PM Lee Hsien Loong at the Business China 10th Anniversary - Business China Awards and Closing Gala Dinner 2017

PM Lee Hsien Loong | 14 July 2017

Transcript of Prime Minister Lee Hsien Loong’s dialogue at the Business China 10th Anniversary - Business China Awards and Closing Gala Dinner 2017 at Shangri-La Hotel on 14 July 2017.


The dialogue was moderated by Mr Robin Hu, Head (Sustainability & Stewardship Group) Temasek International. The full dialogue can be viewed on the PMO YouTube channel here:

Mr Robin Hu: I am sure when I say this on behalf of everybody here and that is whatever happened in the last one month, this audience, the people of Singapore appreciate your leadership and dedication to the nation and we take this opportunity to wish you many good years to come and the best of health.

PM Lee Hsien Loong: Thank you very much.

Mr Hu: On the opening of G-20 in Hamburg, I understand that you have not fully recovered from the jetlag.

PM Lee: Yes, I think so.

Mr Hu: And that you called for the countries to support multilateral trade models. You mentioned the EU, the Pacific Alliance and indeed, the ASEAN Economic Community as good examples. Now it is close to your heart as it is so critical to the ongoing prosperity of Singapore. Can you share with us your takeaways from the G-20 at Hamburg and are you more or less confident about global prospects?

PM Lee: I do not think the G-20 changed the world or changed the countries’ positions. The countries stated their positions. We worked out a form of words for the communiqué on trade. We maintained overall formal terms about multilateralism and cooperation but added in some caveats that countries can retaliate and take defensive measures. So it is on the one hand, and on the other. On climate change, in fact there was an explicit agreement to disagree. The US had their position recorded in the statement. The other 19 countries had their position recorded in a statement. We are where we were before. We have not got close and I think it is difficult for countries to get closer unless one side or the other makes a basic change in their approach and their philosophy.

On trade, frankly, we all used to say the right things but to some degree or other, we were all sinners because there would be some measures of restricting trade, some protectionism, some bending of the rules in order to protect politically important segments of the economy. Many countries do that but all the countries subscribe to the basic statement that ideally, let us go for multilateral rules-based open trade. I think that is important because even if you do not always live up to the ideal, knowing that that is the ideal you should strive for is the start of making progress. We have held that position in Hamburg, with most of the countries. We hope that over time, even the US will change their approach or will modify their approach and be prepared to see that trade, first of all, is not win-lose, it is win-win. And secondly, that you do not have only to do business one-on-one; I can do business with a table, with a group, with a regional union, with ASEAN, and with EU. Then perhaps we will come back to some convergence but it will take some time.

Mr Hu: PM, you mentioned trade several times and we all know that President Trump may have scored a bit of a concession on the final communiqué. I recall that he said in the final communique that was released, and I quote, "legitimate trade defence instruments may be utilised". We also know you had the opportunity to meet Prime Minister Abe. Have you any updates on TPP-11 or possibly RCEP?

PM Lee: I do not have an update. They remain very much on the table. The countries are discussing both RCEP as well as the TPP-11. I hope both will make progress.

Mr Hu: And that will be in the interest of Singapore of course?

PM Lee: Of course, and I think of the region too, and the world.

Mr Hu: As you know, the Belt and Road Initiative (BRI) has captured the imagination of the Chinese people, has galvanised the ambitions of Chinese enterprises and enthused to a large extent the neighbouring countries along the Belt and Road but some observers believe the BRI is simply China’s attempt at creating a Chinese economy outside of China and perhaps nations might become beholden. It is understandable that some countries may be somewhat unsettled by this but it is also an opportunity for us to take advantage of the dynamo of our times. So there are many businessmen here in our audience here tonight. What would you say that Singapore businesses could take advantage of and may I also add in the same light, how can China do to maybe soothe the unease of nations?

PM Lee: We think it is a good thing because China’s influence is growing. China’s links with other regions in the region, and actually in the whole world, are increasing and the Belt and Road is the way in which China can grow its links in the world, and also grow its influence in the world but in a constructive sort of way. The influence is growing. It will have to be accommodated in the global system. The question is how and whether this will be a stable, smooth adjustment or a troubled and destabilising one and I think the BRI is a way to do it in a smooth way – win-win, linking up with the countries around the region with infrastructure projects, with connectivity, with financial linkages, with people linkages and in a way which enables the region to benefit from China’s prosperity but at the same time maintain the region’s links with the rest of the world, and indeed with Europe, America, or for that matter, Africa and Australia.

