Transcription
Geopolitics is the most cruel game in the world, and we are today, in terms of geopolitical shifts of power, experiencing far more geopolitical shifts of power than any other time. It is very important, therefore, for countries, even nice countries like Canada, to understand that being nice is not enough.
Geopolitics is the most cruel game in the world, and we are today, in terms of geopolitical shifts of power, experiencing far more geopolitical shifts of power than any other time. I give you some examples. It's very important, therefore, for countries, even nice countries like Canada, to understand that being nice is not enough, that you've got to learn to be very geopolitically shrewd and cunning and mark your valiant if you're going to survive in this world.
And I would say, in terms of our world order, you're absolutely right. It is very difficult to adapt the established top-level institutions, UN, IMF, and so on and so forth. There are other institutions that are rising in an ad hoc fashion, and clearly, among these organizations, some are sunrise and some are sunset. So, I give you the obvious example. Until recently, one of the most powerful organizations was the G7 countries, right? It was the United States and six other European members plus the European Union. And at one time, when the leaders met, all the G7 leaders looked equally strong. Today, when you watch meetings of G7 leaders, it's like Snow White and the Seven Dwarfs. And you know, I'm not even exaggerating.
I mean, one of the photographs that will go down as one of the defining moments of the 21st century is the photograph you saw recently of President Donald Trump in his White House, sitting at the desk, and all the European leaders were sitting on the sofa like children in front of their school teacher. I mean, that photograph was so damning. And this is the same Europe that says, "We will not give up our seats. We are very powerful." They behave like school children. But that's an illustration of how power shifts have happened.
By contrast, if you look at BRICS, right? Brazil, Russia, India, China, South Africa. That's clearly a sunrise organization because a lot of countries are applying to join, right? It's interesting, no one is applying to join the G7, but for BRICS, everyone is writing. That's an example of how power is also shifting.
But there is also another important organization which I think right now is having a rough time, which is the G20. The G20, at the end of the day, will become more significant in the decades to come. And the G20, as you know, was formed as a result of a global financial crisis. And initially, only the finance ministers used to meet, but after the 2008-2009 financial crisis, even George W. Bush convened a meeting of the G20 leaders to try and deal with the global financial crisis. So that's an example of how there are various forms of adaptation taking place.
But these forms of adaptation are not enough. So, it's important, therefore, for especially the Asian countries to work harder to say that their voice must be represented much, much more strongly. China. But I think for the China-India relationship to improve, a lot more work needs to be done by both sides. And here, I must say that if I had been given this talk here even four months ago, I would have been very pessimistic about China-India relations. But we must thank one gentleman for significantly improving China-India relations. And this is the gentleman whose name I should not mention, but I have to give credit where it's due.
And President Donald Trump's decision to impose a 50% tariff on India is one of the biggest shocks that India has ever got in recent times. But more than that, you know, as you all are aware, India and Pakistan also had a military clash a month or two ago. And after the military clash, President Donald Trump invited the Chief of Army of Pakistan for a special White House lunch. And the Indians saw this as a slap in the face for them. And so there is now, even as we are speaking, a tremendous amount of evaluation going on in Delhi about where India's place in the world is. And yet, we are now in the midst, you're going to watch a kind of a transition that is happening. So on the China-India front, hopefully, things will be much better.
But the global financial structure, infrastructure, is very much still denominated and anchored in the US dollar. So global trade, access to finance, very much depend on access to dollars, including in places like Hong Kong. So, how do you see this dollar dominance and the global financial infrastructure that's still very much anchored in a US-centric system affect the path of globalization or structural change going forward? How does that affect dependence on dollars, if I might just?
Well, you're absolutely right. The dollar is completely indispensable to the global financial system. The dollar will remain the global reserve currency for decades to come. Even if the Chinese economy becomes bigger than the US economy, and I think it could happen in, let's say, 10 to 15 years from now, the US dollar will still remain as the global reserve currency. That's a fact.
