Sustaining US presence and China's peaceful rise

This is an edited transcript of a speech by Foreign Minister Vivian Balakrishnan last Wednesday at the Centre for Strategic and International Studies in Washington. He spoke about the United States' role in the world, US ties with Singapore and the region, and US-China ties.

Since the end of World War II, America has helped to keep the peace in our region. If you take your mind back to the 1950s and 1960s, the stand and the sacrifice that America made in Korea and Vietnam provided the rest of us in South-east Asia time and space to prove that open market economic integration works.

Singapore became a global city, a key node in the emerging global value chains, before the word "globalisation" became fashionable. Because of this experience, Singapore has never shied from publicly articulating the value of a continued and sustained American presence in our region. Another way of putting it, we have viewed America as a benign hegemon, a positive force for good and we have been a beneficiary of this presence.

SINGAPORE-U.S. TIES

Since independence, we have developed a mutually beneficial economic relationship with the United States. It has grown and matured, and is based on mutual respect, trust, the rule of law, respect for intellectual property, and fair and open market access.

The US-Singapore Free Trade Agreement (FTA) was, in fact, the US' first bilateral agreement with an Asian country. It was ahead of its time and even now after 15 years, it remains a high-performing FTA that continues to benefit both countries.

Every time we see President Donald Trump, we remind him that the US consistently runs a substantial trade surplus against Singapore. I emphasise that - a substantial trade surplus against Singapore. In 2018, this stood at around US$18 billion (S$24.8 billion). But we also emphasise to the President that we are not complaining. That is a subtle hint that we don't look at bilateral trade balances in isolation.

In 2017, Singapore was the US' second-largest Asian investor and, in fact, we were the top Asian investor in commercial property in 2018. US exports to Singapore and Singapore investments in the US support more than a quarter of a million American jobs. In 2017, US foreign direct investment in Singapore amounted to US$274 billion. This represents about 80 per cent of the total US foreign direct investment in Asean, which totals around US$328 billion.

Incidentally, this figure of US$328 billion means that America has invested more in South-east Asia than it has invested in India, China, Japan and Korea combined. This is another factoid which we constantly remind the administration of, because the point here is that America has real skin in the game and America has been a welcome positive presence in South-east Asia.


Foreign Minister Vivian Balakrishnan with United States Secretary of State Mike Pompeo before attending meetings at the State Department in Washington last Thursday. Dr Balakrishnan was on a four-day working visit to Washington that ended last Friday. PHOTO: AGENCE FRANCE-PRESSE

MAJOR SECURITY COOPERATION PARTNER

On the defence front, when the US was asked to leave Subic Naval Base and Clark Air Base in the late 1980s, Singapore stepped up and under the 1990 memorandum of understanding, we offered to host a logistics command post. This was the basis of the "places not bases" concept that the US has, in fact, replicated in other regions, including Thailand.

We have been a "major security cooperation partner" of the US since 2005. Our facilities have served as a transit point for US ships and aircraft through the region in order for them to refuel, resupply and repair.

Today, US forces remain the most frequent foreign visitors to Singapore's military facilities. I should add that Chinese and Russian ships also transit through Singapore.

There is a strong argument to be made for the US to pursue a more active economic agenda in the region, in particular with Asean. Asean will continue to be a major source of global growth and demand, and will be a lucrative investment destination. I had already explained earlier that the US has more invested in Asean than it has in India, China, Japan and South Korea combined.

he US military and the Singapore military exercise, both bilaterally and multilaterally. We enjoy a high degree of inter-operability. The Republic of Singapore Air Force has three detachments in the US, two in Arizona and one in Idaho. This allows us to train our pilots in a much bigger and less congested airspace, more than what we have at home.

In fact, the other factoid is, if you ask: Which country has the most number of foreign troops based in the continental US? The answer is Singapore. This again illustrates the deep reservoirs of trust and goodwill between our two nations.

Speaking of Singapore's air force, in order to replace our fleet of F-16s, we are also looking at the initial acquisition of four F-35 Joint Strike Fighters, with the option of subsequent purchases if we decide to proceed.

The robust economic, defence and strategic relations between the US and Singapore are a prime example of the partnerships that form the bedrock of continued and sustained US engagement in our region.

RISE OF ASIA

But let's zoom out beyond Singapore.

We all recognise that the regional architecture has been transforming over the last couple of decades. In fact, while I've said that Singapore has benefited from America's presence in Asia, Singapore was actually not the chief beneficiary.

 
 
 

The biggest beneficiary of this Pax Americana in Asia is China. Today, China is the second-largest economy in the world. China is Asean's biggest trading partner. Most countries in Singapore's part of the world, including allies of the US - such as Australia, Japan and South Korea - also have China as their largest trading partner. China's share of the global gross domestic product has tripled.

When it first joined the World Trade Organisation in 2001, its share was about 5 per cent of global GDP. Today, its share has tripled to 15 or 16 per cent of global GDP. China ranks among the world's fastest-growing economies and in 2010, it overtook Japan to become the second-largest economy.

U.S. SEAT AT THE TABLE

As the centre of gravity - and of economic balance - shifts, I would argue that the best way for the US to safeguard its own enlightened long-term self-interest is to keep its seat on this table and to actively contribute to the shaping of norms that govern the global commons. And to remind itself that, in fact, for seven decades, this system was envisioned by and underwritten by the US and the US remains a welcome presence.

A RACE FOR TECHNOLOGICAL LEADERSHIP

Let me move on to the race for technological leadership. We believe that in this arena, US leadership will be even more crucial as we undergo this technological revolution. Machine learning, artificial intelligence, big data and other disruptive technologies are radically transforming our economies, our societies and even our politics. Many of these technologies began in the US.

