Transcription
Thank you for the wonderful speech. Uh, I am Soham and I am a student at IMI, uh, New Delhi. My question is, now that China is pulling back from Taiwan, uh, how would the relation between China and Philippines, Philippines and US, uh, do you foresee, and what should the role of India be in terms of a defense provider to Philippines?
Okay. Uh, should India get involved in, in helping the Philippines in the South China Sea? Um, of course not. I mean, you can, you can give moral support, but this is something you don't understand. And even the Americans don't want to get too involved. When the Philippines were taken from the Spanish by the Americans, there was a treaty, I think around early 19th century, and it actually marked longitude 118 degrees as where the Philippines begin. So, the Philippines have no birth certificate to any island of South China Sea.
Of course, the Americans know that if there's war over Taiwan, they are not likely to prevail because Taiwan is too close to the Chinese mainland. And America's power projection requires the aircraft carriers to come up close, and Chinese hypersonic missiles can hit all of them. In fact, all the way to I would like to thank Ambassador Shamsara. When I was asked to give a title for my talk this evening, I thought with the way Trump is fast forwarding the future, I, I, I should just have a general placeholder. So my topic became India in a new Asia, which is a little timeless.
Trump is dramatic. My old boss, Robert Quark in Hong Kong, he's now 102 years old. One day he said to me, "One reason to live long is that you get to wake up every morning and to read what Trump has said the night before." He's, he has a robust constitution, but Trump, I think for many of us, shoots up our cortisol level. The last two weeks is all about Venezuela and hot on Venezuela's heels, Greenland, Cuba, and now Iran. What's happening? I think Trump is accelerating trends which were already underway for some time, which is the crystallization of a multipolar world. His is the first US administration to admit that this is a multipolar world. You know, Rubio, Secretary Rubio said recently, apropos the war in Ukraine, "This is not a war. It is on a different continent." Can you imagine the shock to the Europeans who since February [snorts] 2022 were being led on the charge against Russia by the US?
The special operation, to use Russia's phrase, in Venezuela was brilliant, stunning, but it could not have been accomplished without collaboration inside Venezuela. And it's still not clear who collaborated and how. The initial nationalistic outpouring confuses the picture. So when Trump talked about taking control of Venezuela, I don't think it's that simple because this is where Simon Bolivar, who liberated large parts of South America from the Spaniards 200 years earlier, came from. And it's just, it's not just elite. I had the, the pleasure one day of sitting next to Hugo Chavez. He was passing through Singapore and paid us a one-day visit. And Prime Minister kindly put me next to him. So I was able to grill him on his earlier escapades, a field cool, imprisonment, and what his mission was. He had charisma but little sense of economics, and under UN's sanctions by the time it came, US sanctions by the time it came to Maduro, the economy was ran to the ground. It was Cuba which provided healthcare and much of the administrative capability in return for Venezuelan oil. I don't know how the US is going to manage this. There's no full regime change. There is a leadership change, and they can't go back because too much has been invested. This will be an entanglement.
Trump's objective from the first days of his second administration has been very clear. He wants Canada to be the 51st state. He wants Greenland. He wants to take back the Panama Canal, and he renamed the Gulf of Mexico the Gulf of America. This is because knowing that the US has overextended, he is effecting a gentle retreat and consolidating his own hemisphere. Now, if he succeeds, Greenland, North America, Central America, the northern part of South America, that is an incredible sphere with three oceans, enormous resources. And if he adds to his balance sheet, US balance sheet, Canada, Greenland, Venezuela, the 38 trillion fiscal deficit will look entirely manageable. In the national security strategy paper that they issued under Trump's name just a few weeks ago, they spelled it out quite clearly. It will absorb a lot of their nervous energy and a considerable amount of the military resources because they are blockading not just Venezuela but later on Nicaragua and Cuba as well. This retreat has huge consequences for the rest of the world. I don't think the rupture with Europe can be repaired. He was asked, "Greenland at the expense of NATO?" He did not give a clear answer. Implication was, if need be. And even if there's a negotiated outcome, European leaders know that looking ahead, they have to stand on their own, build up their own army, and be more autonomous. Not to give up links to North America, but to depend much less on it. And each will calculate more selfishly. And in the end, they will have to live with Russia. There's no escaping now.
Ukraine being partitioned. In East Asia, Trump was asked, "What if Xi Jinping were to do to Taiwan what he did to Venezuela?" His reply was, "That's for Xi Jinping to decide. He knows I'll be unhappy." This is like a thunderbolt hitting the Taiwanese people. They thought they had American backing. And here Trump said he'll be unhappy. That's all. Of course, the Americans know that if there's war over Taiwan, they are not likely to prevail because Taiwan is too close to the Chinese mainland. And America's power projection requires the aircraft carriers to come up close. And Chinese hypersonic missiles can hit all of them, in fact, all the way to Guam. And even if they embark on this adventure, you know, TSMC in Taiwan will be destroyed, and with it the supply of Nvidia chips. China has alternatives, maybe poor alternatives, but it's less dependent on Nvidia chips than the rest of the world. And in fact, part of US strategy is to deny China the most advanced Nvidia chips.