First of all, it is a good thing. Secondly, how does Singapore benefit? If you listened to Deputy Prime Minister Teo Chee Hean’s speech yesterday, he gave a comprehensive explanation, whether it is through infrastructure projects in the region which we can help to do or through financing of projects in the region which Singapore is a natural place or people-to-people linkages where we can have officials visit one another, tourists visit one another, businessmen going back and forth. There are many opportunities for Singapore which are natural.

Many Chinese companies are in Singapore. I think the number is in the thousands. The Chinese banks are in Singapore. The businesses use Singapore, not just because of Singapore but as a base to jump off into the whole region and the more China does business through the Belt and Road with countries in the region, the more opportunities there will be to use Singapore for this, and set up here and use our business environment, use our reputation, use our connections with the region, use our financial services and I think these are all opportunities for Singapore businesspeople.

The China Construction Bank has already set up an infrastructure financing unit in Singapore and all these things can only be to the benefit of Singapore. As for the concerns of other countries, I would say that the more it is seen that the BRI is an open initiative, China would enhance its links to the other countries but at the same time, countries can do business with anybody in the world. It is not a bloc. It is not a closed group. It is an open, welcoming, free, intensification of mutually beneficial linkages.

Mr Hu: DPM Teo mentioned yesterday about the free flow of trade and goods along the Malacca Straits and a number of people were talking about it and perhaps now everybody fully comprehends what he meant when he said that. Would you like to say a bit more on that?

PM Lee: Singapore depends on trade. It is our lifeblood. If the lines are cut, we die. Because our world trade, international trade is 3.5 times our GDP. It is the highest ratio in the world, higher than Hong Kong, higher than any country in the world. We have a vested interest in keeping trade links, trade routes open and having freedom of navigation on the seas and in having an international rule of law which applies to freedom of navigation and make sure the seas remain open.

And when you talk about the seas, some of the most critical bits are the straits, the narrow parts – the Straits of Singapore, the Straits of Malacca, where it is so narrow there are no international waters along the straits. There are no high seas. If you look at the Straits of Malacca, the Indonesians are on one side, the Malaysians are on the other and the centre line is the boundary, in most of the straits. Certainly, that is so in the Straits of Singapore. So technically, there are no high seas and ships cannot automatically sail through a strait like that unless they have a special arrangement, which there is, because under UNCLOS, straits have a special regime and ships are entitled to sail through, commerce is entitled to go through and the littoral states cannot block that, they cannot even readily regulate that, except under very stringent conditions. Singapore, sitting in the middle of the south of Straits of Singapore and at the southern end of the Straits of Malacca has a vested interest in making sure the UNCLOS regime is upheld, that littoral states do not say no – “I think this is not very safe and please follow the following rules, only certain hours or certain times or certain routes” and unilaterally restrict freedom of movement within those straits and we have taken that position consistently.

DPM Teo talked about the Torres Straits. You may not know where it is but it is in the north-eastern part of Australia, between the mainland and the Great Barrier Reef. So it is a narrow area. It is a dangerous area. There have been lots of shipwrecks and there are also important natural resources – the Great Barrier Reef, the corals. So if you have an oil tanker run the ground; that is big trouble. So the Australians decided about 15 years ago to introduce compulsory pilotage, which means the ships which go through must take a pilot on board, which means basically now the Australians have a control over which ships can go, when it goes and if the pilot is not available, you cannot turn up, you cannot sail. It is no longer quite so free as before. They did it unilaterally. There was no international agreement and we objected as a matter of principle. We take the same attitude when it comes to the Straits of Malacca and the Straits of Singapore that if any country tries to restrict movement through it unilaterally or selectively to say certain countries cannot use the straits, I think we would be completely opposed to that and that is quite fundamental.

Mr Hu: Are we at danger of seeing any of that happening?

PM Lee: I do not think we are at risk of it happening but I think some countries do worry that it could happen to them.

