Micklethwait The last time we spoke, you talked very eloquently about Singapore's role in Asia, about the rising power of China and about some of the difficulties of being an ally of America in this particular region. And I wondered from all those perspectives, what should President-elect Joe Biden... do in terms of a policy towards the region and towards China in particular?

PM Lee I think his first priorities will be domestic. He has got many urgent things to deal with, starting with Covid-19. Asia is a very important part of the world for America, and China particularly. I hope that he will be able to focus his mind on developing a framework for an overall constructive relationship with China. That means one where you are going to be competing, where there will be issues to deal with, but where you do not want to collide and will try very hard to develop the areas of common interest and constrain the areas of disagreement.

Within that framework, deal with trade, security, climate change, non-proliferation, North Korea - all the many issues which the two biggest powers in the world have to focus on. Among those will also be issues... of concern to all the rest of us in Asia, who are watching carefully to see how things will develop. Because the last four years have been quite a tumultuous ride.

Micklethwait Do you think that (United States President Donald) Trump has done permanent damage or changed the way that America is viewed in the region?

PM Lee I think that there will be some long-term impact on perspectives on America, and on how America views itself. It did not start with Trump, but over the last four years there has been a clearer shift. When you talk about putting America first and making America great again, it is a more narrow definition of where America's interests lie than has hitherto been the way US administrations have seen things.

Previous administrations have seen America as having a broad interest in the stability of the region and the well-being of its partners, in the tending of its alliances with allies, in fostering an overall environment where many countries can prosper in an orderly scheme, and America is part of that scheme and subjects itself to the same rules.

It will take some time for America to come back to such a position, and for others to be convinced that it is taking such a position. It may never come back all the way, certainly in the short term and certainly in terms of its relationship with China.

Once you impose punitive tariffs, once you put them on, whatever their merits, no successor government can just say those were the wrong things to do and I take them away. You have to deal with it, but you are dealing from a new starting point.

There are many other steps which are even more sharp in that way. On technology, the definition of how you see the other party - whether it is a competitor, whether it is a challenger, whether it is a strategic threat, whether it is a mortal enemy - these are statements which have consequences.

Micklethwait One of the things that people have talked about Biden doing is having a kind of coalition of democracies that would bring in people like yourself, Indonesia, Japan, South Korea. Is that part of the framework that you could imagine working?

PM Lee We all want to work together with the US. We all want to work together with other vibrant economies. We would like to cooperate within the region. I think not very many countries would like to join a coalition against those who have been excluded, chief of whom would be China. Not just Singapore and not just in Asia, I think even in Europe there will be countries who want to do business with China. For example, the EU is trying to conclude an investment agreement with China.

It is quite understandable, and I think it is better. You want everybody in the discussion when trying to work out adjustments to the world order. In that process, you are going to have people form alliances, they will cooperate with one another, they will try and find common cause. But to try and make a line-up, Cold War style, I do not think that is on the cards.

Micklethwait Do you regard the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) as dead? Is that gone or do you think that it is possible to revive?

PM Lee The CPTPP is very much alive. There were 12 at the party... one fell out, and now there are 11. The 11 carried on with the party. It was to the great credit of Mr (Shinzo) Abe, who was then Prime Minister of Japan, that he held it together and brought everybody back on and we concluded the CPTPP.

America is not part of it. We hope that one day America will come back to it. I do not think realistically that is going to happen any time soon. The stars are not aligned.

The Democrats, I do not think their base is very keen on this. The Obama administration, which Biden was part of, was keen on this. Hillary Clinton, who was Secretary of State, fully supported it. But when she became Hillary Clinton the candidate, she had to repudiate it. It is the reality of American politics. I still think that it makes sense for the US, but it has to make domestic political sense as well. That will take time and a different alignment of the economic situation as well as the political configuration in the US.

Micklethwait On that particular point, do you think that there is a possibility that Biden generally could end up being somewhat tougher in terms of everyday things than Trump was? To the extent that Biden is more likely to complain with China about human rights. And you have also got this side of the Democratic Party for whom things like labour rights, environmental rights matter enormously? In some ways, despite being predictable, he could be tougher?

PM Lee It is possible. He knows (Chinese President) Xi Jinping very well because they spent many hours together with Xi, who visited the US, and he (Biden) visited China too. They have engaged one another. That personal engagement at the top is important.

