WASHINGTON – From his take on China’s economy, to the Singaporean affinity for IT, and lessons from the Republic’s experience in multiculturalism, Deputy Prime Minister and Finance Minister Lawrence Wong fielded a variety of questions during a dialogue on Friday at the Centre for Strategic and International Studies, a prominent Washington-based think-tank.

The dialogue was the highlight of the last day of his 10-day working visit to the United States, during which he affirmed strong bilateral ties and met top US officials including National Security Adviser Jake Sullivan, Secretary of Commerce Gina Raimondo and US Trade Representative Katherine Tai.

Here are excerpts from Mr Wong’s replies during the hour-long discussion moderated by Mr Christopher B. Johnstone, the Centre’s senior adviser and Japan chair.

On China’s economy

They are going through a challenging sort of situation now, because there is high youth unemployment. They have decided to prick the real estate bubble, and there will be painful consequences from doing so. I think it is the right thing to do, because there were excesses building up in the real estate sector.

But real estate is about 20 to 30 per cent of the economy. And once you prick the bubble, there are all sorts of consequences, knock-on effects cascading throughout the entire economy, which they will have to manage. 

At the same time, they will have to rebalance the economy towards one that is more consumption-based. It is not easy because they will also have to undertake reforms on the social security front, which will take time. It is quite complex, given the size of their country. But talking to their officials, I think they understand what needs to be done. It is a matter of communicating and also making sure that the implementation is done well. 

You hear a lot of commentators and people talking about Peak China. We think that is overstated; we think China will continue to grow. 

China’s economy will grow, maybe 4 per cent, maybe 5 per cent. But to what extent will it have that same entrepreneurial vitality and dynamism that it had before, I do not think anyone has the answer now. 

I would not underestimate the natural animal spirit of the Chinese people. They are highly resourceful. They are determined to secure a better life for themselves. And you should never underestimate their tremendous sense of drive and energy in the Chinese people. 

On the US economic engagement in the region

We have long advocated for more economic engagement by the US in Asia, and in particular South-east Asia. Our preference would have been a regional trade agreement. We had the TPP (Trans-Pacific Partnership), but that is water under the bridge. If possible, we would like to see market access and trade liberalisation, but I think it is very hard to talk about these things under current circumstances in US domestic politics. 

But in the meantime, we have IPEF (Indo-Pacific Economic Framework for Prosperity) and that is still very substantial, and there can still be good outcomes achieved through IPEF. I think in areas like supply chains, green economy, digital economy – these are things that we are pursuing, and we hope certainly that there can be some substantial progress, in particular by the time that the Apec (Asia-Pacific Economic Cooperation) summit is held in November this year. 

On US-China ties

Both sides have made very clear that they do not want a confrontation. And hopefully, there will be a view that this is not a zero-sum contest – it is not one side wins, the other side loses. The world is big enough to accommodate both the US and China, and the two can coexist and develop together.

It is very good that talks and engagements have resumed in recent months. Hopefully, through these dialogues and engagements, there can be an effort to reduce misperceptions, misunderstanding, and enable more mutual accommodation and meeting of minds. What we would like to see and what we hope to see is that the presidents on both sides, President Xi (Jinping) and President (Joe) Biden, hopefully will have a chance to meet and talk face to face in Apec, and they will be able to help rebuild the strategic trust that is so important to take the relationship forward in a positive way. 

If this does not happen and if the relationship turns sour, then it will be a big problem for the two countries, but it is also a huge problem for the rest of the world. Everyone will be worse off. 

Takeaways from US trip

We have a solid and growing bilateral agenda between America and Singapore. Both sides share a very similar strategic outlook of the world. We have long had close cooperation across a broad range of issues, from defence to economics. And there is now a growing desire, mutual desire, to see how we can further strengthen that partnership.

There is also recognition in the administration, which has consistently told us that they do not want Singapore to be in a position to have to choose sides. They recognise what our perspectives are, and the perspectives of countries in South-east Asia, so having a close relationship with the US does not mean we have to alienate and exclude engagements with other countries, including China.  

On Singapore and IT

It is a sector that we pay a lot of attention to because, given our stage of economic development, the only way for us to move forward really is to invest in innovation, R&D and push the frontiers of innovation. IT becomes very important, digital technologies are very important. Not just as a sector in itself, but as an enabler across all the pillars of our economy.

We are investing heavily in IT. We continue to encourage young people to enter the space in Singapore, and we are continuing to attract talent from around the region to come to Singapore to study and do well in IT. Our advantages are that we are small, we are nimble, we are a city-state. While we may not be at the cutting edge of IT – I mean the latest ideas and innovations, I think, will still come from American universities, American companies – but we can be a fast adopter. We can scale up applications very quickly. Not just in one sector, but across the entire economy and across our entire society.  