Singapore depends on trade. It is our lifeblood. If the lines are cut, we die.

PM Lee Hsien Loong

Mr Hu: We are going to move on to the next topic and as we all know, if I may use an expression, the Sino-Singapore relations are now back on track.

PM Lee: It has always been on track.

Mr Hu: But of course.

PM Lee: But now moving faster.

Mr Hu: Absolutely. DPM Teo hosted Minister Zhao Leji in Singapore. Minister Balakrishnan met with his counterpart in Beijing and DPM Tharman met with Premier Li Keqiang at the side line of Dalian, where he heartily and readily accepted your invitation to visit Singapore.

PM Lee: Yes, I look forward to seeing him.

Mr Hu: And of course to cap it off, you met President Xi Jinping in Hamburg. Could you share a little bit about your conversation with him and what was uppermost on his mind and what was your observation of him?

PM Lee: We had a good discussion. We talked about bilateral issues and bilateral cooperation, all the things we are doing together – the Chongqing project, the previous Government-to-Government (G-to-G) projects that we had in Tianjin and Suzhou. We talked about our free trade agreement and the upgrade, which is now being discussed between Singapore and China. We talked about opportunities for future cooperation, including cooperation on human resources, such as what we did with Zhao Leji when he came. We also talked about the region, about how ASEAN can cooperate with China and Singapore’s role as chairman of ASEAN next year and also as coordinator for ASEAN-China relations. We talked about how things are in the South China Sea and I congratulated the President on the 20th anniversary of “回归” in Hong Kong. He explained to me how he saw Hong Kong and why he was satisfied with the progress which had been made. We had a good discussion.

Mr Hu: You also met President Trump for the first time.

PM Lee: It was a good meeting. He invited me to visit the White House and to sign some agreements because SIA is buying some aeroplanes from Boeing. I said yes happily, I would go. We talked about how we could do more together and there are many things which we are already doing together, on anti-terrorism, on security, for that matter, even trade links because we have a big trade deficit with America; America has a big trade surplus with us.

Mr Hu: Does this mean we get good trade deals with the Americans?

PM Lee: We hope to sell more to them and we hope to buy more from them too. We would like to do more with them and we encourage them to be fully engaged in the region and not only with Singapore.

Mr Hu: Given that you just met two of the world’s superpower leaders and given that the Sino-US relation is probably the most important relation of all relations, do you have a good feel about the world that we are going to enter into?

PM Lee: I think my meeting two people does not change the world but we are in a period of uncertainty because it is a period of change and in the case of America, the new administration is really still defining its way forward. It has not appointed its full team. For example, on Asia-Pacific, the Assistant Secretary of State for Asia-Pacific has not been named. Many of the officials have not been named. So we have to see how the administration feels its way forward. It happens with every administration and with this one because a change in direction and philosophy is greater, it may take longer and may be a bit more unsettling in the process but we will see.

We must be able to move ahead with the world and as others make progress, we continue to make progress with them and in some aspects, ahead of them and we remain useful to them.

PM Lee Hsien Loong

Mr Hu: If I may move on to the question of “小国外交”. Small nations are constantly in a state of calibration and recalibration of our policies. And on 29 Dec 2009, at the second anniversary of Business China, some eight years ago, Minister Mentor Lee had this to say, and I quote from Lianhe Zaobao: “就算日益强大的中国在五六十年后晋升世界强国之列,新加坡还是能够找到本身可以扮演的角色,继续保持对这个强国有用的地位。这份关系将会随着时间出现变化,但是两国之间也有种不言而喻的相互了解”. Those words were spoken eight years ago. Do those words still represent the essence of our foreign policy now as it was then?