When I was in Tokyo, I flew to Delhi from Tokyo last Sunday, chatting with some people, a senior business executive with some seriousness. He said, you know, the Chinese could have colluded with the Americans to draw Maduro from his safe house because Xi Jinping's envoy met Maduro a few hours before the US special operation. Draw him out, leave, and the US came in and napped him. I was shocked that the Japanese should imagine such a conspiracy theory. But that is the mood now. So you retreat your hemisphere, the Europeans on their own. Are you conceding East Asia to China? Will there, will China introduce a Monroe Doctrine for East Asia? I don't think that will happen. To begin with, this is not the way the Chinese think. The Chinese throughout history build walls around themselves. They love walls. And they build walls for all kinds of things, not just physical walls, but walls for movies, for books, for capital markets, the internet. And during COVID, the most impressive of all, the great biological war of China, enabling China to be the last country to open up. China is homogeneous, over 92% Han, not without reason. They find it difficult to govern non-Chinese people. Chinese people may complain, in the end, they'll comply. And there's a long history of statecraft going back centuries. And if you start bringing in large numbers of foreigners, if Beijing becomes like New York or Shanghai, like London or Paris, the Chinese Communist Party will find China ungovernable. So during COVID, the foreigners couldn't take it. They left. The Chinese stayed behind. They stuck it out. Sometimes they joke about it. The Shanghai were traumatized, but life goes on. That's China.
In any case, the Indopacific Command in Honolulu has been there for a long time, and they're not going to go anywhere. I mean, the US fought the Second World War victoriously, the Korean War to a standstill, was defeated in Vietnam, but their presence on the Western Pacific was gained by blood and treasure. In Japan today, there's still over 50,000 American soldiers. In Korea, over 20,000. So when we talk about a consolidation to the Western Hemisphere, it is relative. But for the immediate future, I think US-China relations have been stabilized, and the principal reason for this is rare earth. Trump, after Liberation Day, expected everybody to line up and kiss his backside. Of course, China just looked the other way. So to India, smaller countries had no choice. We all had to line up in ASEAN and hope for the best. They kept piling on the pressure on China. In the end, China had to play a card which they did not want to play, which was rare earth. It was already open on the poker table in 1992 when Deng Xiaoping said, "The Middle East has oil, China has rare earths." They know that the moment you use a card, it begins to lose its value. The Americans are now scrambling to become less dependent on China. The rare earths are 17 elements in the periodic table, 15 in the lanthanum group. The lighter rare earths are found everywhere in the world, and after five, seven years, you can develop the processing capability. But the heavy rare earths, those further on the periodic table, like dysprosium and terbium, which are needed for the high-quality magnets you need to make F-35 fighters and bunker buster bombs and missiles. These elements are only found in China and in the part of Myanmar neighboring China. So China now has a chokehold on the US.
Don when the Chinese reacted was so upset in Switzerland, but in the end, they had to confront reality. [clears throat] Trump, ever the businessman, he then said, "God bless the US and China." Well, I hope God will bless all of us. But for him to say that reflected an encounter with reality, and he'll go to China in April, there will be some settlement. And because this chokehold is good for at least another maybe 10 years, I think there'll be stability unless China does something egregious, which I don't think China would, because they much prefer to have peaceful reunification with Taiwan. And after Trump's remark that it all depends on Xi Jinping, I think the thinking in Taiwan will change.
China is going through a difficult period, and the mood is a bit down because of real estate. They punctured the bubble, which was an enormous bubble, and it would take 10 years for it to be massaged out of the system. China is also restructuring industry in a profound way, and you have to visit China regularly to see the things that are happening. I'm an advisor to Huawei in Singapore. A few years ago, Huawei's catchphrase was "Cloud everywhere." A few years ago, they changed it to "Intelligence everywhere." Intelligence everywhere means edge intelligence, sensors, and in AI, and this was articulated by the founder of Huawei. China is taking a trajectory divergent from the US. They made a strategic decision to make large language models open source, whereas the Magnificent Seven in America, their valuation makes up one-third of the US stock market. They need the revenue flows, which means proprietary knowledge. You use them, you pay. In China, it's free. So when you apply that public good to a specific need, like for mining or for, uh, anticipating building failures, which would then be proprietary to you, you do not have to invest in the large language models, which are horrendously expensive. So when Sam Altman came to this country and met Indian entrepreneurs, and they asked about India's chances, he said, "Don't waste your time. There's no way you can catch up because it was proprietary." Then when China made DeepSeek, and now Qwen by Alibaba, also open source, all of us are in the game, including Singapore, Brunei, Laos, and of course, India, without having to invest enormous resources in large language models.
