well, do, how many cities have a population of 5 million or 6 million? And the answer is quite a lot. Singapore's value proposition is not to be yet another Chinese city, medium-sized Chinese city, if it's 6 million. Our value proposition is to be same, same, but different, to quote my mentor, Mr. Lee Kuan Yew. Say, same. Yes, there's a Chinese majority. Yes, we understand Mandarin. Yes, we understand Chinese history and culture. But different, in order to be valuable. And the day that we forget the need to be different is the day we lose our value to China. And at the highest level of government, both in China and Singapore, we understand that the day that Singapore is just a vessel state or a tributary state, or Singapore cannot say no, is the day we lose our value. So it is a relationship which I believe at the highest level, there is mutual regard, there is mutual respect, and there is trust, but not on the basis of saying, "Yes, sir, yes, sir, three bags full," every time the big country wants to express its preferences. So I say this in all humility because we are a city-state. China is a continental-size civilizational state. So have no illusions about it, right? But I'm saying we have a unique and special relationship, and so far, it has gone very well. And I can put hand to heart and say we have been honest, reliable, useful, relevant to China. But you cannot stay still. You see, China has clearly, you know, transformed itself, and Singapore has to keep looking for ways that we will be useful and relevant for the future of China. Next thing is, never ever forget we are a city-state in the heart of Southeast Asia. This is our neighborhood. And actually, we are blessed to have a neighborhood which is, I mean, there will be some border issues and things, but generally, this is a zone of peace. ASEAN, quite rightly, and we'll be celebrating its 60th anniversary in 2027, has quite rightly focused on economic integration. We're talking about power grids, connecting cables, connecting fiber, connecting pipes, connecting bits, connecting digital payment systems. You, by focusing on economic integration, we have made our area a zone of significant economic prospects and opportunity. So my point is, it's still, you know, it's been exhilarating for me to have watched all this. Uh, it's a deep honor to participate in a small way, but I'm always, always mindful that we stand on the shoulders of our preceding generations. You know, Whaling, you and I, I mean, you've lived in China. Every time I go to the Great Hall of the People, or if I go to New Delhi and I go to the Rashtrapati Bhavan, the equivalent of the Istana, the thought always comes to me: If my great-grandparents had not left China, and on my father's side had not left India, do you think that great-grandson would be in the Great Hall of the People? I don't think so. The only reason I'm there is because Singapore exists, and we have made a success of our system, and a success with the opportunities that were presented to us by being in the heart of Southeast Asia. And we have a hardworking, disciplined people, a sensible, rational, honest, and competent government. And we have seized every opportunity that came our way, but with good old-fashioned values.
>> So that is our set of relations with China. >> Yes. >> But, um, there's also pressure building up from the other side. >> From America. >> Yeah. The other friend that we have. >> Same thing. We aim to be. Most people still underestimate how important America is to the Southeast Asian economy. The amount of investments that America has put into Southeast Asia is more than what America has invested in India, China, Japan, Korea combined. Most people still don't realize that by a big way. Now, are there Chinese investments in Southeast Asia? There, there are, but it is a fraction of what America has put in. Of course, trade, there's no doubt about it. Overall figures, China is the biggest trading partner. But in the case of, in our case, America is the biggest trading partner for services. So that's investment in trade, technology. At least for the past 80 years, there's been no question that America has been at the forefront of that. And our openness to American companies, to American technology, is to gain access. And for us, there's no way our per capita GDP now would be what it is if we did not have access to American technology, American markets, and if we were not a useful host of multinational corporations, thousands of them, and if we were not a part, a critical node in global supply chains. That's what has brought us to where we are. But same thing with America. I would say two things, right? It cannot be, "Yes, sir, yes, sir, three bags full," to everything that Americans want. We can't. Second thing, which I'm always very mindful of as the foreign minister, when I go to Beijing and I go to Washington, I do not, I say exactly the same thing to Marco Rubio and to Wang Yi. You, you can't get away with trying to whisper one version to you and then a different version to the other side. So consistency. So again, can you see the, the key point is we will have to say no from time to time. But when we say no, either to China or America, it's not because the other side is instigating me. I will be useful, but I will not be made use of. I will be honest, I will be helpful, I'll be constructive, and I'll be relevant. So far, anyway, so far, this kind of, you know, modus operandi has served us well in our relations with both America and China.
>> But now that the pressure has built up, even for normal economic cooperation, actually will be magnified. >> Yes. So now, if I was in America, I don't, I don't advertise so much about the investments in Singapore because America says, "No, no, I want investments in America." Right? But I, so I would have said, "But, you know, you have skin in the game. Why? And your American companies are doing well in Southeast Asia. Why would you not want them to continue to take advantage of their head start?" Similarly, I want Singapore to, I, I tell the Americans and I tell the Chinese as well, Singapore must remain open to both American and Chinese businesses. I cannot exclude you on the basis of where you came from. Having said that, I want honest business here. So no hanky-panky, no using us and using our reputation to cover up false declarations and things like that. So we will run an honest shop. And then we value the sanctity of contract. Right? So we don't, Singapore is not an oriental society that depends on just on quantity, but if I sign something, I mean it. I'll live up to it. So it is this combination of, you know, the Western concept of rule of law, an oriental concept which has a premium on relationship and trust, and we can get these two things together, we become an open, inclusive, high-trust, high-efficiency node in a global network. I, I think even in this state of flux, this kind of operating system, this kind of operating principles still are still valuable.