But at the same time, some of the recent actions that have been taken by the US, by the West, have led to countries questioning their reliance on the US dollar. So, for example, the seizure of the Russian assets of $300 billion is clearly illegal under international law. You can't do it unless the UN Security Council mandates it, right? But that gesture has led to many countries saying, "Now we've got to hedge our bets. We cannot put all our reserves in US dollars." So there's a progressive, very slow process of moving away from the US dollar in many years.
And the other danger that the US dollar faces is that you now, right now, for example, when China exports cars to Argentina, it gets paid with dollars. Argentina exports beef to China. It gets paid with US dollars. Surely, you can create a new mechanism using blockchain technology and all that to bypass the US dollar. That hasn't happened yet, but the pressure to look for alternatives has grown significantly. So, I mean, I don't see any substitute for the US dollar in the near future. But the reliance on the US dollar, you know, I'm not a military expert, but I have, in my book, "Has China Won?", actually did say that it is now pointless for the United States to send aircraft carriers close to China.
Remember that in Bill Clinton's time, in 1996, when there was a crisis between China and Taiwan, Bill Clinton sent two aircraft carriers. He didn't actually send them through the Taiwan Straits, but he sent them close enough to say, "I can control the Taiwan Straits with two aircraft carriers." 1996, right? 29 years have passed. Tomorrow, if there's a crisis within China and Taiwan, the US cannot send two aircraft carriers because nowadays, with hypersonic missile technology, aircraft carriers have become sitting ducks. In fact, it doesn't make sense to build aircraft carriers because, you know, they were supposed to be invincible. Now they're not invincible anymore.
And so, and you can see therefore, actually, again, I'm not a military expert, but what's been the most effective in most of the recent battles? Drones. Small little drones. And they're amazing, the amount of damage that can be done by little. So the nature of warfare is changing.
But at the same time, I also want to emphasize that even though there are wars in Ukraine, there are wars in Gaza, most countries in the world are coming to accept that wars are stupid. You know, and the good news for the world is that wars in general are a sunset industry. There are some places where they break out. I run something called the Asian Peace Program, by the way, at the National University of Singapore. You can Google and look at it on our website there.
Wars are a result of geopolitical incompetence. The Ukraine war could have been avoided if the Europeans had shown some sensitivity to what are Russia's core national interests. It doesn't mean that the Russian invasion of Ukraine is justified, but you could have prevented it by acknowledging that Russia has got legitimate security interests. And in the same way, the Gaza war could have been avoided if the West had tried harder, pushed harder for a two-state solution between Israel and Palestine.
And I say this publicly to my Israeli friends: If I, as a friend, see you walking towards a cliff, do I say stop or do I say keep walking? I see Israel walking towards a cliff because Israel has alienated global public opinion. Very unwise, right? At the end of the day, if you want to prevent wars, to go back to my earlier point, you've got to be very cunning in geopolitics, understand country's core interests. China.
And I think that the important thing is that I believe China realizes that Hong Kong is a better asset to China, actually, to keep its differences rather than dissolving the differences and becoming just like any other Chinese town or city. And in fact, the differentiation therefore becomes an asset to China. So if you can keep up your British, what they call, common law traditions, which is what we have in Singapore, and you keep that going, and you keep up your modern business practices and everything, you are Hong Kong is therefore a bigger asset to China.
But it's important, therefore, that the leaders of Hong Kong communicate that much more strongly, both domestically and internationally, because I think that frankly, and in my sense, is that at the end of the day, Beijing wants Hong Kong to succeed. And part of the reason why Beijing wants Hong Kong to succeed is because the United States doesn't want Hong Kong to succeed. It's a fact. I mean, I told you earlier on that geopolitics is a cruel business, right?
In some ways, paradoxically, incidentally, because President Trump is one of the least ideological presidents of recent times, he, as you know, doesn't pay much attention to issues like Hong Kong and Taiwan. But his predecessor did. And so for that reason, if China sees that Hong Kong is under threat, it's in China's interest to see the success of Hong Kong.
But one last point about Hong Kong. And I've used this analogy before. In the US-China contest, Hong Kong is going to become a political football. And if you are going to be caught in a geopolitical game, the Hong Kong establishment must develop geopolitical instincts and understand the game that is being played, and then understand sometimes when to dodge.