As a result of this, in China, AI is being applied in all industries across the length and breadth of the country. I went to this place where they make toys in June, and there they were already inserting it so that the dog can recognize you and respond to you. By next year, for Christmas, they'll be little robots we give to one another. It's, it's changing that fast. And I've been watching the exoskeletons that are now available. Now, many of us are getting, oh, we have ankle problems, knee problems, hip problems, mobility problems. In the case of India, diabetes will be a big problem. There'll be amputations. These exoskeletons will extend our mobility for many years. They're getting lighter, cheaper, and smarter. Which means you slap it on, it quickly responds to you because AI is built in. And you can be sure that in China, many companies will be competing with one another to make better models. The same kind of intense competition you find in solar panels, in motorcars, in drones, in robots. And I've been watching the humanoid robots, TA, which requires a lot of exercise and practice over years. It's unbelievable how quickly the humanoid robots are learning. At first, I thought, okay, not bad. Then they started doing backflips. They fell. They got up immediately. Then two months ago, a Taiwanese singer I know, he was performing in Tainan. He had male dancers, female dancers, and robot dancers. And the robots all did perfect backflips. So within six months, the progress is astonishing. In another six months, even if your martial arts is very good, don't tangle with a robot. And this is a revolution in every sector of industry, in the economy, and in defense. This revolution, this revolution will transform the way we see ourselves and create enormous stresses in human society.
But because China and the US, I think we have stable relations, and we in ASEAN, our trip with China reached a trillion dollars last year, have kind of learned how to manage China, to ride on China's growth but not be in China's grasp. It requires a, a little bit of agility. And in this movement, naturally, we look to India as a counterbalance, but the relations between ASEAN and India are way below potential. In Singapore, we sensed it some time ago when Narasimha Rao, faced with an impossible fiscal situation, took India on a different path of economic reform. I think it was in October 1991. P. Chidambaram as commerce minister, Manmohan Singh as finance minister, gave a seminar which is still remembered in Singapore today. And suddenly our ears pricked, "Is something happening?" In early 1993, I led what was for Singapore a very big business delegation to visit India, and the country was in early ferment. We could feel it. In 1994, the Bangalore IT Park was established. In the Tata Group, and we were asked if we could help renovate or build a new airport for Bangalore. You know, we reported to Lee Kuan Yew. He was skeptical because sometimes when you know too much, it's hard to, to see this continuity. I remember once when Rahul Gandhi called on him, he looked at Rahul. He said, "I know your father. I know your grandmother. I know your great-grandfather." He was not patronizing Rahul. He was making the point that he had a longitudinal knowledge of India. So, Kishore wrote the report of our '93 visit and got was scolded for it. And whenever there was something negative about India, Lee Kuan Yew would send it to me. But at the same time, every time I visited India, he, he would debrief me. He wanted to know what was really happening. He's not an easy man to convince, but he was intellectually honest, and he was eventually persuaded that things were happening in this country. And we took a long approach. In 1994, together with, uh, Human Resource Minister Arjun Singh, we had the biggest exhibition of, of India in Singapore called Alankara. Till today, still the most important exhibition India has ever had in Singapore.
Then when Vajpayee was Prime Minister, Goh Chok Tong, the second Prime Minister in Singapore, was already always favorably disposed towards India. He gave speeches saying that, "No, we need two wings. China is one wing, but we need the other wing too, which will have to be India." So he and Vajpayee talked about a free trade agreement. Goh Chok Tong asked me, I asked my officials, my officials said, "It'd be a waste of time. There'd be a lot of talk and nothing." I conveyed that to Goh Chok Tong, related to Vajpayee. Vajpayee was upset, and he told Arun Shourie, who was in his delegation, he said, "You go and speak to George." So we had breakfast. I repeated the position. Arun said, "I'll prove you wrong." And he proved us wrong because we had a very substantial comprehensive economic cooperation agreement. It was negotiated with the BJP government, concluded with the Congress government. I had taken the precaution while negotiating with the BJP government to brief Manmohan Singh and Sonia Gandhi, and they pledged their full support. So when the change came, it was smooth. And since then, we've been trying to pull the whole of ASEAN closer to India with limited success. To me, this is an imperative. India's growth is organic and self-sustaining. I understood it at one level as a minister. When I lost elections in 2011 and went to the private sector, I ran a logistics company in Hong Kong and pushed for investments in India. So we found a partner in Chennai, in Death Roman Catholic, and, and it's, it's done well. And I could see that ports, airports, IT parks, telecommunications were improving. There were borders separating states. They all gradually opened up. So from the logistics point of view, from the movement of freight to India and within India, I could see that this growth is organic. So maybe looking back, you know, Deng Xiaoping, when they give him credit for opening up China, he said, "I only opened the door because millions of people behind me were pushing me to open the door." I think millions of people were telling Narasimha Rao, "Open the door." And what we are seeing is a process ongoing for many years, sometimes helped by government, sometimes impeded by government, but unstoppable.
