PM Lee Hsien Loong's Speech and Dialogue at the Council on Foreign Relations

Mr Evan Osnos: You have met over the course of the past few days with the President, you have met members of the National Security team, you have been on the Hill this morning. What have you gained from your interactions so far when it comes to the key message which you just drove home – which is about the importance of the US in the region?

PM Lee Hsien Loong: I take comfort from the fact that nobody is talking about disengaging. They are talking about engaging in a different way, there is a feeling in the administration somehow that America has not quite got as long an end of the stick as it ought to, and they would like to rebalance. Maybe in terms of blood and treasure, maybe in terms of market rules, maybe in terms of influence in the world. But the world has changed and America would like to have an adjustment. I can completely understand that.

But I am reassured, talking to quite a number of the officials – I have not met so many on the Hill, I am going to see some people this afternoon – that they know that America’s fate depends on what happens in the rest of the world. I think they also know that America, because it has taken a very open and generous approach, has enabled a stability and prosperity in the world which others have benefited from, and so too the United States. You have been the most open market in the world, the Europeans deny it but I think it is true, the Japanese raise an eyebrow but I think it is also true, and now the Americans are saying why should that be so - the others should be as open as us. I can tolerate the Japanese, I could accept the Europeans, but now the Chinese are a different order of magnitude – they ought to be like us. And I think it is reasonable to push for that but if you want that to happen overnight it may well come to grief. 

Mr Osnos: You were last here in August 2016. Quite a bit of it has changed since then. Do you sense the changes are political, they are cyclical in nature, or do you sense that there is a fundamental change in America’s approach to Asia? 

PM Lee: Well, it is a result of an election process, those were your rules, this is your outcome – and the fact that you now have this outcome has created a new fact. You are in a new position – and the policies which this President will pursue, and which this administration will try to implement, will create expectations and new results, and some things will be done, some things will become undone – it could be the Iranian arrangements, certainly the TPP is undone. We have moved on to a new situation and you cannot go back to where you were. In politics, no party stays in power forever, at some point another party will come in and another mood will take over in the country and you will have a president who will pursue a different approach. But this would have become part of the discourse, part of the expectations, and I think it will be very, very difficult to go back to where you were on 1 November 2016.

Mr Osnos: You have been an advocate for the Trans-Pacific Partnership (TPP), you were disappointed that the US backed out of the TPP. What happens now to countries like yours that were so in favour of it? 

PM Lee: Well, we just accept that what we had put a lot of hopes on is not going to happen, and we will make the best of a new situation. This is where we are and we try to make progress from here. The other 11 members of the TPP negotiations are talking amongst ourselves to see what we can work out and develop on the basis of the work which has been done on the TPP, without a complete, new negotiation which nobody has any stomach for. And we hope we will be able to work something out but it is not easy.

Because had we started without the US, we could have worked out a deal. It would probably have looked quite different from what we worked out with you. When you came in, that totally changed the picture – because you brought with you first, your markets, secondly, your considerable influence on what you wanted. And what you wanted is not just access to our markets but also rules and intellectual property and human rights and so many other things. And having worked out a document, the basis of which is that you are the anchor participant, and now you are out, which part of these documents do I keep? And if I undo some part of it, will I unravel the whole scheme? And that is what our trade ministers are working very hard on.

Mr Osnos: How do you think America's withdrawal from the TPP and the general basket of ideas we call America First. How do you think that affects China's role in the region?

PM Lee: I think the Chinese are watching this carefully. On the one hand, they will be concerned about their bilateral relationship with you, where does it go, what are you trying to do, how can I establish a stable relationship with the United States. I, meaning China. Because they are used to not only stable government, but taking a long perspective on issues. In Washington, it is not possible to take such an Olympian view because your politics changes too quickly.

Mr Osnos: That is an understatement and I am with you 100 per cent.

PM Lee: So that is one aspect of it, but the other aspect of it is while they have got certain objectives and they will pursue these assiduously, quietly farming away and they will make friends and influence people whether or not you are there and if you are not there, then everybody else in the world will look around and say, "I want to be friends with both the US and the Chinese and the Chinese are ready and I will start with them."

Mr Osnos: Your late father, Lee Kuan Yew, used to talk about the balance of power. China is your greatest trading partner, but the United States is your greatest security partner. Is that balance of power becoming more difficult now?

PM Lee: It depends on how you work out your relationship with the Chinese. You need them to deal with a lot of issues. They have become stronger. They have become bigger. It means that you need their cooperation more, not just on bilateral issues, but on strategic things. To do climate change you must have them, otherwise no deal is reachable. To do nuclear non-proliferation, you must have them on board. To deal with North Korea, you must have them on board. So if you are able to work with them on a stable, gradually evolving relationship which gives them the space to grow their influence, but in a benign way, then we are fine. We remain friends with both. If you have a tense relationship, and one or both of the parties say, "You're either with me, or you're against me, then we're in a difficult spot. It could happen."

Mr Osnos: The Belt and Road Initiative which Xi Jinping has overseen, the Chinese talk about it as a new basis for stability and security in the region. How does it feel to you in the region?

PM Lee: Our view in Singapore, which is shared by many in the region is that it is a positive thing. The Chinese are going to grow their influence. It is going to happen. How is it going to fit in? And this is one coherent framework within which the Asian countries, Central Asian, Southeast Asian, South Asian can participate in. It means infrastructure, it means financing, it means connectivity, it also means influence and if you ask any of the countries in the region, they will say, "Yes, I want to participate. I want to trade. I want to do the business. I would like them to invest.” There are political sensitivities, but subject to that, there is a lot of business which needs to be done. At the same time, the region has prospered, not by doing business only with China, but also by doing business with America, with Europe and the rest of the world and I do not think any of the countries in the region would like to give that up, so provided the Belt and Road happens in such a way that all these external links open, stay open and the region remains an open region, I think it is a good thing.

Mr Osnos: Does Belt and Road pose a challenge to the United States?

PM Lee: Well, it is not whether Belt and Road poses a challenge to the United States - the question is how are you going to respond to a China which has got a GDP which will, within the next decade, or two at most, be as big as yours, world trade which is considerable, which has financial resources which are considerable. You cannot say I will deal with them on the basis that they will have an armed force the size of a middling European country and a global influence the size of - I think it will be invidious to name anybody - but you know what I mean. It cannot be. They are going to be a power. They want to be a big power. Question is, how can that happen constructively and benignly. I think Belt and Road is a constructive way to do it.

Mr Osnos: South China Sea, East China Sea, a subject of interest to many, a subject of interest to you as well, how do you see it playing out at the moment, do you see tensions continuing to grow, or is there something that the United states can play in that process?

PM Lee: I think they are different. The East China Sea, the issue is between China and Japan. These are two countries which have not really come to terms with the history of the war, and neither of them wants the Senkaku/Diaoyu dispute to blow up. But neither of them is going to give way. And therefore you could have a mishap and then you could have an escalation. It is already nearly happened more than once. The Japanese arrested the Chinese fishing boat, you have people exchanging, buzzing aeroplanes, buzzing one another, sometimes they shower each other with water hoses. So you could easily have a mishap and it could be very troublesome. You could have a mishap in South China Sea too. But it is different in one very important way – which is that the other claimant states in Southeast Asia, none of them want to collide with China. All of them have got major relationship with China over many fronts. On trade, on aid, on human resources. On direct financing of all kinds of projects. And South China Sea is one item, it is politically sensitive, it is nationalist. But it is not the only thing in the relationship and they do not want this to blow up the relationship. And they will not go to war on this. And therefore it sets a limit to how far things can boil over, but at the same time of course that, it means that, well, a different balance of outcomes can be expected.

Mr Osnos: What more would you like to see the United States play in that question?

PM Lee: United States is not a claimant state. You are a user of the South China Sea. Your ships sail through it. Your merchant vessels, your navy, your aircraft, sail over it. You have an interest in freedom of navigation. You have an interest in international law. Singapore has those interests too, freedom of navigation, international law, stability and security in the region. And I think that those are considerations which any president and any national security advisor or state or defence department will have to take into account.

Mr Osnos: Singapore will be the Chairman of ASEAN beginning next year, when you look at Southeast Asia today, one of the questions we are trying to figure out is whether there are two camps that are in effect, forming and one camp, whether it is the Philippines, and Malaysia that is creating greater, stronger relationship with China, and another camp. Is that the wrong way to look at it, or how do you see?

