(Picture: Mr Lee is congratulated by US-Asean Business Council president Alexander Feldman while US elder statesman Henry Kissinger looks on moments after the Minister Mentor received the lifetime achievement award from the council. - ST Photo)

WASHINGTON: Competition between the United States and a rising China is inevitable, but conflict between the two powers is not, Minister Mentor Lee Kuan Yew said yesterday.

'Unlike US-Soviet relations during the Cold War, there is no bitter, irreconcilable ideological conflict between the US and a China that has enthusiastically embraced the market,' he noted in his keynote address at the US-Asean Business Council's 25th anniversary gala dinner.

'(The Chinese leaders) have concluded that their best strategy is to build a strong and prosperous future and use their huge and increasingly highly skilled and educated workers to out-sell and out-build all others.'

So Beijing will try its best to avoid souring ties with Washington, or do anything that would jeopardise its 'peaceful rise' - a phrase the Chinese use to assuage concerns about their rising clout.

Nonetheless, Mr Lee said it was a surprise that Beijing put on a major military display of home-made weapons at its 60th National Day earlier this month.

The weaponry, from ballistic and cruise missile systems, a new fighter jet, airborne refuelling tankers to airborne early warning and control systems, would not have gone unnoticed by China's neighbours, as well as the US.

Mr Lee did not give his views on why Beijing mounted the display despite the unease it might have caused in the region.

He noted, however, that the Chinese military would become a modern, hi-tech outfit in two to three decades if it progressed at the current pace.

This could have implications for territorial disputes with its neighbours, particularly in the South China Sea. Beijing, for instance, is already patrolling some of the disputed fishing grounds with coastguard vessels and could follow up in future with a more powerful blue-water fleet.

'A blue-water fleet with aircraft carriers cannot just be to deter foreign intervention in a conflict between Taiwan and the mainland,' Mr Lee said.

Despite these impressive strides, however, China still faces many domestic challenges, such as endemic corruption, rural unrest and the lack of rule of law.

Chinese leaders recognise the seriousness of these problems and are not in denial, Mr Lee said, adding that he remained confident about China maintaining high growth rates for the next 20 years.

'China's rise is one facet of East Asia's modernisation growth story that began with Japan and the Meiji Revolution in 1868,' he told a crowd of 450 political and business elites after being conferred a lifetime achievement award for helping to foster US-Asean relations.

'China and India can and will catch up with the West in science and technology. They will restore Asia to its leading position before European colonialism enveloped them. The world order will be re-balanced.'

The re-balancing process will take time, particularly when it comes to making the Chinese economy a more consumerist one while ordinary Americans cut back on spending and try to save more.

In the midst of all these changing economic and political forces, Asean must integrate more closely or risk becoming marginalised, said Mr Lee.

-end of ST article