I got involved with Nalanda University. Amartya Sen was in Singapore. I was a minister in attendance to him. He asked for my views. So I suggested that he promote Buddhist tourism. He got Jack Ma to come and see me. So I attended the dedication of the Mahabodhi Mahavihara in 2022 in Bodh Gaya. I went to SAS, and then I learned about Nalanda. So later, when Montek Singh Ahluwalia, who was deputy head of the Planning Commission, came to Singapore, we had dinner by the Singapore River. I said, "Why not we resurrect Nalanda as an East Asia University?" I was excited. He was excited. He said, "Write me a paper." Which I rapidly did. Sent it to him. Manmohan saw it. Got a note sent to the mentors group. And then after a few years, legislation was passed with unanimous support in both the Lok Sabha and the Rajya Sabha. Amartya Sen became the first chancellor. I became the second chancellor and had the honor of presiding over the first convocation, the first after 800 years, and it brought together the entire region. But during that period, I was going up and down the country roads of Bihar between Rajgir and Patna, and I could see that, hey, things are getting better. The fields greener, the animals fatter, the saris brighter, the shops fuller. Yes, Lalu Prasad did a lot. But you know, it's, it's, it's in the soil. It wants to grow. I'm quite sure now if I go back to Bihar, it'll be a very different Bihar. Just as today, when Singaporeans come to India and they say, "Oh, very nice airports." Well, they did not know what Indian airports were like 20 years ago. And now highways everywhere, traffic jams everywhere because of highway construction, subway construction, and telecommunications has improved. India is now everyone absorbed into the national and international marketplace. So India is on the move. And India's relations with China, which are improving, will be an important part of this story because there's great complementarity between the two countries. I'll talk about this a bit more later.
So I asked myself, what can hold back India? I said, well, when China joined the WTO, it had almost 20 years of clear growth. Between 2001 November, when China joined the WTO in Doha, to the beginning of COVID in 2019, China's GDP grew seven times in real terms, nine times in RMB terms, 11 times in US dollar terms. The Chinese themselves did not expect this, and it created great stresses in the global economy. India started 20 years later, and now it's less favorable, and Trump is threatening draconian tariffs on India. I don't know how the Indian government is going to negotiate this. You can't show weakness because if you show weakness, then that's the end of you. But you have to be flexible and practical. If they're losing interest in Ukraine, I think India will become, India's purchase of oil from Russia will eventually become less important to the Americans. But it's important, even if it costs some, to be firm now so that you establish reputation. And India must find other ways, channels to trade and make a living. Southeast Asia, China, Africa will all be important. I understand why India pulled out from the RCEP at the last moment because of farmers, because of fear that China's manufacturers will swamp India. Tarun Das from CII doesn't agree. He gave me lunch yesterday. But there is that fear. I think eventually India will join RCEP. But RCEP itself is evolving. So it's important that it's evolving in a way which allows India to hop on when the time comes. So I've been publicly calling for an RCEP at the political level, ASEAN plus 6, which includes India, which sets directions for the free trade agreement, and then India, in his own time, can join and on terms negotiated, taking into account India's domestic needs. This is very important because the economies of India, China, and Southeast Asia combined is more than half the world, and the faster growing half of the world. Which means that if we maintain the peace and have economic development for another generation, this region will pull the whole world along.
Then for India, [clears throat] you know, I, I've been to Bhutan, I've been to Pakistan, Sri Lanka. India's relationship in the region is, is sometimes a little prickly. I, I think it's inevitable because partition was unnatural. Partition, first of India and Pakistan, and then Pakistan, Bangladesh. Suddenly, in one generation, two generations, a Westphalian system forced upon a civilization that suddenly your relationship to one another has to be between countries which can continue to trade but cannot interfere with one another. It will take time. What we hope for is that in this period when interstate relations are evolving, to keep the temperature as low as possible, to avoid big conflicts, and therefore to concentrate on economic development. And in the end, it is economic development which determines a country's strength. The problem today is because of technology, AI, globalization. As we grow fast, social stresses increase within the country, and sometimes can be very difficult. So towards AI, for instance, there'll be a differential response in many countries. There'll be a laggard reaction saying, "Look, don't introduce this. It's causing unemployment. It's disrupting existing industries. Slow down. Hold back." While countries are able to keep their social system soft, they will streak ahead. So India, with states, ethnicities, different religions, castes, we have to work very hard to keep the Gini coefficient decent and make sure that the poor are helped. The other cut will certainly help. And this is the biggest political challenge in India today, which is how do you keep the different parts bound together enough so that the economic development will not be held back.
Then from my perspective in Singapore, another key challenge for India is urban development because as you grow, the farmers will come to the cities, and if you're not careful, the slums will grow, the pollution will get worse, the cities become unlivable. So the earlier the cities plan ahead and anticipate problems, the more they can prepare for the future at lower cost. And in this area of municipal governance, there is much for Singapore and Indian cities to work together, to learn from Singapore's successes and also from its mistakes. Of course, Singapore has an advantage that is autonomous. But we don't have space, whereas you have space in India. So there are things you can do we can't do in Singapore. Every Chinese city studies Singapore. Sometimes we don't benefit from it because we are spawning competitors to ourselves. I think we will have a similar role in India. Some airports in India, I'm told, are better than Changi. Why can't Indian cities in some areas also be as good or overtake Singapore? I mean, years ago, I went to Jamshedpur, and what the Tatas did, they had portable drinking water from the tap. They introduced social security. Jamshedpur was a planned city. Indian cities can be planned, the laws can be modified, new legislation, because when people see other cities making progress, then they'll want the same for themselves. I make this last point with self-interest because Singapore will benefit from it, and we balance closer to Singapore. But it's also a serious point because deliverability is a very important part of the future of living in a knowledge, data-driven economy.