PM Lee: I think ASEAN works on the basis of consensus. It is not the 50 states of the United States of America, neither is it the 20-odd states of the EU. These are 10 sovereign countries which have come together in an association. Where there is an alignment of interests, and a consensus, of views, then there is an ASEAN position, where there is not, then we agree to disagree and we will discuss the matter again one day. On strategic issues there is no single strategic perspective. The threat assessments, the fundamental interests, the due political positions of the countries are very different. Indonesia and the Philippines are archipelagic states. Laos is a landlocked country that has no border with the South China Sea; it has a land border with China. Vietnam has a border with China. They have a relationship which goes back 2,000 years; invasions, wars and coexistence. Myanmar has a coastline on the Andaman Sea, not the South China Sea. And their two biggest neighbours are China and India. And they very much hope that they have other friends. And anybody else who is friends with them is their third friend. Including the United States, they want to be, so when you say you want to put them in a doghouse, well, then you reduce them back to their geographic neighbours and that has certain consequences. Singapore, we are in the middle of all this, we are one of the smallest, other than Brunei. We are the only country in the region, in fact, in the world with a Chinese ethnic majority, and yet not a Chinese country, but a multi-racial country. So, our perspectives are all severally different. And on some issues, the lowest common denominator is basic, but still worth having.

Mr Osnos: Myanmar, do you see a role for ASEAN in terms of addressing the humanitarian crisis there?

PM Lee: Yes ASEAN discussed this. It is not easy to do, because as I said, these are sovereign countries and we cannot just march in. We have no mandate, neither the capability. But there is a humanitarian crisis. And ASEAN issued a statement. And we have given humanitarian assistance. And we will continue to do so.

Mr Osnos: This week is a big week in Beijing, and I think a lot of people here would be curious for your assessment on what it means to have the 19th Party Congress introduce the new generation of leaders. Now let us put it differently. Xi Jinping is now enshrined in office, and has opened the next chapter of his leadership.

PM Lee: I do not think he was enshrined in office, only his words. Xi Jinping has consolidated his position. He has got a new lineup in the core leadership of the Politburo, the standing committee, also in the central military commission. He has got his ‘Xi Jinping's thought’ inscribed in the constitution. His own leadership position is pre-eminent. At the same time, I think there is a purpose to this which is to signal that this is the start of a new phase for China. They said 新时代 a new era. That means Mao's era, Deng's era and now Xi's era and an era which he envisages extending not just for the next five years or even ten years of two terms, but extending to 2050 and taking China to 100 years after the revolution. If you look for difference in emphasis, it is what the Chinese themselves say that with Mao, China stood up 站起来, with Deng, 富起来 – they got wealthy – and now with Xi – 强起来 – to get strong. What does strong mean? That is what everybody will be watching carefully.

Mr Osnos: What do you think it means?

PM Lee: He has set it out in his 14 points in his opening long speech, and none of them are completely new, starting with the fact that the party must be fully in charge and it includes economic growth, environmental considerations, welfare and the lives of people, strength internationally, and including strong armed forces. So all the ingredients are there which any normal great power would have to pay attention to. What you do not know is the balance, the tone, and the wisdom with which these elements will unfold and we will have to wait and see. With the generation who have grown up through the Cultural Revolution, they have known hardship and turmoil. They greatly treasure peace and stability. With the next generation, which has grown up during the period of reform and opening up, that means since 1980-ish and have only seen continuing progress, will they be a generation which you might say well – it is from warriors to engineers to poets and artists, or will it be that having not known the turbulence, they will feel that now that I am strong, let me show the world what I can do. And I think that is a big question. If you ask the present generation, they will swear to you that the next generation will make their calculations and know that peace is important, I hope so.

Mr Osnos: Singapore is one of the largest foreign investors in China.

PM Lee: According to the Chinese statistics we are the biggest foreign investor in China. I think that includes other investments which funnel through China but I take it at face value.

Mr Osnos: So you are in an especially good position to help us try and gauge the health of the Chinese economy; their strength, their weakness. How do you assess that?

PM Lee: I think there is a lot of energy and vibrancy. You have to look at it qualitatively, the sort of companies which are generating the sort of innovation which is fermenting in Beijing, in Zhong Guan Cun near the university, in Shenzhen where people come from all over China and startup companies, the mood is not very different from Silicon Valley, and the quality of the people and in fact, the quality of the companies which have been generating technology, they are equal to any in the world. They may not have as many companies which are like Google or Facebook, but if you look at Tencent or Alibaba or Huawei, they are not just copying others' technology. So I think the talent is there, the energy is there. There are structural issues which have to be dealt with -- the SOEs, the taxes, the 户口 household registration system, what do we do with it; the agricultural sector, how do you manage the exchange rate, the banks and your loans and debts. But these things take time to handle. On the one hand, having talked to their professionals in the economic management, we know that they have very competent people who understand all these. They think and talk using the same jargon translated into Chinese as central bankers and economic managers anyway. The question is whether you have got the right combination at the political-economic level. That means in the Politburo or amongst the top leaders who put this quite high up in their agenda and can make the political decisions and tradeoffs in order to stage and to manage very delicate transformations which economically are critical but politically are very hard to do.

Mr Osnos: There has been a lot of hope that perhaps as Xi enters his second term of office, they may begin to undertake more of these kind of structural reforms?

PM Lee: Well, it could be. I think you have more scope to do that but I think that he wants to do many things and he will balance these off against his social objectives, political objectives. He has got other strategic preoccupations. If you look at his speeches at the Congress and also when he announced his list, economics is there but it is not the first big item.

Mr Osnos: I need to get your sense of the DPRK. You have met with the President recently. This is the crisis of the moment in the region. I am curious because you have also got the military perspective. How serious do you think the risk of military confrontation is and what do you think the US should be doing to avoid it?

PM Lee: You will always have the risk of a miscalculation. This administration has made some very strong statements but at the same time you have made clear that you do not want to go to war. The North Koreans are not suicidal. They are past masters at thunders and alarums and not without success. If you are lucky, that is how you can get past this hard point. If you are not, you could have a miscalculation. I think so far, you have not had a miscalculation. We hope that will continue so. The difference this time is they now have more nuclear weapons and more powerful missiles, ICBMs. So that raises the stakes but it does not yet qualitatively and suddenly change the picture. Because you have never been able to say you were completely without risk, before the latest missile tests. So it is up to the US how you want to respond, and what pressure you want to apply to them. You have to apply pressure, you also have to talk. You cannot not talk because if you do not talk, you cannot get anywhere. If you only talk, then nothing will happen. You will just be strung out. You have gone through this so many times before. But to play this game, you need to work with the Chinese, and the Russians must be somewhere in the picture. Most of all, you must have the South Koreans and the Japanese on your side. And if they are not on your side, you will have a hard spot. But even if you want to do something decisive, if the South Koreans are not with you, you cannot do that. So you have to have that diplomacy as well as that realpolitik.

Mr Osnos: In your comments at the Rose Garden that day, you mentioned the importance of dialogue. Are you confident, optimistic, that we will get to dialogue before confrontation?

PM Lee: I think that is a reasonable proposition. Whether the dialogue will reach an outcome before you have a confrontation, I cannot say.

Q: How do you manage the ethnic makeup of your Cabinet?

PM Lee: How do I manage the ethnic make-up? I choose good people and I hope that I have a multi-ethnic cabinet – which so far has been the case. We are a multi-racial society and I think it is very important that the leadership reflects that and particularly because our party, the People’s Action Party, has made multi-racialism a core tenet of nation-building and our leadership team within the Party reflects that and when I choose the Cabinet, I can choose good people who are of Chinese descent, Indians, Malays and others. And so far, it has worked.

Q: First, do you see the Trump administration – quite apart from the issue of North Korea – as having a coherent Asia strategy? And if so, what do you see this as being. If not, how do you think it hurts the region and US interests. What would you like to see more from the US administration? Second question relates to the Party Congress. I was wondering if you can share your thoughts on what the key takeaways are for South-East Asia from that Congressional speech.

