Introduction:

Lee Kuan Yew, Singapore’s founding father and an elder statesman, offers his insights on global geopolitics, with a focus on China’s rise and its implications. He is in the U.S. for meetings with significant global players and will also receive a Lifetime Achievement Award from the U.S.-ASEAN Business Council.

Changing World Order:

Lee Kuan Yew suggests that despite issues like the Iraq and Afghanistan wars, the more significant global changes come from the rise of China and, to a lesser extent, India. Both countries are reclaiming their historical places of economic prominence. In the coming decades, China is expected to have a total economy bigger than the USA, thereby wielding significant political and strategic influence.

Shift of Dominance:

He acknowledges a transition from a world order dominated by Caucasian populations to one that must make room for China and India. Lee Kuan Yew predicts that while the first half of the 21st century will largely be under American influence, the latter half will require the U.S. to share top spots with China and India.

U.S.-China Relations:

Lee describes the U.S.-China relationship as the most crucial global geopolitical issue of the century. He sees China handling the relationship pragmatically and notes American vacillation in its stance toward China—from seeing it as a strategic adversary to a stakeholder.

Stakeholder Concept:

He clarifies the concept of “stakeholder,” initially confusing for the Chinese. He explains it means having an interest in another entity, even if not directly invested. Both China and the U.S. have a vested interest in each other’s continued economic well-being.

Cultural Habits and Economies:

Lee touches upon the deeply ingrained saving habits among the Chinese, driven by a long history of catastrophes and an unreliable central government. He believes these habits will take generations to change. Conversely, America’s resilience and creativity are enhanced by its ability to attract and integrate talents from around the world, a factor he considers special and advantageous for the U.S.

Conclusion:

Lee Kuan Yew offers a detailed and insightful view of the changing global landscape, focusing on the rise of China and its implications for the world order. His observations span from geopolitical shifts to cultural tendencies, providing a comprehensive look at the complexities of international relationships.

China’s Growth Prospects:

Lee Kuan Yew disputes the notion that China will reach its full economic and technological strength within the next three decades. He estimates that it would take China more than a hundred years to match America’s standard of living and technological advancement. He points out that even in three decades, China’s per capita GDP would still be around one-third of America’s.

U.S. Foreign Policy Suggestions:

Lee suggests that the U.S. should make China feel that it’s “accepted at the top table.” The idea is to offer China a seat at the top table of global powers, but on the condition that it abides by established international rules. Lee contends that China is well aware it can’t compete with the U.S., particularly in terms of military technology.

China’s Global Dependencies:

Lee notes that for the first time, China’s growth is dependent on global resources like oil and minerals. China is actively signing contracts around the world, particularly in places like Iran and Africa, to secure these resources. This indicates a shift in China’s growth model that now requires it to be more concerned about global geopolitics.

Domestic Economic Drivers:

China is currently focusing on domestic infrastructure projects to keep its economy growing. These projects include high-speed roads, railways, airports, and even gigantic water transfer projects. This is partly to create the domestic demand necessary for growth as exports reduce.

Comparison with India:

When asked about India’s advantages over China due to its democratic system, Lee states that India’s diversity and lack of organization are setbacks. He mentions India’s multiple languages and ethnicities as factors that impede its growth compared to China.

Impact of Urbanization and Technology:

Lee believes that as China becomes increasingly urbanized, the political system in Beijing will have to adapt. Urban centers enable faster dissemination of information, and with planned megacities housing billions, the Chinese government will have to pay more attention to public opinion.

Role of Communication Technology:

Modern communication tools have already started to impact governance in China. Events like the Sichuan earthquake became instantly known due to SMS and the internet, forcing the government to be more transparent and responsive.

Each of these points provides an insightful look into the complexities and nuances of the evolving geopolitical landscape, especially concerning U.S.-China relations and China’s role on the global stage.

Control Over the Population:

Lee Kuan Yew argues that the Chinese government’s concern is not fear but control. He explains that in Mao’s era, the state was the only employer and controlled residence through a permit system called ‘hukou’. Losing this would be devastating for an individual. Today, the multiple employers give people options, reducing the government’s control.