>> I think that's what people appreciate Singapore for. >> I hope so. I mean, we, we, we will do our best to maintain this for as long as possible.
>> I only have time for probably one question. Now, >> they, they're not going to quiz me on the audience. Um, we have skipped the audience questions today. Basically, I just want to ask because just now you mentioned about, I mean, we all understand about, um, the Americans' investment in, in this region. >> Yes. >> Uh, the importance of, um, the Americans in Southeast Asia. But so, in time to come, if, uh, China's technology, um, becomes very advanced, and China's investing more in this region. >> Yes. >> So then, how would the more the merrier, that the equilibrium would change? >> No, you see, the, I guess the larger point I'm trying to make is to avoid binary thinking that it must be one or the other. I'm telling the Europeans, the Americans, and the Chinese that look, Singapore is open for business. We are a technocratic and technophilic system, which means we are after the latest technology. I don't care where it comes from, right? But we will do business honestly, and we will not play games, and we will live up to our word. So the three technological revolutions going on now are in digital technologies, especially AI, renewable energy, and biotechnology. Actually, if you ask me right now, AI, I think the Americans have a lead, maybe a couple of months, a year or two. On renewable energy, I think China is in the lead. If you look at EVs, electric vehicles, batteries, solar panels, turbines, probably even nuclear, uh, technology. Yes, civilian nuclear technology. I think China is ahead. On biotechnology, which I know a little bit about from my past life, it is a very, very close race. So I have no idea who's ultimately going to achieve a decisive advantage. Actually, my hope is that we will continue to have a world where everyone in science and technology actually works on a common stack, and we are competing to innovate, competing to bring ideas to business, competing to make standards of living and productivity for everyone rise collectively. But in order to do that, we must avoid binary win-lose kind of thinking. And I'm saying, for the maximum extent possible, we'll remain open and rational and disciplined.
>> Do the other ASEAN countries share this similar view? >> If you look at what other countries are doing, I think everyone knows that this is a time of flux, a time of danger, >> and a time of opportunity. You've got the Chinese character for that, >> right? And everyone, in their own way, is trying to remain open and to have a more balanced set of relationships. But each country will make the slightly different, uh, adjustment to their foreign policy. Uh, in our case, uh, as I said, you know, we maintain a certain consistency, steadiness, predictability. Actually, Singapore's foreign policy is predictable because you know our principles, you know what we care about, you know how we operate. On any given question, you know, Zo will usually get it right.
>> But the question is, are they shifted their positions, right? >> Well, yes and no. Okay, let's take an, let's do a worked example, right? Southeast Asia. If you go back 60 years, the problem for Southeast Asia 60 years ago is we were an arena for proxy wars during the Cold War. That's why you had the Vietnam War, even in the problems in Cambodia, with ours, right? An arena for proxy wars. And we're all very clear, we don't want to repeat that. We do not want to make ourselves an arena for other people's wars. Next thing, at the end of the Cold War, the main development in Southeast Asia was economic integration and development, and to focus on that. Never mind the political differences, never mind the diversity in political systems, language, religion, all that, just focus on economics. And Southeast Asia has done well, generally. So we will continue to focus on that. But some countries, by geography, by history, and by economics, are more dependent on one or the other. And to me, I, I think every country has to do what it calculates is in its own national interest and make those adjustments depending on your dependencies and on your assessment of who is in a better position to give you more benefit. Singapore has the advantage that we are reasonably well-developed, and we stand on our own two feet. We're not dependent on anyone else to fight and defend us. We will defend ourselves. Thank you very much. We have the fiscal reserves of our own. So we're not asking for assistance. We're not asking for developmental aid. We're asking to do business as equals, as partners, as contractual, you know, relationship. So we, I would, basically, what I'm trying to say in a, in a long roundabout way is, don't judge other countries too quickly. Everyone has their own vulnerabilities, their own threat assessment, their own opportunities, and they're making those necessary adjustments. They cannot behave like us, and we should not expect them to behave like us. So, you have to learn to live with this diversity of approaches. But the common thing for Southeast Asia, we don't want wars. We don't want external wars to be fought here. We want to focus on economics. And we believe that the fundamental motto for economic development in this day and age is technology. >> And making our, let, and for technology, the key thing is to uplift the capacity and the skills of our people to take full advantage of technology. If we can do that, we can secure peace and prosperity in Southeast Asia next few decades, and we will easily be number, number four in the global rankings of, uh, GDP. But then we have to work on the other issue of inequality, and as I said, raising a prosperous middle class throughout Southeast Asia. That is a political, economic, social challenge which, you know, in Singapore, we are also focused on. So bringing down the Gini coefficient, uplifting educational capacity, especially for families or groups who may otherwise be left behind. You know, again, it's not about economics versus social policy. Actually, it all dovetails. You see, you get education right, you get social policy right, you get fiscal policy right. All cylinders firing, you will succeed. You'll be strong, to be more equal, more united, and we hope to achieve that in Southeast Asia as well. With that, thank you, Minister, because time's up.