Equally important is how each country sees the other and the intentions of the other, and whether they see the possibility of being able to work together to mitigate the inevitable contradictions which are going to arise between them.

It is not always easy but it is possible. It has historically happened with many administrations, who will make very fierce statements on the campaign trail. Once you become the administration, you have to deal with realities, and you have to pivot. Bill Clinton did that. He is the one who (as a candidate) talked about coddling dictators from Baghdad to Beijing, but (as President) he did business with China.

I hope that something like that can happen with the next administration, but I think it is harder because the consensus to see China as a strategic threat is almost becoming received wisdom and unquestionable in the US, in Washington. It will be very difficult for any administration, whether it is Biden or, on the other side, Trump, to disregard that and then just proceed as if the last few years had not taken place.

Micklethwait What about on the other side? Do you think the Chinese are prepared to do bargains about this? It takes two to tango.

PM Lee Yes, it does. This is a bilateral relationship. I do not think the Chinese want a collision. I think they know they are not ready for a collision. But I am not sure that they are prepared to give a lot of ground, and their principal consideration will be a domestic one, rather than the international balance.

Intellectually, and in an abstract sense, they will agree when you tell them that they used to be 4 per cent of the world's trade and are now 13 per cent or so. The rules which are settled when you were 4 per cent have to be updated now that you are 13 per cent. You have to make certain changes. Changes to the overall balance of contributions to the overall system, and also changes to deal with particular grievances and issues which have arisen on specific problems, whether it is trade or whether it is security issues.

In the abstract, I think they will agree to, if not to a shift, at least a change in the trajectory. In practice, when push comes to shove and you have to negotiate a new dispensation, I think there are hard bargains. It is not clear that between the two sides, they will be able to move to a new position.

I can understand the difficulty, because we are where we are, as a result of 30 to 40 years of liberalisation and reform and opening up. In the process, China has gotten more affluent, more powerful.

The partners of China have also benefited from China's emergence as an economy, its connection to the world, its production of manufactured goods, its consumption of everything from aeroplanes to movies and financial services.

The Chinese narrative would be: It has been win-win, we should all rejoice, why does anything need to be improved? Actually, things have gotten better, yet many countries do feel that things do need to be adjusted. That adjustment will be very difficult to make.

Micklethwait From your perspective as a democracy, how important is what is happening in Hong Kong, where you are seeing the pro-democratic people resign. Most people would read it as being a clampdown on freedoms in Hong Kong.

PM Lee We watch carefully and with some concern what is happening in Hong Kong and responses in Hong Kong. That something was going to happen, was very much on the cards and could not have been avoided, because the demonstrations and expressions of defiance could not have carried on indefinitely. Certainly not to the end of "one country, two systems" in 2047.

The question was how it could be headed off. The Chinese government have settled on this formulation where they have made the legislation in China, in the National People's Congress, and the administration in Hong Kong has followed through and carried out those new rules.

We hope that it could be done in a way which would deal with a problem but not shake confidence, and maintain the Hong Kong system intact, so that it can be valuable to China and can be part of the prosperity in the region. There is a lot of concern in Hong Kong, and you can see the way actions have reactions and further anxieties arise. I hope it can settle down to a new norm. It will not go back to where it was, but something which is sustainable, which will enable the Hong Kong people to live stably and have the economy working and have a greater degree of the freedoms and access to information and expression than pertains on the other side of "one country, two systems".

Micklethwait Jumping back to trade. We began with TPP, but there is also the RCEP (Regional Comprehensive Economic Partnership)... Do you regard that remotely as a comparative thing to TPP?

PM Lee It is a different animal, for a different purpose. The TPP had a relatively small number of economies... It went for very deep agreement requiring substantial commitments from these participants, and covered areas which are very difficult to cover, like intellectual property. There was even content on exchange rates and things like that.

The RCEP is a different configuration. It is Asian, it includes all of the major Asian economies except India, which unfortunately has decided not to be part of the grouping. It covers one-third of the global population and one-third of the world's GDP (gross domestic product).

But it does not go as deep. Nevertheless, it is a significant step towards reducing trade barriers and facilitating trade between these economies. It is also a significant statement that in Asia, whatever happens in the broader world, we would like to promote regional integration and that we do believe in a model of cooperation and win-win trade rather than go it alone and beggar thy neighbour. In these troubled times, it is worth quite a lot.