The US continues to have the expertise, the innovative capacity, talent and institutions, including the rule of law, that will ensure or certainly help to ensure that these technological changes will benefit as many people as possible, and to do so in a fair and ethical way.

The US is by far the country with the most advanced and innovative technology, and countries all over the world will want to jump on this bandwagon.

The question is: Are we going to split into two separate bandwagons on two different journeys, or will we continue this journey of integration, but on commonly accepted rules by consensus?

U.S.-CHINA RELATIONS

The protracted US-China trade talks have created great uncertainty and volatility for our markets, especially for those of us in South-east Asia. In the case of Singapore, because our trade is three times our GDP, any disruption of global trade will have a disproportionate impact on us.

How the competitive dynamics between the US and China play out in trade, technology or security will impact all of us disproportionately. And South-east Asia, which stands at the intersection of major power interests, is viewing this duet with great concern, maybe even grave concern.

One point is that for us in the middle, and especially for smaller countries, we do not wish to be forced into making invidious choices. So we hope that both sides will work out a strategic response that will take into account China's increasing influence and weight in the international arena, and that both sides will find the way to accommodate each other's legitimate interests.

The US has described China as a "revisionist power" - I think this was in the December 2017 National Security Strategy paper. And China has been described as a "strategic competitor" in the US' 2018 National Defence Strategy paper.

Some have bandied the concept of a "G-2" or a "grand condominium of the world". This, to my mind, is not necessarily a preferred state of affairs because by definition, a G-2 excludes everyone else.

On the other hand, viewing China purely as an adversary to be contained will not work in the long term, given the entire spectrum of issues that will require cooperation between the US and China. Without active cooperation between the two superpowers, all the global challenges of the next century cannot be solved. So, competition with China is inevitable but it does not have to be a zero-sum game. Constructive competition should take place within the bounds of established international norms and an adherence to international law.

As I noted earlier, the world - and certainly Asia-Pacific - has experienced seven decades of peace and prosperity precisely because of the stability brought about by a world order envisioned and underwritten by the US. Now think about it, if China has been the largest beneficiary of the system, it is highly unlikely that China would seek to directly undermine a system which has provided a formula for peace and prosperity in the region, and especially in Asia.

However - and this is an important however - China will want to have a significant say in shaping these evolving norms, processes and institutions. And it is an entirely legitimate expectation on the part of China.

I just attended the second Belt and Road Forum in Beijing last month, together with Prime Minister Lee Hsien Loong. In his speech at the forum, Chinese President Xi Jinping emphasised China's commitment to the continued opening up of the Chinese market, the import of more competitive products and services.

He also committed to increase protection of intellectual property, and to strengthen macroeconomic policy coordination with other major economies.

China has openly addressed the questions raised about the intent and viability of the various projects under the Belt and Road Initiative. It has committed to work together with all partners in the spirit of openness, inclusiveness and transparency. And I will accept those assurances at face value.

At the same time, the success of the Belt and Road Initiative will depend on how partners and stakeholders work together in order to shape and implement these projects. And time will tell. As PM Lee said in Beijing last month, "how China performs its prominent global role, and how the international community adjusts to China's growing influence, will determine whether all of us, and all our countries, can continue to enjoy peace and prosperity".

U.S. ENGAGEMENT OF THE REGION

So the point I'm leaving with you is that in South-east Asia, we welcome both a sustained US presence and a peaceful rise of China.

We are heartened that the US has continued to engage Asean, has put Asean at the centre of its Free and Open Indo-Pacific strategy - and when I say centre, I don't just mean that we are geographically at the centre, but philosophically, diplomatically and strategically, Asean remains at the centre of the Indo-Pacific area.

The countries in my region welcome the Trump administration's announcement of economic initiatives in digital economy, energy and infrastructure, and cyber security. The US' Indo-Pacific strategy seeks to strengthen America's bilateral and multilateral cooperation with all countries in our region. We hope the US will continue to do more to plug the gaps in engagement that have been created by the disruptions of our times.

There is a strong argument to be made for the US to pursue a more active economic agenda in the region, in particular with Asean. Asean will continue to be a major source of global growth and demand, and will be a lucrative investment destination. I had already explained earlier that the US has more invested in Asean than it has in India, China, Japan and South Korea combined.

The point is this: The growth prospects in South-east Asia, which have not yet fully harvested the demographic dividend, mean that a South-east Asia with a combined GDP of US$2.55 trillion today and a collective market of 630 million people - this market, this combined GDP - is set to grow in the next two, three, four decades. So the point is, it is an opportunity waiting and it is a part of the world where the US has occupied pole position for a long time.

CONCLUSION

So let me conclude by restating the obvious. We live in a rapidly evolving multipolar world, confronting a technological revolution, which in turn has disrupted society and economies, and in particular elicited concern and anxiety about jobs and middle-class wages. Successfully dealing with these challenges both domestically and internationally will be the central political challenge of our time.

If America remains a confident, open and inclusive conductor, co-conductor and cheerleader of this new emerging global architecture, then a golden age awaits us.

If, on the other hand, for tactical or for clearly misjudged strategic decisions, we see a world that bifurcates, that is splintered into rival blocs, and even the Internet becomes what some people have called "splinternet", then we will fail to harvest the opportunities that this technological revolution opens up for all of us.

The US has built a large reservoir of goodwill, especially in my part of the world, and we believe the US remains well placed to continue to reap the benefits of my region's economic dynamism. After all, you sowed the seeds of security, prosperity and friendship based on mutual respect a long time ago. My appeal to the US is to double down and reap the rewards together.

A version of this article appeared in the print edition of The Sunday Times on May 19, 2019, with the headline 'Sustaining US presence and China's peaceful rise'. Print Edition | Subscribe