Thursday, 8 November 2018

PM Lee Hsien Loong's Dialogue at the Bloomberg New Economy Forum on 6 November 2018

China, US must ensure trade tensions don't hurt broader ties: PM Lee
There are so many areas where US and China have to work together, he says
By Rachel Au-Yong, The Straits Times, 7 Nov 2018

The leaders of the United States and China have to work out how to resolve their trade disputes, and ensure ongoing tensions do not harm the broader relationship between them, Prime Minister Lee Hsien Loong said yesterday.

"The leaders of the two countries have to decide what they want to do and if it cannot be worked out, you really want to keep it from boiling over, respond in a restrained way and try to keep things going and prevent this from poisoning the overall relationship," he said.

"Between America and China, there are so many things where you have to work together, otherwise you are not going to get anywhere, starting with North Korea."



PM Lee was responding to a question at a dinner for around 400 top business and thought leaders attending the Bloomberg New Economy Forum. The trade war and its impact on Sino-US ties were a top concern at earlier sessions on the forum's first day.

Tit-for-tat tariffs on hundreds of billions of dollars of each other's goods by the world's two biggest economies, ostensibly sparked by the US' trade deficit with China, have hit business sentiment.

China's Vice-President Wang Qishan suggested the US-China trade war should end and denounced trade unilateralism in his keynote speech, while American strategist Henry Kissinger was "fairly optimistic" that the US and China could avoid a wider conflict.

At the dinner dialogue hosted by Bloomberg News' editor-in-chief John Micklethwait, a delegate asked PM Lee what he would advise Chinese President Xi Jinping and US President Donald Trump to do about the trade war if they were at the same table with him.

"I would be hesitant to be at such a table," PM Lee replied to laughter from the audience. But he added: "The trade issues are genuine ones. The trade deficit is on Mr Trump's mind but the economists will tell you (it) is a manifestation of macroeconomic problems and not a matter of trade restraints or lack of trade openness... That has to be dealt with separately."

PM Lee noted that both sides had come close to a deal several times, but these faltered in the end.



Asked what the new world order would look like, with the US taking a back seat in recent years, PM Lee said he did not see this as a retreat but as the US "rethinking its role".

"Up till now, America was such a dominant player in the world economy that it felt it was in its interest to provide global public goods," he said. "The world has prospered greatly, and America with it."

But with its economic fortunes shifting, the US is asking whether it should put itself first instead.

"America is entitled to take such a position, but if you work like that it will be a very different global position. There is nobody to take on the role that the US hitherto played," he said. If this persists, it would be "a different kind of world in which not only small countries feel uncomfortable".

"I hope it doesn't go that way... And that depends on a multilateral global order, where there is some weight and authority and respect given to supranational institutions like the United Nations, the World Bank, the International Monetary Fund," he added.



PM Lee was also asked questions about global rivalries spilling over and affecting ties between countries in Singapore's neighbourhood. "Neighbours are never without complexities," he said, noting that even the US and Canada have issues.

"We don't choose our neighbours. We are blessed with two bigger than us, and we get on well with them, generally," he said. "There will always be issues that will come up, and we will have to deal with them in a way that is constructive, win-win and respects the core interests of both countries."








 



SINGAPORE 'A BONSAI TREE' MODEL

I think you overstate our role. They see us as a bonsai tree model of what China is. It's intriguing to scrutinise, but then you ask yourself, 'We are so many hundreds of times bigger, what of this is relevant?' Hopefully some ineffable essence is useful to them and they take it back and transmute it and it may take root in China.

PM LEE, responding to a question about Singapore's role in China's rise.



 



US-CHINA RELATIONS

The leaders of the two countries have to decide what they want to do, and if it cannot be worked out, then I think you really want to keep it from boiling over, respond in a restrained way and try to keep things going and prevent this from poisoning the overall relationship.

PRIME MINISTER LEE HSIEN LOONG, on the US-China trade war.



PM'S CHILDREN AND POLITICS

Not sure any of them have shown any interest in coming to politics. My sons, my daughter - they are entitled to, but I don't think it's likely they feel the same compulsion that I did - duty that I do. They have their own responsibilities, their careers. I'm sure they'll make contributions in their own ways. But it would be unkind of me to add more burden on them. It's difficult enough for them as (it) is to carry my name.

PM LEE, on whether his children would enter politics.





Singapore a 'bonsai tree model' of what China is: PM Lee
Republic's lessons harder to apply in a country as large as China but hopefully some essence is useful to them, he says
By Rachel Au-Yong, The Straits Times, 7 Nov 2018

Singapore's role in the rise of China is not as large as some make it out to be, said Prime Minister Lee Hsien Loong, and instead described the island as a "bonsai tree model of what China is".

