SINGAPORE - Prime Minister Lee Hsien Loong was interviewed by prolific Chinese media television host Yang Lan last week, ahead of the Asia-Pacific Economic Cooperation (Apec) summit in Beijing over the weekend.

In the interview, which was televised on Monday, PM Lee spoke on a variety of international and domestic issues. These ranged from Singapore's involvement in regional trade agreements and bilateral projects with China, to the relationship between the law and elites and whether high salaries are the only factor in ensuring clean government.

Yang Lan:Singapore is involved in several trade agreements and cooperation mechanisms. How does this reflect Singapore's view of itself, and what is the significance of globalisation to Singapore?

PM Lee: We have no choice as we are a very small country with an open economy. If we do not look towards the world, we will have no way to go.

Countries like China, the US or Japan have a huge domestic economy and sufficient domestic demand. We do not have that, and if we rely on domestic demand to sustain the manufacturing industry, few companies will come to Singapore. Likewise, if we rely on our own farming for our food supply, we will starve.

So we have to look towards the world. Given the opportunity, we will want to take part in these free trade talks and work with other countries, to deepen our interactions and work towards mutual benefits.

Yang Lan: Chinese President Xi Jinping has proposed developing a 21st century Maritime Silk Road. This would bring about improvements to infrastructure, including information and communication networks, for economies along the route. Does Singapore see any opportunities for itself or any role it can play in this?

PM Lee: Of course. We are a logistics centre, a very big port, an entrepot, a communications centre and an aviation centre. Our Changi Airport alone handles more than 50 million passengers per year.

Through the Maritime Silk Road, we can deepen cooperation with neighbouring countries and step up trade and investments with countries near China. We hope that it will provide us with more opportunities, and that Singapore's port, airport and network can supply some of the services needed.

Yang Lan: What are some of the bilateral projects you are interested in and what projects will you discuss with (China's) President Xi (Jinping)?

PM Lee: Some of our current projects are quite advanced, like the Suzhou Industrial Park, which is celebrating its 20th anniversary this year. The Tianjin Eco-city is still at the development phase, but it has begun to take shape.

We are currently discussing with China a new third foundation-level project between both countries. It will be in tandem with China's macro policy of developing its western regions, and will involve selecting a city in western China for the bilateral project.

This will also be in tandem with the concept of China's New Silk Road Economic Belt and a related project on modern logistics. We are still in discussions with China and it has not been confirmed yet.

Yang Lan: In China, especially at the government level, Singapore's clean government model is often brought up for discussion. But quite often, people associate it with paying high salaries to ensure a clean government. Do you think it is that simple?

PM Lee: I think the topic of high salaries can evoke strong, negative reactions. In principle, it is not about a high salary, but rather a realistic and commensurate salary.

We believe in meritocracy, having the right people for the right jobs. The most important jobs have to be done by the most capable and reliable people. And if you want capable and reliable people for these jobs, then you have to treat them equally and fairly.

People often say they should be motivated by a sacrificial spirit, a spirit of service. Since they are doing it for the country and for the people, they must be willing to put aside their personal benefit and forge ahead selflessly. This definitely holds true.

But at the same time, these are peaceful times, not a revolutionary period, and everyone needs to support their families and plan for their future. Those people who are capable may choose not to make the sacrifice and hope someone else will do it. So in this context, we need a pragmatic system, a realistic wage.

At the same time, we have strict requirements that work performance must be good. In terms of the law, you absolutely cannot cross the line. If you do something you are not supposed to, you will be punished severly under the law. So it is not just a matter of salaries, but also a matter of the system, of transparency, and of our culture of governance.

Yang Lan: China is also moving towards governing by rule of law. When people talk about Singapore's style of governance, they often say it is rule by the elite, which is a tendency of authoritarianism. What kind of relationship exists between the law and the elite, and how do you strike a balance?

PM Lee: The elites have to abide by the law too. We appoint people based on merit, selecting those who are the most capable for the most important tasks.

The law and honest governance are related too. If you don't have honest governance, even if you have the law, people may not necessarily believe that your courts and judges are impartial.

Yang Lan: I last interviewed you 10 years ago. In the past 10 years, what was the biggest challenge you faced as a leader?

PM Lee: The world is changing very quickly and we have to move along with it. If possible, even move a step faster than other countries. But moving quickly has not been easy for our people because they have had to adapt, change, understand, and sometimes shoulder some instability and risks.

This is not so easy to do in the current environment. We have resources, a more developed economy and better educated people, and these are our advantages. But the impact of globalisation on us, especially on the middle- and lower-income groups and on the less educated among us, is a long-term challenge we face.

Yang Lan: You decided to give out grants to employers (to retain employees) at the height of the global financial crisis. It led to the first budget deficit in Singapore history.

PM Lee: We have had budget deficits before, but that was somewhat bigger than previous deficits.

Yang Lan: Were you anxious at that time? Because people at that time could not see how quickly the economy would bounce back in the future?

PM Lee: We knew we had reserves, so we could tackle the crisis. But if we had to keep relying on our past reserves, I think after a while we would have exhausted them. Hence, we worried about how long the crisis would last, what other policies we would need to implement to manage the crisis. Or if our policies were sufficient and we could bide our time and wait out the storm patiently. Fortunately, the storm passed rather quickly, but also perhaps because of that, many people did not have the sense that we actually survived a crisis.

Yang Lan: In China, because housing prices in the big cities are so high, many young people cannot to buy homes even after working for many years. In Singapore, I understand property prices are also very high, and many foreigners come in to invest in property?

PM Lee: Prices have come down a bit.

Yang Lan: Oh, have they? I know many foreigners have been buying property in Singapore, causing land and housing prices to go up. How do you help the young people in Singapore afford property?

PM Lee: We have the Housing Development Board (HDB), government-developed housing, which is unique. The government sells these flats to them at comparably cheaper prices. Around 85 per cent of families in Singapore buy, and not rent, the property they live in, which means they own their homes.

Yang Lan: I heard young people in Singapore can afford a flat after working for four years. Is it true?

PM Lee: They can start buying flats by taking out loans, and they can also use their Central Provident Fund savings to repay the loans gradually.

Our slogan is: if you earn $1,000 a month, you will be able to afford a two-room flat; if your monthly household income is $2,000, you can afford a three-room flat; if you earn $4,000 a month, you can afford a four-room flat. A couple earning a total income of $4,000 a month is quite common. This is our policy, and it is doable.

Foreigners cannot buy HDB flats, and they are only made available to Singapore citizens. Therefore, our citizens do not need to worry, because we guarantee that if you have a job, you should be able to afford a flat.

Yang Lan: There has been greater political participation in Singapore in recent years, with society becoming more advanced. Since you've been Prime Minister, I've noticed you've also given outlets for people to voice their opinions?

PM Lee: That is a must. In Singapore, everyone wants to have a say, and there are plenty of opportunities to do so, be it in newspapers, the media, social media and online platforms. Everyone is on Facebook in Singapore, many people have blogs, and we encourage people to speak up, but we also remind them to be responsible for what they say and to exercise caution.

It is also not all about blaming people and talking bad about people, because politics is not just talk, but also action.

Yang Lan:You have set up a Facebook account too. What do you post about and do you interact with the people who comment on your posts?

PM Lee: I wanted to interact with the younger generation, so I decided to try out Facebook. The reactions have been quite good. But serious matters are difficult to express through Facebook postings since they are at most two to three paragraphs long. No one will read posts that are too long.

Also, you need photos to make your posts more attractive. People are typically more candid in their responses to photos.