PM Lee: I think the Trump administration is still developing its Asian strategy, just as it is still developing its strategies on many parts of the world. But we have met your secretaries. Mattis has come out. Tillerson has come out. Vice President Pence has come out. NSA advisor McMaster has come out. They have said the right things. That has been assuring. They said that we may be rethinking our approach but we are not disengaging from the region. And that is a very important message. They want to do more with the region, they are looking for a way to do that. And we can empathise with that completely. I think we are looking forward to hearing the same message when the President comes out in a few weeks’ time. Your second question, what does Southeast Asia take away from the Chinese Party Congress - I think our conclusion is that they will continue in the direction which they have been going over the last few years. They are confirmed in this. The leadership team, is the team which we expected to see, and the key thing is President Xi is still in the driver seat and setting the direction. We will continue to want to do more with China, at the same time as we adjust to the realities of a very different power balance.

Q: I have one question, it goes to the issue of the South China Sea and the matter of ASEAN unity. It seems that on a number of occasions, I can recall at least a couple of ASEAN meetings, where there was difficulty in achieving consensus on the South China Sea issue, particularly with regard to a Code of Conduct. Do you see better prospects going forward for ASEAN unity, which would appear to me to be critical in forging some kind of diplomatic solution to this issue?

PM Lee: Well, I explained just now why ASEAN countries have different strategic perspectives and nowhere is this more salient than when it comes to the South China Sea. Because in the South China Sea, some are claimant states like the Philippines, Vietnam, Brunei and Malaysia. Some are not claimant states but have a stake in freedom of navigation, international law and that includes many of the other ASEAN countries including Singapore. Some have no coastline, they are landlocked but they are adjacent neighbours to China and they do most of their business with China. And they have very different perspectives the issues. So, when ten of these countries are in one group and they are looking for a consensus, I think that consensus cannot be a very encompassing or powerful one. It will be significant in terms of saying we want peace, we want stability, we want to avoid conflict, and we would like to have a Code of Conduct. There is no disagreement within the ASEAN countries that we will like a Code of Conduct with China. We have a framework agreed of what the Code of Conduct could contain. Now, the next step is to actually start negotiating this Code of Conduct which I anticipate will take quite a long time because no sovereign country, particularly a big one, likely commits itself to be bound to certain commitments which you can then be held to, particularly when the status quo does not bind it. So to reach a point when the Chinese will agree to be bound by a Code of Conduct and the ASEAN states are happy with the Code of Conduct, I think this will be the work of several ASEAN chairmanships. We hope to start it next year, I do not think we will finish it next year.

Q: President Obama had the rebalancing strategy – the military element, the political element and of course, an economic element. It is up to President Trump so he can always change that strategy. He has withdrawn from the TPP, he has decided not to go for the East Asia Summit. What advice would you give him as to what an alternative approach for US strategy toward the region would look like, particularly in the economic area? And the second question is what advice vis a vis China would you give the administration, in terms of the administration, would be most effective in securing their interests vis a vis China?

PM Lee: We have hoped for the TPP, it is not to be, so we move on. Even if Hillary had won, it is not a foregone conclusion that the TPP would have passed. There would have been a big fight on the hill, it may have gone through, it may not. Certainly you cannot expect Trump to come in and then fight for this having denounced it in his campaign so perhaps it is better that he makes his position clear upfront and then we move on. What is an alternative to the TPP, I think it is not the right time to start new, ambitious trade negotiations. The announced policy of this administration is to work bilaterally, and I think the belief is that bilaterally you are bigger than any other partners like to come along and you are likely to get a better deal. As a result of which I think not that many partners will be keen to work with you bilaterally. You have to manage that. I would say in this situation, it is not time to start something new but do no harm. Do not take steps which will damage the existing cooperation, the existing substantial trade and investment links which are already there. Let time pass and maybe the second term of his administration or the next administration, well, the stars are in a different configuration and we can look for a different kind of deal. You cannot go back to where you were. That was a particular time, a particular place, time and tide has passed. You have to find a new alignment of the stars.

Mr Osnos: A Hippocratic Oath of international diplomacy.

Q: You have spoken often about the importance of a stable, constructive relationship between the United States and China for the region as a whole. The 19th Party Congress just ended, President Trump and Xi will be meeting soon. I have two questions. First, what are your near term expectations for that important US-China bilateral relationship? Secondly, as Singapore becomes the Chair of ASEAN next year, what can ASEAN do proactively as the pre-eminent multi-lateral platform in the region to tamp down a sort of rivalry that may be emerging?

PM Lee: I think what we hope we will be able to do is not to solve problems overnight but to begin to establish a shared frame of reference – a mutual understanding, how does he think, how do I think, where are the areas where we can work together. And then overtime we can work things out. I think if you try to work deals immediately, you can get them and I am quite sure that the Chinese side they will have some ready and have worked some out. But I am not sure if you make quick deals with them that you will, first, have a fundamental breakthrough and second, that you have the basis for a long-term sound relationship. You must have a clear understanding, they must have a clear understanding where you stand, and you must know, have some idea of what engagement you have with them. I mean, you will not be able to get his bottom card, but you must have some idea whether you can talk to him, whether you have a line to him, whether this is somebody you can do business with or not. I think this is important. So, when Xi Jinping went to Mar-a-Lago, there were all kinds of naysayers of how unwise it was of Trump to do this and so on. But I thought no harm could come from it because you cannot come to a sudden deal and it is good that the two presidents get to talk to each other and understand each another. And I think it turned out well. It does not mean you make a breakthrough but it was the basis on which thereafter they can talk about many issues. And I understand they ring up each other quite frequently, and there is a line – you need that line. One of the things which Henry Kissinger regularly laments is that the Chinese have a strategic view and the American presidents do not. And to some extent he is right but there is an exculpation which is that an American president cannot commit his successor. So, short of committing your successor at the beginning of the term, you have the chance to set the tone and to establish an understanding, what are you trying to do and then let us work together, to which we have four terms with which to work together. The Chinese tell us explicitly that they are looking at the new administration, that this is an administration which they say 功利主义，which means utilitarian, but what it really means is that, which is looking to deal with items one by one, and they are not quite sure how to figure you out and they are looking for a way to understand you. So, if you find them inscrutable, you must realise that westerners can be inscrutable too.

Q: Can you discuss Singapore’s interest in the Arctic and your own personal view about how a changing climate is affecting Singapore’s security?

PM Lee: We are keeping an interest in Arctic matters, meaning we would like to know how things are developing. We have joined the Arctic council as an observer and we are quite an active observer. And the reason is, if the Northeast Channel opens up, and you can sail from Europe to the far East via the Arctic – north of Siberia – that is a shorter route than going to the Suez Canal and Southeast Asia. We are in Southeast Asia and we are an important port, and if a shorter route opens up, we want to know about it, so that is very important. Climate change is something which we see all around us. If you ask the scientists, they will show you CO2 charts, which are really completely unambiguous; you can see global average temperature charts, not quite so unambiguous but very, very persuasive. And you can see typhoons and hurricanes. In Singapore, we do not have typhoons and hurricanes but we do have sea levels which rise. We do not have mountains, we have at most low hills. And we also see more extreme weather events – rainfall which is more intense, leading to flooding, and I expect – we have seen one or two so I am not sure – longer periods of more intense drought, which would put stress on our water supply systems. So, we are watching this very carefully. If things happen on a 100-year time frame, we have time to respond because we are just about less than 300 square miles. If I need to raise my land levels by a metre or two, well, I think I can find ways to do that. If it happens faster than that, well, we would have to scramble.

Q: I was just wondering if the Singapore business community, broadly speaking, has felt a chill with respect to doing business in the United States, and whether they feel the US is still as open for foreign partnerships and investments as it was previous to this administration?

PM Lee: I have not had specific negative concerns. We watch carefully your trade measures, actually they are countertrade measures. So, when you have antidumping cases or countervailing duties, we watch because we do not want to be caught up as collateral damage. It can happen. Investments wise, you have always had various Committee on Foreign Investment in the United States (CFIUS) restrictions, I am sure they are still there I have not noticed any recent cases. We have had cases before, which we have had to work through with previous administrations and fortunately, we were able to work out.

Q: My question is one, based on a premise that I hope that you can solidly refute. And it is a premise that you offered last year, which was that the TPP is inherently strategic, as valuable as it is economically, the strategic benefit is greater. Many observers, including myself, feared that you were right and that a major diminishment of the US strategic position in the region, and not just talking about ASEAN. I am not going into all the examples because of time, but Australia, Turnbull talking about the liability, what has happened in the Philippines, Malaysia, seeming a lot closer to the region, problems of reliability of alliances based on several things about burden sharing. On top of TPP, is it really unfair to say something we do not want to see – that you were right, and that a result of TPP not going forward with the United States, that the United States is perceived at least in the region as having a diminishing position beyond the inevitability that you talked about, about the rising China?