India-China relations, I think, are on demand. Galwan Valley was a turning point for the worst. I listen to both sides. I sympathize with both sides. India took the opportunity to pivot. America wanted it because he saw China as the main challenge. This got the Chinese very suspicious because they saw in India's reaction a strategic move against China. So Chinese companies were expelled, flights were stopped, links were cut. On the Chinese side, they have been, they have been measured because it's in their interest to have good relations with India. The '62 war is still remembered in India as if it happened recently. It's largely forgotten in China. So this is a problem, and this explains a symmetry of response. Then February 2022, Russia moved into Ukraine. America and Europe wanted India to support Ukraine and disavow Russia. How could India do that? I mean, India's relationship with Russia goes back a very long time. You buy the military equipment, it's an old friendship which you cannot turn against. So, sorry. Then after Balakot, the Indo-Pakistan short war, India wanted the US to support India against Pakistan. Trump invited the Pakistani army chief to the White House, gave him lunch, and got him to nominate him for the Nobel Prize. So, so this is an adult relationship. And not surprisingly, India and China now say both sides agree that it's in their mutual interest to find a way, lower temperature of the border, move forward. Of course, China does, China wish India well? I mean, that is a question we must ask ourselves. It's like between Singapore and Malaysia. You know, sometimes we ask ourselves, does Malaysia wish us well? And Malaysia asks itself, does Singapore wish us well? Yes, but maybe not too well, because then it becomes a problem. But between now and that theoretical future, there's so much to be gained by working together. I think bit by bit, things will improve.
Two months ago, I went to Beijing for a conference. I think Shamsher was there. Uh, this was the, the Dingding Peace Forum. And I went to Changi Airport gate 20. So I woke up to G20. I looked into the glass enclosure. I said, "Oh, must be the wrong, wrong, wrong gate because they're all Indians inside." I said, "No, it's the right gate." So there must have been, uh, because at that time, there's still not many direct flights. So they were turning around in Singapore. So I started doing some social investigation. Some were businessmen, many were tourists. So there's a pent-up demand both ways. And China has now issued large numbers of visas for Indians to go to China. And they're hoping that India will do the same, which I think India should, because what is the harm? And there's this writer report that India may allow China, Chinese companies to take part in public tenders. I hope it's true because if it's true, then that is a strong signal to everybody that things are on demand.
In 2010, I was in Tibet as Foreign Minister, and I was being driven from Lhasa to Shigatse. Along the way, we reached the nearest point to the Nathu La pass. The Chinese official said, "I hope one day we'll build a road to Kolkata." I looked at the map, it's a short distance. That's how the British went to Lhasa by the Nathu La pass. I know on the Indian side, the strategic thinkers, the, the buffs, say, "Oh no, no, no, we have the Chicken's Neck there, the Siliguri corridor is very dangerous." I was from the military before, so I'm not so easily impressed by these arguments. There are so many ways to seal up the Nathu La pass if there's an emergency. And until there's an emergency, you can let the trade flow. Hundreds of millions of Chinese will benefit, and Kolkata will boom. Now, it's not something for the immediate future, but something to be imagined is step-by-step relations improve, and each can add considerably to the GDP of the other, and the entire region will move with you.
No, for us in Southeast Asia, when there are quarrels between India and China, it's like father and mother quarreling, you know, we feel great pain. No, even among retired MPs, we have a WhatsApp group, and when Galwan happened, Chinese and Muslim MPs took different sides, and the postings became more and more angry until someone said, "Please, we're all PAP members, can we not discuss this subject?" Back, and since then, we've not been discussing India-China relations. Wang Gungwu, the famous professor, said Southeast Asia where the mandalas of India and China intersect, and they intersect most in Singapore. Therefore, if relations improve, you can be sure that we will cheer both sides on and facilitate wherever possible, and this will make this a better world, not just for the region, but for the rest of the world as it becomes more multipolar.