Like the miniature tree, Singapore might be "intriguing to scrutinise", but its lessons are harder to apply in a country as large as China.

But he added: "Hopefully some ineffable essence is useful to them and they take it back and transmute it and it may take root in China."

PM Lee was speaking at a dialogue with Bloomberg News editor-in-chief John Micklethwait, who asked for his views on the Asian superpower and said that Singapore has "always played an outsized role in China's development".

"I think you overstate our role," PM Lee replied, before providing the bonsai tree description at a welcome dinner for around 400 top business and thought leaders attending the Bloomberg New Economy Forum.

PM Lee said he did not think China saw Singapore as a model for reform, but added, to laughter from the audience, that they could be "intrigued as to how it's possible in Singapore to have free and open elections regularly, multi-party politics and one party remaining in power for such a long time".

"It is strange and it's not a given outcome for Singapore either," he added.

Similarly, Singapore's road map to success cannot be copied by Britain after it leaves the European Union, PM Lee said in response to a question on whether London can be a "Singapore on the Thames" after Brexit. "I don't think we'll have a London by the Merlion... Our histories are completely different," he said.

He cited how the British government accounts for about 40 per cent to 45 per cent of the United Kingdom's gross domestic product, while in Singapore, this figure is closer to 16 per cent. "To say (the UK) can become like Singapore - are you going to give up two-thirds of government spending, state pensions and national health?" he said.

"You will have to find a different way to prosper having made the decision to leave the European Union," he added. "Maybe, maybe if you look at Singapore, you might think you have some ideas that you can use, we hope so. But I don't think you can take one society's solution and just plonk it on a different society."

PM Lee also said that Singapore would do a trade deal with Britain directly, and in the meantime, it would port over similar trade allowances it has with the EU "because not much would have changed in Britain's circumstances domestically".



On whether the Singapore model can be followed elsewhere, PM Lee said that while he hopes others find the Republic interesting, its solutions may not be what they wish to apply.

He pointed out that one of the "cardinal principles" of healthcare here is that people take responsibility for it, and while the Government pays a large part in subsidies, there is still an element of co-payment unless one is very poor. "That's not a principle accepted everywhere... the national healthcare system in Britain explicitly refuses to," he said.

But he also noted Singapore is able to do this because it built its system progressively, through its Central Provident Fund.

"If you haven't built that up over a long period of development, and overnight you want to put aside one-third of income into a compulsory savings fund for your old age so you will not retire poor, I think a lot of people would get angry straightaway," he said.

The Prime Minister also tackled questions about immigration, which he said was "a vexed subject in every country".

Asked if he thought there were any countries that did immigration well, PM Lee said different countries make different trade-offs.

Some have been very open and benefited considerably like the United States, he said, adding that while immigration is now a hot political issue there, it is nevertheless important to have an environment where people can live and work and make a country vibrant.

"It is a tremendous plus that America has and which China and Japan don't have," he said.

In contrast, Japan is a much more closed, tight-knit society which is less conscious of the outside world.

"Now they have to shift that trade-off because the numbers are telling them that their population is falling," he said.

Singapore is trying to strike a "careful balance of having enough of the next generation born to us, but (with) some significant contribution from people coming in, who can cast their lot with us and become Singaporean," he said.

PM Lee was also asked what other models of governance inspire him. While no single model would probably apply to Singapore, the closest one might be Venice, the Italian city which has thrived for 900 years, he replied.

"What we are really looking for is how to be a small country and have the elixir of life. In other words, to be able to adapt to change, dodge bullets and remain successful for a very long time to come," he said.



Venice is the best model, he said, and while it has not been the same after the centre of gravity shifted from Europe to the Atlantic Coast, "900 years is not a bad run".

"What we want to do is to be able to keep on reinventing ourselves as the world changes, so that 100 years from now, if the next Bloomberg conference is cancelled, it can still come to Singapore," he said, in a reference to how organisers had moved the forum from Beijing after its Chinese partner asked to postpone it.





Possible for next General Election to be brought forward: PM Lee
By Rachel Au-Yong, The Straits Times, 7 Nov 2018

Prime Minister Lee Hsien Loong has left the door open to calling a general election next year, as Singapore celebrates the 200th year since Sir Stamford Raffles' arrival.

He was asked by Bloomberg News editor-in-chief John Micklethwait last night if the bicentennial might be a reason to bring forward the general election, which must be held by January 2021.

"It's always possible," Mr Lee replied. "There are many reasons to bring elections forward or not, so we'll see."