PM Lee: I stand by what I said – that the TPP was as valuable strategically as economically. Economic dividend was there, the strategic dividend goes beyond the participants in the TPP. It is a way to link both sides of the Pacific and to strengthen the considerable rationale which already exists – for America to be focused and engaged in the region. But it is not to be, you have lost the upside, it cannot be helped, we will move on. It is not to be, it is an impact on American credibility. When you negotiate, well, I do not think you can measure that and you will not be able to see that overnight. But I am sure that when you want to enter a negotiation with any party, it is to end in a treaty, which needs confirmation and which will be politically difficult. The partner will have to make an assessment how serious is this government of the United States and will it see through? And if it does not, is it worthwhile spending hundreds of hours and efforts to try and reach a deal which may be politically spiky at home in our countries and finally it does not go through and then what was it for. So, you can never measure these things. This is like when you draw a red line and then you do not take it seriously. Was there a pain? You did not see it but I am quite sure there was an impact.

Q: You mentioned India once, and I would be very interested in your elaborating on what role you think India can and will play vis-a-vis the strategic relationship between China and the United States. In other words, is there a bigger role that we will be seeing India play?

PM Lee: Well, India’s population is almost the size of China’s population, and it may even possibly overtake China’s population. Its economy is at a lower level – it is about a third the GDP of China, and per capita too; its foreign trade is one fifth of what the Chinese are. So, in terms of economic heft and international influence economically, it is not where the Chinese are. And I am sure your trade figures with China and with India will bear that out. From the point of view of the architecture of the region, we have long believed that India has got a very constructive and important role to play. And that is why when the East Asia Summit grouping was formed, it included all of the ASEAN countries in Southeast Asia, it included the Northeast Asia countries – China, South Korea and Japan – but it also included India, as a major participant, and Australia and New Zealand for good measure. That for a different reason because Australia and New Zealand, they are US allies and a grouping like that, it is not likely to turn hostile to the United States. For the same reason when we talk about trade agreement on the Western side of the Pacific, what we call the Regional Comprehensive Economic Partnership (RCEP). If you are not in the business, you will never have heard of these initials but they mean something. It is basically, it means ASEAN, Northeast Asia and India. Again, because we want India to be an active and constructive participant, bringing to the table something extra and balancing the overall picture. So, in principle, conceptually, when President Trump says he is going to Asia and he is going to make a strategic policy speech and talk about the Indo-Pacific, that is the right shade. Question is, What exactly will the Indian government do, where is their priority focus, to what extent are they able to re-orientate themselves from the subcontinent externally towards the region and open up and use trade as an instrument of policy, just like the Chinese do, just as the Americans have done in a strategic way, and therefore play their full role in the region. That is something to be seen, we are hoping that with Mr Modi, and with I think first they said “Look East”, now they say “Act East” policy, that would mean something and it would mean a greater integration of India into the region. But it is yet to be seen. The format in which the meetings take place, in fact, is the East Asia Summit, which is together with the ASEAN meetings, and unfortunately President Trump is unable to make it to this year’s East Asia Summit meeting, but actually that is the forum which gives body to the idea of an Indo-Pacific community. And we hope that although he cannot make it this year, in future years, he would be able to come. Next year, we are hosting it.

Q: I still remember three years ago right here, I asked you a question about Singapore’s role in helping cross straits dialogue, and you said Singapore would be happy if they want. And this year, it is one and a half year later after the Xi-Ma meeting in Singapore. Right now, the situation has changed. The communication has been suspended. What do you think is Singapore’s role in this regard, to resume the dialogue between the two sides and what is your suggestion for Beijing and Taipei to break the deadlock, particularly right after the 19th Party Congress?

PM Lee: I think we have a limited role. We hosted the Xi-Ma meeting in November 2015 and our job was to provide the room and tea cups. That was it. It is their meeting, and we were a neutral venue.They were both comfortable to come to Singapore and hold the meeting here and we were very happy to be the host and to have some spillover glory. They could not very well hold it in Shanghai, they could not hold it in Taipei and they do not want to hold it in Hong Kong so Singapore is a neutral place and I think that is useful and we are friends with both sides, therefore it could happen. What prevents it from happening now, I think there is a basic difference in perspectives and trust between the two sides because words matter a great deal, abstruse as they may be. The 1992 consensus, whatever that means was the basis from which China did business with KMT in Taiwan and now Tsai Ing Wen or the DPP has decided that she cannot use those words and she wants to find some other form of words which are different, supposedly the same but obviously to her own supporters, closer to a green position. And therefore ever so slightly, friendlier to a separate Taiwan. The Chinese have said no. It does not matter what it is, this is what we agreed on and this what we will stay on. And I can completely understand it, the Chinese position because even if you can accept a new form of words, you cannot go back to the 1992 consensus anymore and by salami tactics, one day you will get very close to somewhere where you do not want to be. So that is a very hard contradiction to settle. The Chinese cannot move. I cannot see Tsai Ing Wen going back and saying that I agree to the 1992 Consensus and she would lose all credibility and support from her base. And therefore you are at an impasse and the best you can hope for is just a standoff and things do not get worse. Things can go wrong and the Chinese are building up their armed forces including aircraft carriers in case things one day go wrong and we hope that day can be put off.

Q: Your grasp for detail is very impressive in contrast with some heads of state in this hemisphere. I have a domestic political question for you. You say that in politics, no party remains in power forever. Does that apply to Singapore?

PM Lee: I am sure it does. I do not know when it will happen but I will not want to make it happen sooner than it needs to.

Q: I would like to ask you on the previous question in which you articulated Singapore’s position on the challenge of climate change. I am wondering if you would be able to share with us whether and how the issue of climate change has factored into your bilateral dialogue with countries such as the United States, its announced withdrawal from the Paris Agreement or with Indonesia which has recurrent forest fires which has wrecked collateral damage on your country.

PM Lee: I have not discussed it with Americans bilaterally, I am not sure but maybe my environment officials would have surely touched based with their counterparts. We were active in discussing the Paris Agreement talks and helping to shape the consensus that came up. And we think that it is a serious global problem and one which cannot be solved without the major emitters which include the US, China, India and as well as the BRICs. Singapore will do our part. I used to say that even if we all stopped breathing in Singapore, it would not save the climate because we are so small but we will do our part, we cannot go beyond that and fall on a sword but our share we will do which means bringing down the emissions from business as usual and peaking by 2030. With our neighbours, with Indonesia the question of haze to us is a question of direct pollution and not climate change. It is just direct particulate pollution of the environment. Instead of fresh air you are getting unhealthy smog and that affects as many countries in the region and is something which ASEAN countries are working together in order to overcome and I think this Indonesian President, President Jokowi is taking very seriously and it has had an impact in Indonesia. We have had a better year this year, partly the winds have been favourable but I think significantly because the President has put officials’ jobs on the line and taken a very personal interest and shown that even in a big country you can get definite things done if the boss pays enough attention to it. There is a climate change angle too, these forest fires in Indonesia and other countries. In bad years, fires cover several thousand kilometres of forest, and not just the forest but the peatland under the forest just dried up and become very combustible, you are talking about C02 emissions in the order of gigatons and equivalent to the CO2 emissions of a country like Germany and you do not get any joy out of that at all. I mean it is not that you needed it to warm your house, to drive your car, to power your office computers, it just went up in smoke and is causing you the problem of global warming. So it is a very serious problem which has to be addressed.

Mr Osnos: It is just the prerogative of the moderator to ask one last question about the leadership of Singapore. You have said before that you may not stay in office after the age of 70. Do you have thoughts about the next Prime Minister?

PM Lee: Well, I just answered that question on CNBC, so you can look it up there.

Mr Osnos: What if we do not subscribe to CNBC?

PM Lee: My aim is not to be Prime Minister beyond 70. I am trying very hard, I have got a team in Cabinet, I have got strong people in the team, and amongst themselves, they have to take a little bit of time to sort out who should be the next leader.

Mr Osnos: Well, we hope that you would come back in any case, and we want to thank you again for your time today. Please join me in thanking the Prime Minister.