This is a Dashmoke lecture, and I've been reading up on C.V. Dashmoke, his life, what he stood for, what he exposed, what he embodied, and I feel emboldened to make a suggestion. You know, two years ago was the 50th anniversary of Panchsheel, what the Chinese call the Five Principles. China had a commemoration event. I followed it closely. India, because relations were at an all-time low, did not take part. I don't know if India was even invited. I must ask S. Jaishankar afterwards, but it was half of it was missing. You can't celebrate a wedding anniversary if the other party didn't attend. And Bandung gave birth to the 10 Principles issued in the Afro-Asian Conference in Bandung the following year, and provided the philosophical basis of the Non-Aligned Movement when it was launched in Yugoslavia in 1961. Now, let's think about it. The Five Principles: mutual respect for sovereignty, territorial integrity, mutual non-aggression, trade, economic benefit, mutual non-interference, peaceful coexistence. The Five Principles, these are the principles humanity needs for the 21st century in a multipolar world. We have to add new things like ecology. So perhaps it may be possible if India, China, and ASEAN together work out a Panchsheel 2.0 and commend it to the world. It'll take time, but people will begin to sign on, and we will create a certain moral momentum to treat one another in a more civilized way. We are ancient peoples. Therefore, we know that you can't change me, I can't change you. But you are worthy of respect. You may have your prejudices, but each is worthy of respect and regard. Something to think about and something perhaps to be proposed at an event which remembers C.V. Dashmoke. Thank you. [applause]
Uh, thank you, George. You have not disappointed us. I think, uh, in the kind of, uh, uh, strange world in which we are living today, I think you have given us, uh, much to, uh, think about how to deal with this, uh, situation. Um, in, in all the flux that is happening, uh, relatively speaking, perhaps Asia is in a much better position, uh, than many other parts, uh, of the world. And I, the Indian position always has been that when we are looking at, uh, multipolarity, multipolarity must begin, uh, in Asia, uh, itself. What, uh, with your immense experience dealing with China, and also, uh, the fact that, you know, um, it would, it would sometimes appear that, uh, the Chinese conception of power, in fact, is very hierarchical, in the sense that, uh, you know, if, if you look at the manner in which China orders its relationship with various countries, is, there is a ranking, there is a great power relationship. There may be a second order where it is with neighbors, the third order with international organizations, and the rest. In that kind of a ordering, a hierarchical ordering, the kind of multipolarity that country [clears throat] like India thinks about, these, in fact, are not, very much aligned. So the, so the peaceful existence principles that you are talking about, that in theory seems to be, mother and apple, apple pie, as, as they would say, but, I'm not very sure that it really applies to the manner in which actually China, you know, deals with the rest of the world. Uh, I'm reminded of the famous, uh, famous words of Yang Jiechi in one of the meetings with ASEAN countries, where he got a little annoyed about the reference to the South China Sea, and he said, you know, "China, you must remember, China is a big country, and you are small countries, and this is a fact." So, given that kind of a attitude, um, it seems to us that perhaps the kind of order that we are looking, looking for, perhaps is not quite aligned with the way China looks at its future.
>> Yang Jiechi did make some such remark, and it was reported in the Wall Street Journal that it was directed at me, that he was looking at me at the very moment he made those remarks. If I had been the intended target, I would have felt it.
>> I was not aware of this. What I was aware of was the day before, when I had a bilateral with him, he rehearsed those same arguments with me. But it suited Americans to put it out that China was bullying Singapore. I don't believe it because I knew Yang. I cultivated him before he became a minister. So we had a relationship. But that aside, the Chinese have an operating system which enabled them to organize a vast population over centuries by ordering how human beings relate to one another. Some of you may be familiar with the Chinese practice of giving little red packets containing money to friends and relatives. It's a very stressful period for mothers because, you know, billions of envelopes are printed to transfer a small amount of money, but you need fresh banknotes, and you've got to know how much to put in each, and to make little markings so that you don't give the wrong amount to the person you're giving, and then you ask the children, "What did you get from that person?" Now, what is the entire purpose of this exercise? It is to establish relationships, which is why it is a culture from which corruption can never be fully eradicated. You enter that culture and you don't understand it, or you don't want to understand it. They'll still operate with you like a trader, but you'll never really understand them. This is Chinese society. There is no substitute for knowledge, and in the case of China, for deep knowledge. But I can say the same for India. You know, for many Singapore businessmen, Hong Kong businessmen, the view is India is a difficult place to do business. And Lee Kuan Yew would always catch those Singaporeans who did business in India and ask them, people like Albert Hong, say, "How do you do it? Because how is it that the others have such great difficulty?" So when you talk about the way China looks at hierarchy, it is not hierarchy in a despotic sense. It's more a hierarchy of relationships that enable them to interact with one another on the basis of predictability. Of course, it's changing, but it's China.
Uh, thank you. Uh, since we have limited time, I will open the floor to, uh, questions. Uh, please make your question, uh, short. Uh, shall I take three questions together and then? Yeah. Uh, and, and, um, and please just state your name and let us know which organization you are coming from. Yes.
Rajiv, >> Thank you very much for your illuminating dissection of geopolitics. Today you spoke about US, China, India, Southeast Asia. My question is, can you help us to understand a little bit better the European approach, uh, as well? Is there one European approach? Are there multiple approaches towards Asia, particularly India, China, and Southeast Asia? Thank you.
>> Yeah. Another question, please. Yes.