PM Lee: Yes, and it applies not just to China but many other countries. We work on the basis that the world will progress, countries will prosper and our roles will have to change as they grow more prosperous, more capable, and more open to the world. What we used to do and what they used to find us useful for will change. You cannot sell the old medicines to a patient who is in a new situation or who no longer needs medicines. Therefore, we must be able to move ahead with the world and as others make progress, we continue to make progress with them and in some aspects, ahead of them and we remain useful to them. So you look at our projects in China. There are three G-to-G projects but they are not the same. The first one in the early 1990s we started was based on township development and attracting investments in, which means URA, EDB-model. The second project in Tianjin was not so focused on investments because the Chinese know how to do that. It was more focused on being environmentally-friendly, to build a green city. How do you plan a city so that it is eco-friendly? The third project which is in Chongqing is not a physical, hardware project but really a system, a software project. How do you improve the connectivity, the logistics, using IT and data in order to improve the connectivity of the great western part of China, where the distances are huge and the cost of connection and physical transportation are high? So the focus changes because China’s needs have changed and Singapore’s expertise, we like to think, has kept up with the times. If you extrapolate forward another 10, 20 years, I have no doubt we will need to know how to do new things otherwise we will be out of business.

Mr Hu: Maybe I should ask a question on behalf of the business community here tonight. Singaporean businessmen are patriots and ambassadors in our region but they also happen to be the first ones to come under some pressure or tension whenever there is some pressure on the diplomatic front. A few of them perhaps feel that Singapore could have been a bit more circumspect in commenting about China in particular. What is your advice to the business community over here? How do they uphold the interest of Singapore and at the same time, look after their own pockets?

PM Lee: The first thing to realise is “有国才有家”. If the country is not successful, then your passport is not worth very much, and for a country to be successful, you have to maintain good relations with other countries in the world but also on the basis of mutual respect, cooperation and win-win. Sometimes it works; sometimes there are issues where it does not work so well and we must be able to manage the issues which do not work so well in order not to affect the wider relationship. The businessmen have to take a different approach because you are not in the business of deciding the direction of the country. You are just looking for opportunities for your company and the more favourable the overall conditions are, the more opportunities you have but if the Government takes a perspective like a businessman does, I think that will be as unsuccessful as if the businessman takes the same perspective as a government needs to do. We have to understand that and it is our job to make sure that we have stable relations with as many countries as possible and within that framework, the businessmen have to understand what the Government is trying to do, why they are doing it this way so that if after dinner, over the maotai, somebody asks you, you have a good answer but for your own business, you have to do what you need to do and that is the way it has to work.

Q: PM, Singapore will actually take on the role of the ASEAN chair in 2018. In view of the change of the region from a geopolitical perspective as well as an economic perspective, how do you think Singapore can play a role in encouraging constructive ASEAN and China relations?

PM Lee: The ASEAN chair is a rotating chair. We are the chair for the year. It does not mean we dictate to ASEAN what is to be done. ASEAN works on consensus. As the chair, we try to bring the consensus together and to nudge things in the positive direction and that is what we will do next year as ASEAN chair. We are already the country coordinator for ASEAN-China relations and in that role we have been trying to make modest progress on the South China Sea. We concluded the framework for the Code of Conduct for the South China Sea in June and that is a useful step forward. As ASEAN chair, I think there will be opportunities for us to pursue cooperation with China on a wide range of areas. I know that every time the Chinese Premier attends ASEAN meetings, he comes very well prepared with ideas and proposals and ASEAN, I hope we as chair, will try to get ASEAN as well-prepared for those meetings.

Q: My question is in relation to technology. Technology provides a lot of opportunities and also disruption to our traditional businesses. Throughout the course of the conference today, I learnt that the rate of adoption of technology in the Chinese market is tremendously fast. Singapore is beginning to invest in a lot in our Smart Nation initiatives and all. Some of our panellists were sharing that coming to Singapore, they actually have to dig out their cash and credit cards for the first time after a few years. How do you see Singapore companies, in what areas do you think we can collaborate with them in the development of technology and solutions for the benefit of Singapore and the world?

PM Lee: I think you must work on the basis that China in many areas will be world-class. They already are in some areas and I think it is their ambition to and I am sure they will succeed in becoming world-class in more areas but at the same time, we must work on the basis that in some areas, we are good and then we can be useful to others. I do not accept the principle that “anything that I can do, they can do better”. The world is not like that. When you see a country rapidly growing, which happened with Japan in the early ‘80s or ’90s. People used to say Japanese would conquer the whole world. They are good at construction; they are good at manufacturing; they are good at banking; they are good at people services; their department stores are first-class; everything is outstanding, the Japanese will conquer the world. You are strong at some things. You are relatively less strong in other things and there are other centres of prosperity, ingenuity and innovation – an energy in the world that always will be. It will be like that with China also. You look at our relations with the United States, which is the most advanced economy in the world today. They are better than us in many areas. We do not compete with them in making aeroplanes but there is a lot of business we do with America. Our companies are in America. We invest in America, on quite a big scale. ST Engineering for example, we have got aerospace aircraft maintenance facilities; we have got our oil drilling rigs. So would we have more business with America if they were a developing economy? I do not think so. So if China is a developed economy, will I have more business with them? I think it is our business to make sure it is so.