Micklethwait One thing which worries me about RCEP is if you look at, for instance, China's treatment of Australian exporters at the moment. It is punishing Australian exports for political reasons. Most people will look at that and say that is an infringement of what a trade bloc is about. But under this format, there are no tools for dealing with this. Do you think that is something that may come in the future?

PM Lee The way to deal with those kinds of issues is the WTO (World Trade Organisation)... the WTO does have rules - what restrictions you can impose, how you have to justify them, how to adjudicate them and appeal the adjudication.

I hope with a Biden administration, the WTO will no longer be deliberately pushed to one side, as has been the explicit policy of the Trump administration.

Micklethwait Singapore has been one of the great successes of global trade. When you look at the world at the moment, there is a possibility of division into two Internets, there is a possibility in the division into regional blocs with maybe things like RCEP becoming a sort of more regional variety... Do you worry about a global world becoming a much more regional one?

PM Lee Regional blocs are a possibility, but I do not think it will split up all together. Because the trans-Pacific trade links and trans-Atlantic trade links are too substantial to be cut off, and to divide us into two worlds or three worlds.

The risk of bifurcation of technology is there. In fact, it is not just a risk, it has already happened because in China, you cannot get Google or Facebook or Twitter. They have their own equivalents.

There are legitimate reasons why you may be concerned about the provenance and ownership and control of the technology for vital parts of your information infrastructure, like the 5G system.

Micklethwait You have finessed Huawei quite elegantly as I remembered it by giving them some access to Singapore.

PM Lee No, we did what we thought made sense for us. We have stringent security requirements and we stated them upfront. We invited the operators to bid. We did not rule anybody out. The operators made their own calculations, and they decided whom they would partner with. It is up to them.

Our attitude is whoever's system I buy, and it is not going to be my system, because I do not have a Singapore 5G system, there could be vulnerabilities, there could be deliberate vulnerabilities, and there certainly will be intruders trying to come in even if there are no deliberate vulnerabilities. Some intruders are bound to come in. Therefore, absolute security is not to be had. We have to be practical about it. We will do what we can, and we will use the systems for the risks and purposes which suit them.

If I really have something which I absolutely cannot risk compromising or losing information about, then I have to find some other solution. If I say I want absolute security, that is not to be had in this world.

Micklethwait Do you think (Covid-19) gives Biden an opportunity to reach out to areas like Asia... of bringing your region back to America?

PM Lee I hope so. The chance is there, but he has many priorities and Asia is but one of them. In Europe, he has many priorities too - trade as well as Nato. With Russia, he has issues to settle, and in the Middle East. I think he has a full plate. I hope that it will be a new direction for America, but do not forget that Mr Trump collected more votes than Barack Obama. He has not disappeared, nor the pressures which he represented, they have not disappeared from America's body politic either.

Micklethwait Conversely, to the Chinese, does this also offer an opportunity? If you look at these big challenges like Covid-19, climate change, these are things that happen to all humanity. They offer a potential bridge to open up a better relationship with America.

PM Lee I hope so. When Mr Trump was elected, some Chinese commentators, perhaps overly confident of their ascendance, thought that they saw a strategic opportunity - that America would now not have a coherent position in the world, and therefore they had the field open to them, and that they could expand their influence in the world.

I think that they have since discovered that it is not really that much to their advantage to have America at sixes and sevens, and unable to have a coherent foreign policy vis-a-vis China and the rest of the world. It is better to have somebody there who may not fully agree with you, but understands his interest in a broad way and whom you can deal with.

With Biden, maybe they will decide that they want a new try. I hope so. It is not easy to do this. You remember when Mr Obama first came in and Hillary Clinton was his Secretary of State. She met (Russian Foreign Minister) Sergey Lavrov and said perezagruzka (reset). It did not succeed in resetting relations, because both sides' principal considerations are domestic ones. The driving forces, the compulsions, their priorities, are domestic ones. If you want the outside world to be at peace, that is unlikely to drive your domestic policy or cause you to adjust your domestic attitudes to lead to a stable international order. That is why you end up with miscalculations and all kinds of unexpected developments in the world.