PM Lee: Thank you.

Mr Evan Osnos: You have met over the course of the past few days with the President, you have met members of the National Security team, you have been on the Hill this morning. What have you gained from your interactions so far when it comes to the key message which you just drove home – which is about the importance of the US in the region?

PM Lee Hsien Loong: I take comfort from the fact that nobody is talking about disengaging. They are talking about engaging in a different way, there is a feeling in the administration somehow that America has not quite got as long an end of the stick as it ought to, and they would like to rebalance. Maybe in terms of blood and treasure, maybe in terms of market rules, maybe in terms of influence in the world. But the world has changed and America would like to have an adjustment. I can completely understand that.

But I am reassured, talking to quite a number of the officials – I have not met so many on the Hill, I am going to see some people this afternoon – that they know that America’s fate depends on what happens in the rest of the world. I think they also know that America, because it has taken a very open and generous approach, has enabled a stability and prosperity in the world which others have benefited from, and so too the United States. You have been the most open market in the world, the Europeans deny it but I think it is true, the Japanese raise an eyebrow but I think it is also true, and now the Americans are saying why should that be so - the others should be as open as us. I can tolerate the Japanese, I could accept the Europeans, but now the Chinese are a different order of magnitude – they ought to be like us. And I think it is reasonable to push for that but if you want that to happen overnight it may well come to grief. 

Mr Osnos: You were last here in August 2016. Quite a bit of it has changed since then. Do you sense the changes are political, they are cyclical in nature, or do you sense that there is a fundamental change in America’s approach to Asia? 

PM Lee: Well, it is a result of an election process, those were your rules, this is your outcome – and the fact that you now have this outcome has created a new fact. You are in a new position – and the policies which this President will pursue, and which this administration will try to implement, will create expectations and new results, and some things will be done, some things will become undone – it could be the Iranian arrangements, certainly the TPP is undone. We have moved on to a new situation and you cannot go back to where you were. In politics, no party stays in power forever, at some point another party will come in and another mood will take over in the country and you will have a president who will pursue a different approach. But this would have become part of the discourse, part of the expectations, and I think it will be very, very difficult to go back to where you were on 1 November 2016.

Mr Osnos: You have been an advocate for the Trans-Pacific Partnership (TPP), you were disappointed that the US backed out of the TPP. What happens now to countries like yours that were so in favour of it? 

PM Lee: Well, we just accept that what we had put a lot of hopes on is not going to happen, and we will make the best of a new situation. This is where we are and we try to make progress from here. The other 11 members of the TPP negotiations are talking amongst ourselves to see what we can work out and develop on the basis of the work which has been done on the TPP, without a complete, new negotiation which nobody has any stomach for. And we hope we will be able to work something out but it is not easy.

Because had we started without the US, we could have worked out a deal. It would probably have looked quite different from what we worked out with you. When you came in, that totally changed the picture – because you brought with you first, your markets, secondly, your considerable influence on what you wanted. And what you wanted is not just access to our markets but also rules and intellectual property and human rights and so many other things. And having worked out a document, the basis of which is that you are the anchor participant, and now you are out, which part of these documents do I keep? And if I undo some part of it, will I unravel the whole scheme? And that is what our trade ministers are working very hard on.

Mr Osnos: How do you think America's withdrawal from the TPP and the general basket of ideas we call America First. How do you think that affects China's role in the region?

PM Lee: I think the Chinese are watching this carefully. On the one hand, they will be concerned about their bilateral relationship with you, where does it go, what are you trying to do, how can I establish a stable relationship with the United States. I, meaning China. Because they are used to not only stable government, but taking a long perspective on issues. In Washington, it is not possible to take such an Olympian view because your politics changes too quickly.

Mr Osnos: That is an understatement and I am with you 100 per cent.

PM Lee: So that is one aspect of it, but the other aspect of it is while they have got certain objectives and they will pursue these assiduously, quietly farming away and they will make friends and influence people whether or not you are there and if you are not there, then everybody else in the world will look around and say, "I want to be friends with both the US and the Chinese and the Chinese are ready and I will start with them."

Mr Osnos: Your late father, Lee Kuan Yew, used to talk about the balance of power. China is your greatest trading partner, but the United States is your greatest security partner. Is that balance of power becoming more difficult now?

PM Lee: It depends on how you work out your relationship with the Chinese. You need them to deal with a lot of issues. They have become stronger. They have become bigger. It means that you need their cooperation more, not just on bilateral issues, but on strategic things. To do climate change you must have them, otherwise no deal is reachable. To do nuclear non-proliferation, you must have them on board. To deal with North Korea, you must have them on board. So if you are able to work with them on a stable, gradually evolving relationship which gives them the space to grow their influence, but in a benign way, then we are fine. We remain friends with both. If you have a tense relationship, and one or both of the parties say, "You're either with me, or you're against me, then we're in a difficult spot. It could happen."

Mr Osnos: The Belt and Road Initiative which Xi Jinping has overseen, the Chinese talk about it as a new basis for stability and security in the region. How does it feel to you in the region?

PM Lee: Our view in Singapore, which is shared by many in the region is that it is a positive thing. The Chinese are going to grow their influence. It is going to happen. How is it going to fit in? And this is one coherent framework within which the Asian countries, Central Asian, Southeast Asian, South Asian can participate in. It means infrastructure, it means financing, it means connectivity, it also means influence and if you ask any of the countries in the region, they will say, "Yes, I want to participate. I want to trade. I want to do the business. I would like them to invest.” There are political sensitivities, but subject to that, there is a lot of business which needs to be done. At the same time, the region has prospered, not by doing business only with China, but also by doing business with America, with Europe and the rest of the world and I do not think any of the countries in the region would like to give that up, so provided the Belt and Road happens in such a way that all these external links open, stay open and the region remains an open region, I think it is a good thing.

Mr Osnos: Does Belt and Road pose a challenge to the United States?

PM Lee: Well, it is not whether Belt and Road poses a challenge to the United States - the question is how are you going to respond to a China which has got a GDP which will, within the next decade, or two at most, be as big as yours, world trade which is considerable, which has financial resources which are considerable. You cannot say I will deal with them on the basis that they will have an armed force the size of a middling European country and a global influence the size of - I think it will be invidious to name anybody - but you know what I mean. It cannot be. They are going to be a power. They want to be a big power. Question is, how can that happen constructively and benignly. I think Belt and Road is a constructive way to do it.

Mr Osnos: South China Sea, East China Sea, a subject of interest to many, a subject of interest to you as well, how do you see it playing out at the moment, do you see tensions continuing to grow, or is there something that the United states can play in that process?

PM Lee: I think they are different. The East China Sea, the issue is between China and Japan. These are two countries which have not really come to terms with the history of the war, and neither of them wants the Senkaku/Diaoyu dispute to blow up. But neither of them is going to give way. And therefore you could have a mishap and then you could have an escalation. It is already nearly happened more than once. The Japanese arrested the Chinese fishing boat, you have people exchanging, buzzing aeroplanes, buzzing one another, sometimes they shower each other with water hoses. So you could easily have a mishap and it could be very troublesome. You could have a mishap in South China Sea too. But it is different in one very important way – which is that the other claimant states in Southeast Asia, none of them want to collide with China. All of them have got major relationship with China over many fronts. On trade, on aid, on human resources. On direct financing of all kinds of projects. And South China Sea is one item, it is politically sensitive, it is nationalist. But it is not the only thing in the relationship and they do not want this to blow up the relationship. And they will not go to war on this. And therefore it sets a limit to how far things can boil over, but at the same time of course that, it means that, well, a different balance of outcomes can be expected.

Mr Osnos: What more would you like to see the United States play in that question?

PM Lee: United States is not a claimant state. You are a user of the South China Sea. Your ships sail through it. Your merchant vessels, your navy, your aircraft, sail over it. You have an interest in freedom of navigation. You have an interest in international law. Singapore has those interests too, freedom of navigation, international law, stability and security in the region. And I think that those are considerations which any president and any national security advisor or state or defence department will have to take into account.

Mr Osnos: Singapore will be the Chairman of ASEAN beginning next year, when you look at Southeast Asia today, one of the questions we are trying to figure out is whether there are two camps that are in effect, forming and one camp, whether it is the Philippines, and Malaysia that is creating greater, stronger relationship with China, and another camp. Is that the wrong way to look at it, or how do you see?