He was speaking at a dialogue, held as part of a welcome dinner at the inaugural Bloomberg New Economy Forum.

Mr Lee was also asked if he would recommend "politics in the modern age" to the next generation of Lees - his three sons and daughter.

He replied: "Not sure any of them have shown any interest in coming to politics. They are entitled to, but I don't think it's likely they feel the same compulsion that I did - duty that I do. They have their own responsibilities, their careers. I'm sure they'll make contributions in their own ways.

"But it would be unkind of me to add more burden on them. It's difficult enough for them as it is to carry my name."

Last year, Mr Lee and his wife Ho Ching were publicly accused by his siblings of harbouring political ambitions for their son Li Hongyi, 31. PM Lee refuted the notion while Mr Li, who is in the public service, has said he is not interested in politics.



The uproar came in part over what to do with 38 Oxley Road, the home of founding Prime Minister Lee Kuan Yew.

During the question-and-answer segment of the dialogue, Mr Douglas Hsu, who chairs Taiwanese conglomerate Far Eastern Group, said 38 Oxley Road should be retained to remember the late Mr Lee Kuan Yew.

Responding, PM Lee described the conflict with his siblings over the fate of their father's home as a "vexed issue" and said he has recused himself from all decisions on the matter.

He noted that Deputy Prime Minister Teo Chee Hean has said the decision on what to do with the house will be left to the government of the day, when PM Lee's younger sister Wei Ling moves out.

"One day, when she moves out, the Cabinet of the day will decide what to do, and I think it's best to leave things where they are," he said.

To this, Mr Micklethwait quipped: "Imagine the idea of the head of state (sic) recusing himself from matters concerning his own family - it'd be a strange thing to Americans."

On how social media may affect the political landscape and those who join it, Mr Lee said that social media also includes fake news, which could encourage opinions overnight that are not based on fact.

"It's ridiculous... One night you go to sleep and when you wake up, hundreds of thousands of people are agitated."

This makes it hard for the government of the day to map out long-term plans, he told the 400 business and thought leaders in attendance, and harder still to convince the populace of those plans.

"It's harder for people to focus on the long term and believe you have a workable scheme to get from here to there, because every day you are chasing a new rabbit."





We are ready to work on solution for US-China trade war: Chinese Vice-President Wang Qishan
He stresses that both US and China would gain from working together and lose from a confrontation
By Tan Dawn Wei, Deputy Foreign Editor, The Straits Times, 7 Nov 2018

A day after Chinese President Xi Jinping took a swipe at his trade rival, US President Donald Trump, for his protectionist policies, his right-hand man adopted a more conciliatory stance at a global forum of top thinkers and business leaders, hinting the US-China trade stand-off should come to an end.

In his keynote speech at the first Bloomberg New Economy Forum at the Capella Singapore yesterday, Chinese Vice-President Wang Qishan was forceful in denouncing trade unilateralism, while espousing the importance of settling any disputes through a rules-based system.

The world today faces many problems that require close cooperation between the US and China, he said, emphasising that both sides would gain from working together and lose in a confrontation.


"China will stay calm and sober-minded and embrace greater openness. Both China and the US would love to see greater trade and cooperation. We're ready to discuss and work for a solution on trade that is acceptable to both sides," he said.


"Negativity and anger are not the way to address the problems that have emerged from globalisation, nor will barriers and disputes help solve one's problems. Instead, they will only exacerbate global market turbulence."


Mr Wang's remarks come ahead of an anticipated meeting between Mr Trump and Mr Xi at the Group of 20 summit in Argentina at the end of this month. Mr Trump on Monday said China wants to strike a deal, and he is open to a fair pact.




The Chinese Vice-President's appearance as the high-level forum's keynote speaker was announced just days ago, heightening the excitement among the forum participants and media, given his political heft and close relationship with President Xi.

In his opening remarks, host and media mogul Michael Bloomberg described Mr Wang as "one of the most influential political figures in China and on the world stage".


Mr Wang has been a leading figure steering China's economic reform and foreign policy, and previously drove President Xi's far-reaching anti-corruption campaign.


The economic forum was originally slated to be held in Beijing. Organisers moved it to Singapore after the conference's Chinese partner requested that it be postponed to next year, as it clashed with China's ambitious inaugural China International Import Expo in Shanghai, which President Xi opened on Monday.


It was at this expo that the Chinese leader, warning of the dangers of protectionist trade policies, vowed to open up China even more, expand imports and strengthen intellectual property protection.


Mr Wang's speech to an audience of 400, which included former US secretary of state Henry Kissinger, former US Treasury secretary Henry Paulson and former Hong Kong chief executive Tung Chee Hwa, largely reiterated China's call to stick to the principles of mutual respect, openness and building consensus so that economic benefits can be shared by all.