We do have the other advantage of a population that does embrace technology. We are techno-optimists by nature. Yes, technology does disrupt people’s lives. It does make some jobs obsolete. Over the decades, we have found ways to reskill, upskill our workers, make sure that anyone who is affected by technological disruptions can get placed to a better job, make use of machines and tools to increase the salaries of our workers.

This is not something new, this is something we have been doing year after year for decades, so that trust and confidence that technology can help make lives better is there, and that is why we are able to embrace technology, including new technologies like AI, and we can hopefully continue to keep the economy growing and improve the lives of our people. 

On regulating AI 

One of the key issues that we are grappling with – countries everywhere are grappling with – is how to harness the benefits of AI and innovation and the impact of AI while minimising the downside risks.

You can have an AI model that works well 99 per cent of the time, but that 1 per cent failure, if applied in a very potentially damaging scenario, can have knock-on implications for many, many people. How do we tackle these sorts of risks? What should be an appropriate governance framework for responsible AI usage? 

It cannot be that companies are let off the hook. Surely companies cannot say we do everything and then when there is a problem, governments come to the rescue. That surely is too late. What is the right framework that companies can use in applying AI for different use cases that will ensure they take some responsibility? And governments and the private sector work closely together in having this framework and a set of principles governing responsible AI.

We have done some work in this respect for Singapore. I think the US is also interested in this space, and we hope that we can work together and collaborate in this area of responsible AI. I think it is going to be hard to talk about global standards at this stage, but we take it step by step, and hopefully, we can get more like-minded countries to join us and expand the coalition. 

Hopefully, that modus vivendi, where South-east Asia and Singapore can continue to have an open inclusive region, engaging not just America, but China, EU, other major powers all engage in our part of the world. Expanding the common ground we share and maximising our chances for stability and shared prosperity at a time when the world is increasingly becoming very uncertain and turbulent. That is our perspective and that is my main takeaway from this visit. 

Singapore’s biggest domestic challenge in the 2020s

Our biggest challenge is this – Singapore is always an improbable nation. We are so tiny, and with no natural resources – you would not have bet on Singapore in 1965. You will not expect Singapore to survive, but we did. It is nothing short of a miracle. Our challenge is to sustain this little miracle called Singapore for as long as possible.

My vivid impression of this is when I was a student in Michigan. In Michigan, there is a ghost town called Singapore. It is by Lake Michigan near the Kalamazoo River. It was founded in the 1830s. No one knows why it is called Singapore.

But presumably, because Singapore was founded by the British as a British port in 1819, and very quickly, we became a thriving port for the British. Perhaps word had spread from the exotic Far East, there was something called Singapore, and you know how it takes time for news to travel in those days. So in the 1830s, someone decided to set up a town in Michigan, and it was a shipbuilding and lumber port, and it did well for a while.

But after 50 years, the shifting sand dunes swallowed up the town. And if you go there now, you can only see a signpost that says these are the ruins of Singapore. So Singapore in Michigan did not last for very long, about 50 years. Our mission is to make Singapore in South-east Asia last for a very long time. 

On the use of bases in a war

Well, it is a hypothetical scenario. First of all, if there is war, we are all in big, big trouble. Let us hope that there is no war. We are not a US ally, to be very clear. We are quite unique. I think we are the only country in the world which is a Major Security Cooperation Partner (MSCP), so we are not an ally of the US. We let American troops use our ports and bases. We provide rotational support, logistical support, we allow them to come through for their rotational deployment, but these are peacetime arrangements, and it has been a win-win for both the US and Singapore.

If there were to be other circumstances, then I think we will have to consider the context of circumstances and think through carefully, like I said, always from the perspective of what is in Singapore’s interest. Our starting point must be, let us not even get into a situation where there is a conflict or a war in Asia. 

On what the US can learn from Singapore’s multiculturalism

I am not going to be so presumptuous as to tell the US that you can learn from us. But we have a model that works for our circumstances and needs. It starts off by recognising that people come from different backgrounds, different races, different religions. We do not seek to assimilate into one central identity.

Rather, we want everyone to preserve their own cultures, their own traditions. We want everyone to feel that they have a place in our society. Even the smallest of minorities must feel that they are valued, and they can contribute to society. 

At the same time, while we encourage that, while we provide for that, we also want groups to come together and interact with one another as much as possible so that through that interaction, we find common ground. What is it that we share together as Singaporeans? There are many things that we have in common. Then hopefully over time, through interactions, through shared experiences, through shared memories, we expand the common ground that we share with one another. 

That is how we think of multiculturalism in Singapore. It is a work in progress, because nation building, building a Singaporean identity is always a work in progress; but it is also a process which we have found requires mutual accommodation and compromise.

Compromise must never be seen to be a bad word. Because if every group asserts maximum entitlement, everything must be 100 per cent – I have to do everything, and if I cannot achieve all of what I want, I see that as a slight, I see that as an insult to my tribe – then it becomes war of every tribe against every tribe and there is no common ground.