PM Lee: I think ASEAN works on the basis of consensus. It is not the 50 states of the United States of America, neither is it the 20-odd states of the EU. These are 10 sovereign countries which have come together in an association. Where there is an alignment of interests, and a consensus, of views, then there is an ASEAN position, where there is not, then we agree to disagree and we will discuss the matter again one day. On strategic issues there is no single strategic perspective. The threat assessments, the fundamental interests, the due political positions of the countries are very different. Indonesia and the Philippines are archipelagic states. Laos is a landlocked country that has no border with the South China Sea; it has a land border with China. Vietnam has a border with China. They have a relationship which goes back 2,000 years; invasions, wars and coexistence. Myanmar has a coastline on the Andaman Sea, not the South China Sea. And their two biggest neighbours are China and India. And they very much hope that they have other friends. And anybody else who is friends with them is their third friend. Including the United States, they want to be, so when you say you want to put them in a doghouse, well, then you reduce them back to their geographic neighbours and that has certain consequences. Singapore, we are in the middle of all this, we are one of the smallest, other than Brunei. We are the only country in the region, in fact, in the world with a Chinese ethnic majority, and yet not a Chinese country, but a multi-racial country. So, our perspectives are all severally different. And on some issues, the lowest common denominator is basic, but still worth having.

Mr Osnos: Myanmar, do you see a role for ASEAN in terms of addressing the humanitarian crisis there?

PM Lee: Yes ASEAN discussed this. It is not easy to do, because as I said, these are sovereign countries and we cannot just march in. We have no mandate, neither the capability. But there is a humanitarian crisis. And ASEAN issued a statement. And we have given humanitarian assistance. And we will continue to do so.

Mr Osnos: This week is a big week in Beijing, and I think a lot of people here would be curious for your assessment on what it means to have the 19th Party Congress introduce the new generation of leaders. Now let us put it differently. Xi Jinping is now enshrined in office, and has opened the next chapter of his leadership.

PM Lee: I do not think he was enshrined in office, only his words. Xi Jinping has consolidated his position. He has got a new lineup in the core leadership of the Politburo, the standing committee, also in the central military commission. He has got his ‘Xi Jinping's thought’ inscribed in the constitution. His own leadership position is pre-eminent. At the same time, I think there is a purpose to this which is to signal that this is the start of a new phase for China. They said 新时代 a new era. That means Mao's era, Deng's era and now Xi's era and an era which he envisages extending not just for the next five years or even ten years of two terms, but extending to 2050 and taking China to 100 years after the revolution. If you look for difference in emphasis, it is what the Chinese themselves say that with Mao, China stood up 站起来, with Deng, 富起来 – they got wealthy – and now with Xi – 强起来 – to get strong. What does strong mean? That is what everybody will be watching carefully.

Mr Osnos: What do you think it means?

PM Lee: He has set it out in his 14 points in his opening long speech, and none of them are completely new, starting with the fact that the party must be fully in charge and it includes economic growth, environmental considerations, welfare and the lives of people, strength internationally, and including strong armed forces. So all the ingredients are there which any normal great power would have to pay attention to. What you do not know is the balance, the tone, and the wisdom with which these elements will unfold and we will have to wait and see. With the generation who have grown up through the Cultural Revolution, they have known hardship and turmoil. They greatly treasure peace and stability. With the next generation, which has grown up during the period of reform and opening up, that means since 1980-ish and have only seen continuing progress, will they be a generation which you might say well – it is from warriors to engineers to poets and artists, or will it be that having not known the turbulence, they will feel that now that I am strong, let me show the world what I can do. And I think that is a big question. If you ask the present generation, they will swear to you that the next generation will make their calculations and know that peace is important, I hope so.

Mr Osnos: Singapore is one of the largest foreign investors in China.

PM Lee: According to the Chinese statistics we are the biggest foreign investor in China. I think that includes other investments which funnel through China but I take it at face value.

Mr Osnos: So you are in an especially good position to help us try and gauge the health of the Chinese economy; their strength, their weakness. How do you assess that?

PM Lee: I think there is a lot of energy and vibrancy. You have to look at it qualitatively, the sort of companies which are generating the sort of innovation which is fermenting in Beijing, in Zhong Guan Cun near the university, in Shenzhen where people come from all over China and startup companies, the mood is not very different from Silicon Valley, and the quality of the people and in fact, the quality of the companies which have been generating technology, they are equal to any in the world. They may not have as many companies which are like Google or Facebook, but if you look at Tencent or Alibaba or Huawei, they are not just copying others' technology. So I think the talent is there, the energy is there. There are structural issues which have to be dealt with -- the SOEs, the taxes, the 户口 household registration system, what do we do with it; the agricultural sector, how do you manage the exchange rate, the banks and your loans and debts. But these things take time to handle. On the one hand, having talked to their professionals in the economic management, we know that they have very competent people who understand all these. They think and talk using the same jargon translated into Chinese as central bankers and economic managers anyway. The question is whether you have got the right combination at the political-economic level. That means in the Politburo or amongst the top leaders who put this quite high up in their agenda and can make the political decisions and tradeoffs in order to stage and to manage very delicate transformations which economically are critical but politically are very hard to do.

Mr Osnos: There has been a lot of hope that perhaps as Xi enters his second term of office, they may begin to undertake more of these kind of structural reforms?

PM Lee: Well, it could be. I think you have more scope to do that but I think that he wants to do many things and he will balance these off against his social objectives, political objectives. He has got other strategic preoccupations. If you look at his speeches at the Congress and also when he announced his list, economics is there but it is not the first big item.

Mr Osnos: I need to get your sense of the DPRK. You have met with the President recently. This is the crisis of the moment in the region. I am curious because you have also got the military perspective. How serious do you think the risk of military confrontation is and what do you think the US should be doing to avoid it?

PM Lee: You will always have the risk of a miscalculation. This administration has made some very strong statements but at the same time you have made clear that you do not want to go to war. The North Koreans are not suicidal. They are past masters at thunders and alarums and not without success. If you are lucky, that is how you can get past this hard point. If you are not, you could have a miscalculation. I think so far, you have not had a miscalculation. We hope that will continue so. The difference this time is they now have more nuclear weapons and more powerful missiles, ICBMs. So that raises the stakes but it does not yet qualitatively and suddenly change the picture. Because you have never been able to say you were completely without risk, before the latest missile tests. So it is up to the US how you want to respond, and what pressure you want to apply to them. You have to apply pressure, you also have to talk. You cannot not talk because if you do not talk, you cannot get anywhere. If you only talk, then nothing will happen. You will just be strung out. You have gone through this so many times before. But to play this game, you need to work with the Chinese, and the Russians must be somewhere in the picture. Most of all, you must have the South Koreans and the Japanese on your side. And if they are not on your side, you will have a hard spot. But even if you want to do something decisive, if the South Koreans are not with you, you cannot do that. So you have to have that diplomacy as well as that realpolitik.

Mr Osnos: In your comments at the Rose Garden that day, you mentioned the importance of dialogue. Are you confident, optimistic, that we will get to dialogue before confrontation?

PM Lee: I think that is a reasonable proposition. Whether the dialogue will reach an outcome before you have a confrontation, I cannot say.

Q: How do you manage the ethnic makeup of your Cabinet?

PM Lee: How do I manage the ethnic make-up? I choose good people and I hope that I have a multi-ethnic cabinet – which so far has been the case. We are a multi-racial society and I think it is very important that the leadership reflects that and particularly because our party, the People’s Action Party, has made multi-racialism a core tenet of nation-building and our leadership team within the Party reflects that and when I choose the Cabinet, I can choose good people who are of Chinese descent, Indians, Malays and others. And so far, it has worked.

Q: First, do you see the Trump administration – quite apart from the issue of North Korea – as having a coherent Asia strategy? And if so, what do you see this as being. If not, how do you think it hurts the region and US interests. What would you like to see more from the US administration? Second question relates to the Party Congress. I was wondering if you can share your thoughts on what the key takeaways are for South-East Asia from that Congressional speech.