He also took the opportunity to repeat the oft-cited need for the world to understand China's history and its past humiliation by imperial powers, and how that has shaped the Chinese psyche.


"China has to blaze a trail of its own," he said. "In the history of mankind, rejuvenation is for those who have had a glorious past."


In his 15-minute speech, Mr Wang spelt out the challenges facing the world, from rising populism to income inequality and climate change. He urged countries to "stay the course" and "respect each other's choice of economic path, build consensus and consultation".


His official visit to Singapore ends today. Yesterday, Prime Minister Lee Hsien Loong hosted a lunch for him. Mr Wang also called on President Halimah Yacob at the Istana on Monday.






China and US need to adjust to avoid disaster: Henry Kissinger
By Tan Dawn Wei, Deputy Foreign Editor, The Straits Times, 7 Nov 2018

As the chief architect of the United States' outreach to communist China more than four decades ago, former diplomat Henry Kissinger could be forgiven for viewing the current tension between the two countries with some dismay. But the truth is, though Sino-US relations are at the lowest they have been for years, Dr Kissinger remains optimistic that the two will not come to such blows that it would shake the global order.

However, both parties need to rebalance their perspectives, in the same way that their leaders had sought to explain their thinking to each other and find sufficient understanding 40 years ago, said Dr Kissinger, 95, who is widely regarded as one of the top strategic thinkers in the world.

When he knocked on China's door as Washington's emissary with his historic trip to Beijing in 1971, his mission was to begin the strategic change in the equation of the Cold War between the US and the then Soviet Union, and bring China into the international order.

"We knew very little of China but they knew a lot about us, because Chinese negotiators had read everything I'd ever written," said Dr Kissinger to laughter in the ballroom of the Capella Singapore, where he was speaking yesterday at the inaugural Bloomberg New Economy Forum.

That secret visit by Dr Kissinger, who was national security adviser, paved the way for President Richard Nixon's trip the following year, where he met Chinese leader Mao Zedong and subsequently established diplomatic relations.



China's economic might has grown by leaps and bounds since then, and while Nixon and Mao had sought to find common ground despite the wide disparity, Sino-US relations today have soured as the two major powers tussle for dominance.

"The challenge is to maintain a fundamentally cooperative relationship amid inherent differences of approach produced in large part by the changing technology and in some part due to the different philosophical approaches to challenges between the United States and China," said Dr Kissinger, who was also US secretary of state from 1973 to 1977.

"I believe that it is essential for China and the United States to explain to each other what the objectives are that they feel they must achieve and what the concessions are that they must not be asked to make, and the concessions each is willing to make, and not to get lost in a lot of detail before you know where you're trying to go."

A fundamental difference between US and Chinese thinking, he said, is that if there is a problem, Americans believe there will be a short-term solution, while the Chinese think problems are never completely solved and every solution is a ticket to a new set of problems.

"I think if the world order becomes defined by continuing conflict between the US and China, sooner or later, it runs the risk of getting out of control," he said.

"Some disagreements are inevitable. But the objective needs to be that both countries recognise that a fundamental conflict between them will destroy hope for a world order and run to great risk of conflict. And I think that objective can be achieved, and I am in fact fairly optimistic that it will be achieved."

Adaptation is needed on both sides: Americans have to learn that not every crisis is caused by ill will and that there is a difference between educating people and learning to cooperate with them.

China, which has not had the experience of being in a relationship of balance as it has historically been the dominant country in the region, will have to recognise there is now a balance of power.

Dr Kissinger is among 400 business and government leaders who have gathered in Singapore for the first Bloomberg New Economy Forum, hosted by media mogul and former New York mayor Michael Bloomberg.



ON CHINA-US RELATIONS

Dr Henry Kissinger spoke to Bloomberg editor-in-chief John Micklethwait at the Bloomberg New Economy Forum in Singapore yesterday. Here are some excerpts:

Mr Micklethwait: So you see this rapidity of the way in which China has evolved is in some sense the cause of some of the current tensions?

Dr Kissinger: China has become a substantially new player that can compete with the United States in varied fields, and so we are bound to step on each other's toes around the world. The challenge is to maintain a fundamentally cooperative relationship amid inherent differences of approach produced in large part by the changing technology and in some part due to the different philosophical approaches to challenges between the United States and China.


Q: Where do you see the common objectives? You talked a bit earlier about different philosophies. Maybe you can talk about where you see the commonalities and where are the differences.