>> Thank you for the wonderful speech. Uh, I am Soham and I am a student at IMI, uh, New Delhi. My question is, now that China is pulling back from Taiwan, uh, how would the relation between China and Philippines, Philippines and US, uh, do you foresee, and what should the role of India be in terms of a defense provider to Philippines?
>> Okay. Yes, please.
>> Thank you for this fruitful session. I am Yes, and I'm a student of public policy in Delhi University. Sir, my question is about the civil services, or the topmost hierarchy exam. It is fully consisted of the Western philosophers like Plato to modern-day Ludwig, but it's lacking the essence of the Asiatic values, and it, it also encourages to stick to the Western world, like it's like seeing India from the Western lens. How can we, uh, eradicate this kind of dilemma? Thank you, sir.
>> All yours. Now, Europe has, uh, its own history, and they are tribal peoples. They never developed a hydraulic system through intensive irrigation and a bureaucracy to organize large numbers in a predictable way. Till today, they remain the tribal people. It gives them the charm. You travel 100 kilometers, different wines, cheeses, hams, different terroir. So when they put the EU together, the original founding principle was a Catholic principle of subsidiarity, that you should never take from a unit more than you have to, because you must respect the integrity of that unit. This is a Roman Catholic Church which says that every parish is responsible for its own accounts. But it grew and grew, and today there's a lot of resentment. I did a trip talking to people, giving lectures, Luxembourg to Czech Republic to Slovakia, Hungary, Croatia. The smaller countries are not happy. So the European construction might have gone too far. Now, under the shock of America's change of policy, I think there have to be some serious rethinking in Europe. And they have taken liberties with themselves by having short work weeks, long summer vacations, uh, strong rules governing employment, and the result is they're becoming less competitive. And worst of all, in an age of AI where energy is the most important, they are getting themselves into a high energy cost regime. The per unit electricity cost household in China is 8 cents per kilowatt hour. In Germany, it's 40 cents. In France, it's maybe 25 cents because they have nuclear power. This is key. And in China, it's coming down year after year because you've got to process data and you need energy. So I, I don't feel hopeful for Europe in the short term. I think they'll go through a period of crisis, but they have very clever people. They are great philosophers. They have enormous experiences. I think from their own traditions, they will find a way to get themselves out eventually, but it will take time.
Uh, should India get involved in, uh, in helping the Philippines in the South China Sea? Um, of course not. I mean, you can, you can give moral support, but this is something you don't understand. And even the Americans don't want to get too involved. When the Philippines were taken from the Spanish by the Americans, there was a treaty, I think around early 19th century, and it actually marked longitude 118 degrees as where the Philippines begin. So the Philippines have no birth certificate to any island in the South China Sea. All their claims proceeded from UNCLOS, which says that if you have territory, then you have a maritime claim. And the tribunal, to which China did not participate, judged that there is not a single island in the South China Sea. Therefore, all claims in the South China Sea arise not from territory, but from maritime claims. So, China was outmaneuvered because they didn't have the Anglo-Saxon lawyers to understand how this game is played. China said, "When I sign on to UNCLOS, I opted out from compulsory adjudication." The tribunal said, "No, no, no, no, no. Whether or not you can opt out is, is self-justiciable." So, China saw a trap. "You drag me in now, and then I can't get out." So he said, "No, I'm not getting involved, even for the first stage." So what did the tribunal do? First for the initial hearing, and then for the final hearing. Say, China, you're not there. We appoint lawyers on your behalf. They'll construct cases on your behalf. They will argue on your behalf, and your the judges you didn't appoint will appoint them for you. So it's not surprising that the tribunal ruled against China. But the publicity has already spread, and China looks as if it has been a difficult player. I tell the Chinese, I said, "Your legal case is stronger than the Philippines, but your moral case is dubious." Because if you're in Manila and you look beyond to the Scarborough Shoals, you in Palawan, you look beyond to the Second Thomas Shoals, these are just beyond your horizon. And China says, "Is this waters? Is this fair?" China says that the treaties it signed in the 19th century were unequal treaties. I see the Filipinos will say that the treaties signed between Spain and the US in the last century, before we were born, is very unequal to us. So I just leave this thought to the Chinese that in the end, please negotiate, and in this negotiation, the less others are involved, the better will be the outcome.
The third question, the Western lens, that's a big problem. I, I just had breakfast with, uh, Rajiv B. Srivastava, whom I knew as your ambassador in Croatia, and he's now running the Sushma Swaraj Foreign Services Institute, and we're talking about Chanakya and Arthashastra. He says, "Why are we studying all the Western philosophers, Kissinger, and so on, but not studying our own traditions?" Of course, we should still study the Western philosophers, but you should study Indian philosophers, Chinese philosophers, not just for our own edification, but the better to understand other parties and the way they think. So I fully agree that this colonial residue in our minds, we have to progressively exercise.
>> Okay, we have time for just one more round. Yeah. Yes, please. I'll come to you.