PM Lee: I think the Trump administration is still developing its Asian strategy, just as it is still developing its strategies on many parts of the world. But we have met your secretaries. Mattis has come out. Tillerson has come out. Vice President Pence has come out. NSA advisor McMaster has come out. They have said the right things. That has been assuring. They said that we may be rethinking our approach but we are not disengaging from the region. And that is a very important message. They want to do more with the region, they are looking for a way to do that. And we can empathise with that completely. I think we are looking forward to hearing the same message when the President comes out in a few weeks’ time. Your second question, what does Southeast Asia take away from the Chinese Party Congress - I think our conclusion is that they will continue in the direction which they have been going over the last few years. They are confirmed in this. The leadership team, is the team which we expected to see, and the key thing is President Xi is still in the driver seat and setting the direction. We will continue to want to do more with China, at the same time as we adjust to the realities of a very different power balance.

Q: I have one question, it goes to the issue of the South China Sea and the matter of ASEAN unity. It seems that on a number of occasions, I can recall at least a couple of ASEAN meetings, where there was difficulty in achieving consensus on the South China Sea issue, particularly with regard to a Code of Conduct. Do you see better prospects going forward for ASEAN unity, which would appear to me to be critical in forging some kind of diplomatic solution to this issue?

PM Lee: Well, I explained just now why ASEAN countries have different strategic perspectives and nowhere is this more salient than when it comes to the South China Sea. Because in the South China Sea, some are claimant states like the Philippines, Vietnam, Brunei and Malaysia. Some are not claimant states but have a stake in freedom of navigation, international law and that includes many of the other ASEAN countries including Singapore. Some have no coastline, they are landlocked but they are adjacent neighbours to China and they do most of their business with China. And they have very different perspectives the issues. So, when ten of these countries are in one group and they are looking for a consensus, I think that consensus cannot be a very encompassing or powerful one. It will be significant in terms of saying we want peace, we want stability, we want to avoid conflict, and we would like to have a Code of Conduct. There is no disagreement within the ASEAN countries that we will like a Code of Conduct with China. We have a framework agreed of what the Code of Conduct could contain. Now, the next step is to actually start negotiating this Code of Conduct which I anticipate will take quite a long time because no sovereign country, particularly a big one, likely commits itself to be bound to certain commitments which you can then be held to, particularly when the status quo does not bind it. So to reach a point when the Chinese will agree to be bound by a Code of Conduct and the ASEAN states are happy with the Code of Conduct, I think this will be the work of several ASEAN chairmanships. We hope to start it next year, I do not think we will finish it next year.

Q: President Obama had the rebalancing strategy – the military element, the political element and of course, an economic element. It is up to President Trump so he can always change that strategy. He has withdrawn from the TPP, he has decided not to go for the East Asia Summit. What advice would you give him as to what an alternative approach for US strategy toward the region would look like, particularly in the economic area? And the second question is what advice vis a vis China would you give the administration, in terms of the administration, would be most effective in securing their interests vis a vis China?

PM Lee: We have hoped for the TPP, it is not to be, so we move on. Even if Hillary had won, it is not a foregone conclusion that the TPP would have passed. There would have been a big fight on the hill, it may have gone through, it may not. Certainly you cannot expect Trump to come in and then fight for this having denounced it in his campaign so perhaps it is better that he makes his position clear upfront and then we move on. What is an alternative to the TPP, I think it is not the right time to start new, ambitious trade negotiations. The announced policy of this administration is to work bilaterally, and I think the belief is that bilaterally you are bigger than any other partners like to come along and you are likely to get a better deal. As a result of which I think not that many partners will be keen to work with you bilaterally. You have to manage that. I would say in this situation, it is not time to start something new but do no harm. Do not take steps which will damage the existing cooperation, the existing substantial trade and investment links which are already there. Let time pass and maybe the second term of his administration or the next administration, well, the stars are in a different configuration and we can look for a different kind of deal. You cannot go back to where you were. That was a particular time, a particular place, time and tide has passed. You have to find a new alignment of the stars.

Mr Osnos: A Hippocratic Oath of international diplomacy.

Q: You have spoken often about the importance of a stable, constructive relationship between the United States and China for the region as a whole. The 19th Party Congress just ended, President Trump and Xi will be meeting soon. I have two questions. First, what are your near term expectations for that important US-China bilateral relationship? Secondly, as Singapore becomes the Chair of ASEAN next year, what can ASEAN do proactively as the pre-eminent multi-lateral platform in the region to tamp down a sort of rivalry that may be emerging?

PM Lee: I think what we hope we will be able to do is not to solve problems overnight but to begin to establish a shared frame of reference – a mutual understanding, how does he think, how do I think, where are the areas where we can work together. And then overtime we can work things out. I think if you try to work deals immediately, you can get them and I am quite sure that the Chinese side they will have some ready and have worked some out. But I am not sure if you make quick deals with them that you will, first, have a fundamental breakthrough and second, that you have the basis for a long-term sound relationship. You must have a clear understanding, they must have a clear understanding where you stand, and you must know, have some idea of what engagement you have with them. I mean, you will not be able to get his bottom card, but you must have some idea whether you can talk to him, whether you have a line to him, whether this is somebody you can do business with or not. I think this is important. So, when Xi Jinping went to Mar-a-Lago, there were all kinds of naysayers of how unwise it was of Trump to do this and so on. But I thought no harm could come from it because you cannot come to a sudden deal and it is good that the two presidents get to talk to each other and understand each another. And I think it turned out well. It does not mean you make a breakthrough but it was the basis on which thereafter they can talk about many issues. And I understand they ring up each other quite frequently, and there is a line – you need that line. One of the things which Henry Kissinger regularly laments is that the Chinese have a strategic view and the American presidents do not. And to some extent he is right but there is an exculpation which is that an American president cannot commit his successor. So, short of committing your successor at the beginning of the term, you have the chance to set the tone and to establish an understanding, what are you trying to do and then let us work together, to which we have four terms with which to work together. The Chinese tell us explicitly that they are looking at the new administration, that this is an administration which they say 功利主义，which means utilitarian, but what it really means is that, which is looking to deal with items one by one, and they are not quite sure how to figure you out and they are looking for a way to understand you. So, if you find them inscrutable, you must realise that westerners can be inscrutable too.

Q: Can you discuss Singapore’s interest in the Arctic and your own personal view about how a changing climate is affecting Singapore’s security?

PM Lee: We are keeping an interest in Arctic matters, meaning we would like to know how things are developing. We have joined the Arctic council as an observer and we are quite an active observer. And the reason is, if the Northeast Channel opens up, and you can sail from Europe to the far East via the Arctic – north of Siberia – that is a shorter route than going to the Suez Canal and Southeast Asia. We are in Southeast Asia and we are an important port, and if a shorter route opens up, we want to know about it, so that is very important. Climate change is something which we see all around us. If you ask the scientists, they will show you CO2 charts, which are really completely unambiguous; you can see global average temperature charts, not quite so unambiguous but very, very persuasive. And you can see typhoons and hurricanes. In Singapore, we do not have typhoons and hurricanes but we do have sea levels which rise. We do not have mountains, we have at most low hills. And we also see more extreme weather events – rainfall which is more intense, leading to flooding, and I expect – we have seen one or two so I am not sure – longer periods of more intense drought, which would put stress on our water supply systems. So, we are watching this very carefully. If things happen on a 100-year time frame, we have time to respond because we are just about less than 300 square miles. If I need to raise my land levels by a metre or two, well, I think I can find ways to do that. If it happens faster than that, well, we would have to scramble.

Q: I was just wondering if the Singapore business community, broadly speaking, has felt a chill with respect to doing business in the United States, and whether they feel the US is still as open for foreign partnerships and investments as it was previous to this administration?

PM Lee: I have not had specific negative concerns. We watch carefully your trade measures, actually they are countertrade measures. So, when you have antidumping cases or countervailing duties, we watch because we do not want to be caught up as collateral damage. It can happen. Investments wise, you have always had various Committee on Foreign Investment in the United States (CFIUS) restrictions, I am sure they are still there I have not noticed any recent cases. We have had cases before, which we have had to work through with previous administrations and fortunately, we were able to work out.

Q: My question is one, based on a premise that I hope that you can solidly refute. And it is a premise that you offered last year, which was that the TPP is inherently strategic, as valuable as it is economically, the strategic benefit is greater. Many observers, including myself, feared that you were right and that a major diminishment of the US strategic position in the region, and not just talking about ASEAN. I am not going into all the examples because of time, but Australia, Turnbull talking about the liability, what has happened in the Philippines, Malaysia, seeming a lot closer to the region, problems of reliability of alliances based on several things about burden sharing. On top of TPP, is it really unfair to say something we do not want to see – that you were right, and that a result of TPP not going forward with the United States, that the United States is perceived at least in the region as having a diminishing position beyond the inevitability that you talked about, about the rising China?