A: One inherent problem is that Americans, on the whole, think that if there is a problem, there's a short-term solution and deal with it. The Chinese, on the other hand, think that the problems are never completely solved and that every solution is an admissions ticket to a new set of problems.

So once one grants there's difference in perspective, I think if the world order becomes defined by continuous conflict between the United States and China, sooner or later it runs the risk of getting out of control, which was the history of how World War I broke out in Europe. And so some disagreements are inevitable. But the objective needs to be that both countries recognise that a fundamental conflict between them will destroy hope for a world order and run to great risk of conflict. And I think that objective can be achieved, and I am in fact fairly optimistic that it will be achieved.


Q: Do you think the Chinese understand the world order that you described in your last book, that there is an idea, that there is a necessity of having some degree of balance in the way the world is run?

A: The Chinese have not had to experience a relationship of balance with others since they've been through most of their history the dominant country in the region. But it is one of the challenges of their adjustments to recognise that... The evolution cannot be forced, it needs to be understood. I think both sides will have to learn adaptations of their history.


Q: Which adaptation of their history do the Americans need to learn?

A: The Americans have to learn that not every crisis is caused by ill will, and also that there is a difference between educating people and learning to cooperate with them.














Jobs and healthcare expenses among most pressing problems of the future, says DPM Tharman
Global leaders call for reforms in healthcare and pension systems
By Yasmine Yahya, Senior Political Correspondent, The Straits Times, 8 Nov 2018

Young people are frightened of the future because they are unsure about jobs and worried that they will have to foot the healthcare bill of the elderly, Deputy Prime Minister Tharman Shanmugaratnam said yesterday.

These uncertainties are among the most pressing problems facing the world, but there is a lack of political will today to tackle these issues, he said during a panel discussion on 2019 global outlook.

Fellow panellists Christine Lagarde, managing director of the International Monetary Fund (IMF), and former New York mayor Michael Bloomberg also pointed out that as countries face technological disruption, it is critical for governments to ensure that people have the skills to take on the jobs of the future.

It is also important that advanced economies, whose demographics are rapidly ageing, reform their pensions and healthcare financing systems to ensure today's young people do not end up being over-burdened by the taxes needed to fund healthcare in the future, the three global leaders added at the inaugural Bloomberg New Economy Forum, held at the Capella Singapore.



Mr Tharman said that "across the advanced world, the very broad middle of society is seeing very little improvement in their lives".

And young people worry that "there is no sustainable solution today for pensions and healthcare financing and they are going to have to foot the bill".

Citing Germany, he said that in less than 20 years, there will be one working adult for every retiree and the worker will have to contribute about half of his monthly salary into the pensions and healthcare financing system.

"The (average worker) does not know it yet, but the arithmetic is very clear," he added.

The fact that this issue is "not part of the political narrative today" is even more worrying, he said, because it means the world faces a major threat down the road when these problems become bigger.

"It will change when things get much worse - that's unfortunately the way things work," Mr Tharman said.



Mr Bloomberg, founder of Bloomberg LP, the parent firm of Bloomberg Media Group which organised the forum, agreed, saying one of the greatest challenges of the future is ensuring meaningful jobs for people in the face of technological disruption.

Technology has made life better for many, but it has also displaced many workers from their jobs, he said. "The great challenge is not income inequality - all you have to do is tax the rich and give the money to the poor - it's how do you create jobs for people who want the dignity of coming home and saying, 'I contributed something'," he said.

Ms Lagarde noted this is a pressing issue, as there will be about 40 million young people entering the workforce in the next 10 years.

While there will not be an overall reduction in the number of jobs, there will be a transition period for people whose skills become obsolete, she said. The answer, she added, is preparing students and working adults through education. "It does not necessarily mean computer coding. We will need skills that are diverse and varied."

Mr Tharman agreed, adding: "In this new game, we need a lot more collaboration, industry by industry, working with social partners or unions and working with the government, especially local governments."



The three panellists also gave their views on the trade war being waged by the United States against some of its major trading partners, especially China. The US-China trade war would likely be the biggest news story in the coming year, said 68 per cent of the audience, who were polled at the start of the panel discussion.

Mr Tharman said: "The biggest problem on my mind is the difficulties that are underpinning the trade war, which make it more likely that we'll continue to see trade frictions for a long time.'' These are the domestic difficulties confronting the countries involved, he added.

Mr Bloomberg believed that eventually, the US and China "will get back to some normal kind of trade, but with a bit more acrimony".

Ms Lagarde said the trade war may get worse before it gets better. Her reason is that the usual channels world leaders typically use to resolve such disputes cannot be used today. These channels, she added, "are not conducive to the show that is designed by (US President Donald) Trump".

















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