SHANGHAI - As China becomes stronger, with bigger global ambitions and aspirations, the world is watching it closely to see what sort of country a modern China would be, said Prime Minister Lee Hsien Loong.

But how it will eventually turn out for the world to see hinges on the way its reacts and deals with crisis and opportunities, cooperates and deals with conflicts with other countries, he added.

Meanwhile, China's unique circumstances require it to come up with its own model for giving its people a stable and peaceful life over the years, he noted.

It has to feel its way forward "because there is no precedent in the world for 1.3 billion people to live stably and peacefully, in a way which can be sustained, from one generation of leaders and population to the next generation", he said.

The Prime Minister highlighted the challenge facing China at the DBS Asian Insights Conference Leadership Dialogue. The forum moderator Robin Hu, head of Temasek's sustainability and stewardship group, had asked whether there was a universal standard of development or political system for countries.

PM Lee pointed to China's imperial history to show the hurdles China has to overcome to build a model of development and political system that, like Singapore's, is different from the West.

Ancient China had a huangdi (or emperor), and dynasties would be in power for a few hundred years before "the system breaks down and you start a new dynasty".

"But that doesn't work any more so you have to find your own way forward, and that's what they are trying to do. I do not underestimate the difficulty of the challenge," he said.

There is no universal system and every country has its own difficulties, he added.

In the United States, the political system is facing a very great test because of the deep divisions between the Democrats and Republicans, and strong populist reactions towards intellectuals and the policy intelligentsia, and the affluent and privileged, he noted.

In Europe, populist sentiment has also moved against immigration and openness.

"It is not so clear that anywhere in the world, there is a solution which is working very well for any of these countries," he said.

The US, however, expects China to become more like America, PM Lee said. If it does not, the Americans worry whether the Chinese will become unfriendly and non-cooperative.

But, he added: "Why should China become more like America?... the Chinese don't expect America to become more like China, so there is not a symmetry in this expectation."

PM Lee hopes this would change as more Chinese study and travel abroad, and with more exchanges between academics and leaders of both countries.

He noted that Chinese President Xi Jinping has laid out a vision for China to become a "great modern socialist country" by 2050.

The Chinese term for great power, "qiang guo", can also be translated in English to "great country", which the Prime Minister said was a gentler interpretation.

"So I think people would want to know how gentle a great power China will be," he said, adding that such a country would defend its interests, accommodate the interests of others, and be a constructive player in the global economy.

China has signalled it intends to be such a country, but how it will eventually turn out will be seen only through how it reacts and deals with crisis and opportunities, cooperates and deals with conflicts with other countries.

"Then you will know what sort of China will it be and how it will work out in the 21st century," PM Lee said.