PM Lee: I stand by what I said – that the TPP was as valuable strategically as economically. Economic dividend was there, the strategic dividend goes beyond the participants in the TPP. It is a way to link both sides of the Pacific and to strengthen the considerable rationale which already exists – for America to be focused and engaged in the region. But it is not to be, you have lost the upside, it cannot be helped, we will move on. It is not to be, it is an impact on American credibility. When you negotiate, well, I do not think you can measure that and you will not be able to see that overnight. But I am sure that when you want to enter a negotiation with any party, it is to end in a treaty, which needs confirmation and which will be politically difficult. The partner will have to make an assessment how serious is this government of the United States and will it see through? And if it does not, is it worthwhile spending hundreds of hours and efforts to try and reach a deal which may be politically spiky at home in our countries and finally it does not go through and then what was it for. So, you can never measure these things. This is like when you draw a red line and then you do not take it seriously. Was there a pain? You did not see it but I am quite sure there was an impact.

Q: You mentioned India once, and I would be very interested in your elaborating on what role you think India can and will play vis-a-vis the strategic relationship between China and the United States. In other words, is there a bigger role that we will be seeing India play?

PM Lee: Well, India’s population is almost the size of China’s population, and it may even possibly overtake China’s population. Its economy is at a lower level – it is about a third the GDP of China, and per capita too; its foreign trade is one fifth of what the Chinese are. So, in terms of economic heft and international influence economically, it is not where the Chinese are. And I am sure your trade figures with China and with India will bear that out. From the point of view of the architecture of the region, we have long believed that India has got a very constructive and important role to play. And that is why when the East Asia Summit grouping was formed, it included all of the ASEAN countries in Southeast Asia, it included the Northeast Asia countries – China, South Korea and Japan – but it also included India, as a major participant, and Australia and New Zealand for good measure. That for a different reason because Australia and New Zealand, they are US allies and a grouping like that, it is not likely to turn hostile to the United States. For the same reason when we talk about trade agreement on the Western side of the Pacific, what we call the Regional Comprehensive Economic Partnership (RCEP). If you are not in the business, you will never have heard of these initials but they mean something. It is basically, it means ASEAN, Northeast Asia and India. Again, because we want India to be an active and constructive participant, bringing to the table something extra and balancing the overall picture. So, in principle, conceptually, when President Trump says he is going to Asia and he is going to make a strategic policy speech and talk about the Indo-Pacific, that is the right shade. Question is, What exactly will the Indian government do, where is their priority focus, to what extent are they able to re-orientate themselves from the subcontinent externally towards the region and open up and use trade as an instrument of policy, just like the Chinese do, just as the Americans have done in a strategic way, and therefore play their full role in the region. That is something to be seen, we are hoping that with Mr Modi, and with I think first they said “Look East”, now they say “Act East” policy, that would mean something and it would mean a greater integration of India into the region. But it is yet to be seen. The format in which the meetings take place, in fact, is the East Asia Summit, which is together with the ASEAN meetings, and unfortunately President Trump is unable to make it to this year’s East Asia Summit meeting, but actually that is the forum which gives body to the idea of an Indo-Pacific community. And we hope that although he cannot make it this year, in future years, he would be able to come. Next year, we are hosting it.

Q: I still remember three years ago right here, I asked you a question about Singapore’s role in helping cross straits dialogue, and you said Singapore would be happy if they want. And this year, it is one and a half year later after the Xi-Ma meeting in Singapore. Right now, the situation has changed. The communication has been suspended. What do you think is Singapore’s role in this regard, to resume the dialogue between the two sides and what is your suggestion for Beijing and Taipei to break the deadlock, particularly right after the 19th Party Congress?

PM Lee: I think we have a limited role. We hosted the Xi-Ma meeting in November 2015 and our job was to provide the room and tea cups. That was it. It is their meeting, and we were a neutral venue.They were both comfortable to come to Singapore and hold the meeting here and we were very happy to be the host and to have some spillover glory. They could not very well hold it in Shanghai, they could not hold it in Taipei and they do not want to hold it in Hong Kong so Singapore is a neutral place and I think that is useful and we are friends with both sides, therefore it could happen. What prevents it from happening now, I think there is a basic difference in perspectives and trust between the two sides because words matter a great deal, abstruse as they may be. The 1992 consensus, whatever that means was the basis from which China did business with KMT in Taiwan and now Tsai Ing Wen or the DPP has decided that she cannot use those words and she wants to find some other form of words which are different, supposedly the same but obviously to her own supporters, closer to a green position. And therefore ever so slightly, friendlier to a separate Taiwan. The Chinese have said no. It does not matter what it is, this is what we agreed on and this what we will stay on. And I can completely understand it, the Chinese position because even if you can accept a new form of words, you cannot go back to the 1992 consensus anymore and by salami tactics, one day you will get very close to somewhere where you do not want to be. So that is a very hard contradiction to settle. The Chinese cannot move. I cannot see Tsai Ing Wen going back and saying that I agree to the 1992 Consensus and she would lose all credibility and support from her base. And therefore you are at an impasse and the best you can hope for is just a standoff and things do not get worse. Things can go wrong and the Chinese are building up their armed forces including aircraft carriers in case things one day go wrong and we hope that day can be put off.

Q: Your grasp for detail is very impressive in contrast with some heads of state in this hemisphere. I have a domestic political question for you. You say that in politics, no party remains in power forever. Does that apply to Singapore?

PM Lee: I am sure it does. I do not know when it will happen but I will not want to make it happen sooner than it needs to.

Q: I would like to ask you on the previous question in which you articulated Singapore’s position on the challenge of climate change. I am wondering if you would be able to share with us whether and how the issue of climate change has factored into your bilateral dialogue with countries such as the United States, its announced withdrawal from the Paris Agreement or with Indonesia which has recurrent forest fires which has wrecked collateral damage on your country.

PM Lee: I have not discussed it with Americans bilaterally, I am not sure but maybe my environment officials would have surely touched based with their counterparts. We were active in discussing the Paris Agreement talks and helping to shape the consensus that came up. And we think that it is a serious global problem and one which cannot be solved without the major emitters which include the US, China, India and as well as the BRICs. Singapore will do our part. I used to say that even if we all stopped breathing in Singapore, it would not save the climate because we are so small but we will do our part, we cannot go beyond that and fall on a sword but our share we will do which means bringing down the emissions from business as usual and peaking by 2030. With our neighbours, with Indonesia the question of haze to us is a question of direct pollution and not climate change. It is just direct particulate pollution of the environment. Instead of fresh air you are getting unhealthy smog and that affects as many countries in the region and is something which ASEAN countries are working together in order to overcome and I think this Indonesian President, President Jokowi is taking very seriously and it has had an impact in Indonesia. We have had a better year this year, partly the winds have been favourable but I think significantly because the President has put officials’ jobs on the line and taken a very personal interest and shown that even in a big country you can get definite things done if the boss pays enough attention to it. There is a climate change angle too, these forest fires in Indonesia and other countries. In bad years, fires cover several thousand kilometres of forest, and not just the forest but the peatland under the forest just dried up and become very combustible, you are talking about C02 emissions in the order of gigatons and equivalent to the CO2 emissions of a country like Germany and you do not get any joy out of that at all. I mean it is not that you needed it to warm your house, to drive your car, to power your office computers, it just went up in smoke and is causing you the problem of global warming. So it is a very serious problem which has to be addressed.

Mr Osnos: It is just the prerogative of the moderator to ask one last question about the leadership of Singapore. You have said before that you may not stay in office after the age of 70. Do you have thoughts about the next Prime Minister?

PM Lee: Well, I just answered that question on CNBC, so you can look it up there.

Mr Osnos: What if we do not subscribe to CNBC?

PM Lee: My aim is not to be Prime Minister beyond 70. I am trying very hard, I have got a team in Cabinet, I have got strong people in the team, and amongst themselves, they have to take a little bit of time to sort out who should be the next leader.

Mr Osnos: Well, we hope that you would come back in any case, and we want to thank you again for your time today. Please join me in thanking the Prime Minister.

PM Lee: Thank you.

Explore related topics

• Foreign affairs