World Economic Forum: PM Lee talks about navigating US, China ties

Prime Minister Lee Hsien Loong in a dialogue with World Economic Forum president and former Norwegian foreign minister Borge Brende in Davos yesterday. PHOTO: MCI
Prime Minister Lee Hsien Loong in a dialogue with World Economic Forum president and former Norwegian foreign minister Borge Brende in Davos yesterday. PHOTO: MCI
Prime Minister Lee Hsien Loong met Pakistan Prime Minister Imran Khan on the sidelines of the 50th annual meeting of the World Economic Forum in Davos on Tuesday. Both leaders reaffirmed the friendly relations between Singapore and Pakistan, and note
Prime Minister Lee Hsien Loong met Pakistan Prime Minister Imran Khan on the sidelines of the 50th annual meeting of the World Economic Forum in Davos on Tuesday. Both leaders reaffirmed the friendly relations between Singapore and Pakistan, and noted that both sides would work to strengthen their relationship and find potential areas of cooperation. PHOTO: MCI

It's vital to understand that S'pore is acting on its own behalf, he says

Strains in the US-China relationship have meant that where it was previously effortless for a country to say it was friends with everybody, including the United States and China, now, from time to time, one is pushed to be better friends with one side or the other.

Prime Minister Lee Hsien Loong drew laughter from the packed room of 200 business leaders and officials as he made this observation at a dialogue yesterday in Davos, Switzerland, with World Economic Forum president Borge Brende, a former Norwegian foreign minister.

Mr Brende quipped: "A lot of Europeans understand that."

PM Lee replied: "Well, the smaller you are, the better you understand it."

He noted that when Singapore does have to make a stand, it is important that people understand Singapore's choices are on its own behalf.

"Because we are making decisions for Singapore, and not because we are a cat's paw for one side or the other," he said. "That means you must have the courage to stand up and call things as they are and, from time to time, you will incur, well, at least a raised eyebrow and sometimes more than one raised eyebrow from one side or the other, and occasionally both.

"But it is necessary to do that because once people no longer think that you are a serious interlocutor, calculating on your own behalf, you are written off, you are finished."

PM Lee noted that America's benign engagement in Asia as well as China's rise and growth had enabled the region to prosper over the past 50 years.

World trade was also buoyant.

But today, the US is concerned it is footing too much of the burden, and that other countries are taking advantage of it.

China's influence has also grown, as has its role in the global economy.

 
 

How the relationship between the US and China would play out and its impact on the global economy was a key theme of the 30-minute session.

"Singapore hopes that we will be able to cooperate with them and participate and encourage them to engage in a way which leaves space for other countries to prosper, to set their own path," said PM Lee.

"And in the long term to welcome a new major player, and not feel that this is an elephant in the room that may not notice who else is there and what else may be underfoot."

Asked whether he felt US-China trade tensions had peaked with the phase one trade deal reached this month, PM Lee said he did not think they had.

The issue of how an incumbent hyperpower accommodates a rising new power whose economy is set to grow and eventually become larger than that of the US - although not for years to come - will remain.

Uncertainty has also meant that investments have been affected, and business decisions are being put off. And the prospect of a bifurcation in technology, whether on 5G networks or the entire supply chain, remains, he added. This will have a significant negative impact on long-term growth, and create mutual suspicion and anxiety.

PM Lee noted that some optimists say global supply chains are so closely integrated that pulling them apart is unthinkable.

He said he did not take such an optimistic view, noting that European countries were integrated before World War I, but this did not stop miscalculations and tensions from breaking out. "We have had 50 years of peace. Can you bet on another 50 years of peace? The odds are not negligible."

The discussion turned to the possibility of a prolonged slowdown.

PM Lee said: "The key thing is, if you have the strategic tensions not being resolved and flaring up again downstream, which can happen, then it is not just an impact on the business cycle, it is an impact on the long-term trajectory of the world."

He noted the Group of 20 forum decided after the 2008 global financial crisis to try and coordinate monetary policy. "We cannot all be running trade surpluses. Whom are we going to be having surpluses against? Antarctica?"

On whether he saw a silver lining, PM Lee cited the tech sector, pointing to its tremendous vibrancy and optimism. But he added that while new opportunities will be generated, so will new problems.

 
 

"When social media came along, everybody said this is marvellous, this is a way to democratise debate, and everybody has a voice and now we shall have an egalitarian, participative, basically nirvana will have arrived," he said.

"Now, we see what it is like. It does not look like it is nirvana."

PM Lee noted that human societies had, over centuries, developed circuit breakers to deal with the spread of new views and ideas, but these are now transmitted in a fraction of a second.

"When you speed up the operating cycle like that by 100 or 1,000 or 10,000 times, the operating system will malfunction. Human beings are not meant to work like that. Your brain does not speed up 10,000 times," he said.

"You need time to hoist things in, to mull it over, to think it, discuss it, to test it and gradually to get some grey hair, and then you have some better decisions about it."

As for how smaller countries can cope with the platform economy, PM Lee noted that Google and Facebook are in Singapore, with data centres and engineers. "We do not have very many unicorns of our own but we are part of the global economy and part of these major participants," he said.

"If there are proper rules which protect participants, big and small, in this environment, then, I think we can make a living. If there are no rules, and all of a sudden you have a Twitter storm or something befalls you in the middle of the night, next morning you wake up and you find you have been devastated. It can happen."

 
A version of this article appeared in the print edition of The Straits Times on January 23, 2020, with the headline 'PM Lee talks about navigating US, China ties'. Print Edition | Subscribe