>> Um, thank you for your lecture. Ashutosh Singh, I'm a trustee at the IC. Uh, Trump and the US has recently withdrawn its support from 66, uh, international organizations, the UN, and a lot of climate-related and other organizations. Now, and Europe is diverting or cutting down its ODA or diverting a lot of their ODA towards Ukraine. So do you see China, and maybe to some extent India, stepping up and filling that gap? That would also give us a lot of soft power, I mean, especially in Africa and other parts of the world. Okay, I'll come to you.
>> Yes, my basic question is that we are finding that S-5 is, despite your name, please. I'm Vin Sharma. My basic question is that we are finding despite US trade, I mean, aggression, you know, trade barriers, you know, tariffs, etc., we are finding that China's trade surplus is rising, you know, its trade in the through other countries is also rising, you know, despite, you know, all these, you know, measures. So how do you see this, I mean, the, I mean, the entire, you know, scenario as far as this, I mean, aggression is concerned, you know, because ultimately it will impact, you know, the entire, I mean, the entire value chain as far as emerging markets are concerned, and the even the RCEP, you know, uh, RCEP initiative that you were talking about.
>> Okay, yes, please. What I wanted to say is, I never believed that China would be following this hierarchical condition, and I'm very happy to note that you have said that there is a hierarchy there. Now, I want to go back to 2002 when I was invited to give a keynote speech at the Beijing Normal University, and the professor after the keynote speech said, "Can you come into my class and address a few students, senior students?" So when I went there, then one of the students at the end of my talk said, "Professor, what class do you come from?" I said, "What do you mean, what class do I come from? You know, what class? High class, elite, middle class?" I said, "You know, in our country, we have the film stars, the business tycoons, the billionaires. They are the elite. Now, where would you put me? Would you put me in the elite or would you put me in the middle class?" So, they all shut up because they knew that the billionaires and the money class are a separate class from the academic intellectuals.
>> Yeah. Okay. There was a comment. Uh, yes, please. Last question. My name is Chandra Vikash. Uh, I'm interim president for Earth Federation, uh, which replaces the dead and paralyzed United Nations. Why I'm making this very bold and unimaginable statement comes from my experiences in Singapore, which I hold as a fascinating example of Vasudhaiva Kutumbakam, which juxtaposed with Samuel Huntington's Clash of Civilizations is more like a concert of civilizations. The challenge with Singapore, I observed, is that it's too transactional. If Singapore could learn being transcendental from India, and you know, Vasudhaiva Kutumbakam could truly be an Earth Federation in which all the countries are provinces, and we stop the bleeding $2.7 trillion on military defenses and the repercussions it is having on intergenerational divide, intergenerational injustice is glaring at our face. It is so bad that younger generations are facing.
>> Will you please ask your question? Anxiety, huge commentary. So, sir, my question is simply that how can Singapore and India collaborate to become a transcendental Singapore, learning from India's premise of Kutumbakam, which we practice in our daily lives? Okay. Thank you.
>> I'm sorry. No, we, we are both material and spiritual at the same time. And in, in international affairs, there's hard politics, there's also soft politics, and also human relationships. And that the good diplomat plays it at all levels. If you don't have a strong army, however good a diplomat you are, you cannot be effective. Teddy Roosevelt used to say, "Carry a big stick, then you can speak softly and be very polite." But if you don't have a big stick, your politeness will be seen as weakness. So we should learn from each other. We should learn from the past. And we must keep a balance between being transcendental and being material, because if we lose that balance, we lose both. And that's the reason why Panchsheel is important because it marries the two. He has a high ideal, but he also recognizes the reality of politics on earth.
The other question on, um, savings, uh, I didn't fully understand the question, but it makes an important point that today, China and Hong Kong represent the biggest creditor country in the world. China, throughout all the COVID years, manufactured for the world. It now accounts for, I think, over a third of global manufacturing, and its surpluses grew from 500 billion to six to seven, and reached $1 trillion last year. The Chinese used to convert earnings into RMB and then invest foreign exchange in treasuries, but now they don't do it because they worry for the US dollar, and there are many pockets. Now, India has a high savings rate, 3%. But India, at this period of growth, needs capital infusion in addition to what it has on its own. Therefore, wherever you can get capital, including from China, take it, because that capital will pay for itself, and this is the fastest way to go fast. But of course, the money must be well used and not going into strange places. The most important aspect is the US dollar because the US fiscal deficit is now $38 trillion and growing uncontrollably. Servicing that debt is already bigger than the entire defense budget. It cannot be sustained. So Trump is very worried about this. When BRICS, when there were rumors circulating that BRICS was coming out with an alternative reserve currency, his immediate reaction was, "Neuralging," he said, "I'll sanction you 500%." Now, that showed fear, and this is what the US worries the most, because if the US dollar loses its reserve status, the pin which holds the whole machinery together will break. 800 military bases, 11 aircraft carrier battle groups. Who's paying for them? If US taxpayers are paying for them, they'll say, "No, I want butter, not guns." We are paying for them because we use the US dollar. But all of us now worry, which is why gold prices are shooting up. And India is probably the world's biggest importer of gold. So there is an instinct in this country that in this climate, gold is the most reliable. [applause]