Q: 新加坡在过去的国际关系里面保持很多国家的友好关系做得非常成功,也是因为这个非常稳定的国际关系给新加坡带来了欢愉的今天。当然,我们看到您家把习主席和马英九带到新加坡第一次见面的时候,我们都非常欣赏这个新加坡作为一个中间人起了非常高的作用。那么在未来中国和美国的关系的发展里面,我想您能不能多扮演一个中间人的关系,不单是当一个中间人,在这个过程实际上带了一个区域也好,全球也好,领袖的地位?


PM Lee Hsien Loong

PM Lee: 简单地回答,中国和美国不需要中间人。不过,我们希望和中国是好朋友,和美国也是好朋友。我看这个角色我们可以扮演。双方有很多直接沟通的渠道,不需要第三国家介入。当然,中国和美国的关系越好,新加坡和双边同时维持好关系的机会越多。我们希望会有这个圆满的结果。但是这个要靠两个大国之间的合作,互相谅解,互相容忍,适应对方的需要,这样才能做得到。美国的Graham Allison 引用了这个 Thucydides Trap,说一个大国崛起肯定会使国际局势受到震撼,结果有战争的威胁。那中国和美国之间会不会发生这样的局势呢?我看这个言之过早。当然两边都知道这是危险的。两边都会尽量设法避免它。我希望他们会取得成功。

Q: 新加坡同美国有着安全伙伴关系。李总理,你认为中国政府对新加坡将来总关系的合法性,正当性,正确性有没有充分理解?反过来,在美国有一些认为,新加坡和中国有一种特殊关系。也许有些人在美国看来是说 “Too warm a relationship”。李总理认为美国政府对新加坡这种对外政策态势有没有充分的理解?

PM Lee: Let me explain this in English. I think it is important that we know what our basic positioning is and then we can try to have other countries understand. There has to be a consistent position, whichever country you are speaking to. I cannot be on one side speaking in English and another side speaking in Chinese. It has to be one position. Our relationship with America is friendly cooperation. We are not an ally but we are a security cooperation partner. We believe that America has a significant role in ensuring the security and stability of Asia-Pacific. We believed so and said so for many years and we acted on that belief, including inviting American ships and aircraft to stop by in Singapore and use our facilities as they operate in the region.

I think that it is correct that the Americans continue to play an important role. They may not be as overwhelmingly dominant as before economically but they remain a superpower and they continue to have significant contributions to make in the region. That is the position we made for many years. We have explained it publicly. We explained it when we meet Chinese officials. They appreciate our point of view. I understand they have a different point of view but they appreciate where we stand and why we have to take that position as Singapore.On the other side, we see China as being a positive for the region as it grows and prospers because we think China which is unstable and poor can cause a lot of trouble for Southeast Asia and for the world, and it is far better that China be strong and confident and be cooperating with the world, whether with the AIIB or the BRI or the many other schemes which the Chinese have been working on and active diplomacy. Then it is for China either to be turned inwards on itself or to be at odds with the world. We said so and we believe that it is good that China grows, prospers and plays its rightful role in the world in a constructive way. I do not know that all Americans share that view. Some Americans believe that the Chinese growing strong may become a challenge to them and it is better if the Chinese do not grow strong so fast and let us take some time to worry about this. And the Chinese of course, there is a strand, often you see them in think tanks and I do not know what your perspective is but they often ask some professors who will say the Americans are trying to slow us down, hinder our growth, to restrict our role in the world, to prevent us from standing up again 170-something years after the Opium War. So there will be these different perspectives and I do not expect that we have convinced everybody in America or everybody in China but I think that we are taking the right position and at least the foreign policy establishments will appreciate where we stand even though they wish us to be tilted more one way or another.