Political Participation:

Lee notes that while China may not be moving toward a Western style of governance, they are incorporating successful individuals into the Communist system. This policy, termed ‘the three representatives’ by Jiang Zemin, allows artists, businessmen, and activists to contribute to a ‘greater China’.

Global Coalitions and Sanctions:

On the issue of forming global coalitions and sanctions against Iran, Lee discusses China’s pragmatic approach. China needs Iran’s oil and gas, as do other nations. He suggests that China would likely follow Russia if it decided to engage in sanctions against Iran, as China wouldn’t want to be the ‘odd man out’.

Energy Dependency:

Lee highlights that China needs oil from multiple sources worldwide to fuel its economic growth. When asked about the possibility of the U.S. finding another energy partner in place of Iran, Lee was skeptical. He asserts that China’s demand for energy is so vast that it would need oil from all available sources, including Iran, to sustain its 8% economic growth rate.

This dialogue provides crucial insights into the complexities of China’s political and economic system and their impact on global politics.

Russia’s Challenges:

Lee Kuan Yew remarks that Russia’s system needs fixing for the country to prosper. Governance has weakened, causing control over various provinces to diminish. Vladimir Putin’s attempts to centralize control are complex and difficult.

Putin-Medvedev Relationship:

According to Lee, the bond between Putin and Dmitry Medvedev is strong, characterizing Medvedev as a loyal friend to Putin. Medvedev operates through powerful men connected to Russia’s Federal Security Service (FSB), formerly the KGB.

Russian Capabilities:

Lee notes that Russia’s capabilities are somewhat limited despite its significant nuclear arsenal. The military is different from its former self, and societal issues like a declining population and pervasive pessimism hinder growth.

Japan’s Demographic Crisis:

Lee expresses concern about Japan’s unwillingness to accept immigrants despite a declining birth rate. The low fertility rate coupled with anti-immigrant sentiment will strain the country’s social support systems in the future.

Immigration and National Strength:

In discussing the United States, Lee stresses the importance of attracting highly intelligent and hardworking immigrants for national growth.

China’s Ambitions:

Lee observes that China’s priority is its internal economic development. Although China aspires to be a world leader, it understands that the global landscape has multiple dominant poles, making it unlikely to seek conflict, especially with the United States.

Future Multipolar World:

Lee believes we are heading toward a multipolar world with multiple dominant countries, including China, the United States, and India. This is contrasted against the bipolar Cold War era involving only the U.S. and the Soviet Union.

European Unity:

According to Lee, Europe faces significant barriers to political and strategic unity, despite being an economic force. Language and national identities are significant roadblocks to a united European foreign policy.

In summary, Lee Kuan Yew offers a comprehensive view on various geopolitical landscapes, highlighting the internal and external challenges faced by countries like Russia and Japan, as well as commenting on broader international dynamics involving China, the United States, and Europe.

Importance of Relevance:

Lee Kuan Yew emphasizes that for Singapore to continue existing, it must maintain its relevance on the world stage. The city-state needs to be a place that attracts investment and proves useful to the global community.

Adaptability and Change:

He stresses the importance of adaptability in staying relevant. The world is constantly changing, influenced by shifts in geopolitics and economics. To stay ahead, Singapore must “ride the surf” of these changes, adjusting its strategies and policies accordingly.

Diplomatic Neutrality:

When questioned about choosing sides among major powers like the U.S., China, and India, Lee Kuan Yew firmly states that Singapore refuses to do so. This diplomatic neutrality allows Singapore to maintain its relationships with various influential countries.

Investment Decisions:

Regarding the sovereign wealth fund’s $1.3 billion in new investments in countries like China, India, and Brazil but not the U.S., Lee Kuan Yew notes that the U.S. is currently economically unstable. He mentions concerns about the dollar’s potential decline and the Federal Reserve’s ability to manage liquidity, explaining the investment choices.

This segment reveals how Singapore aims to secure its future by being adaptable, diplomatically neutral, and judicious in its economic partnerships.

Investment Diversification:

Lee Kuan Yew discusses the hedging strategy Singapore employs for investments, stating that the U.S. economy is currently unstable. He reveals that the country diversifies its investments by looking to the euro and minimizing exposure to highly controlled currencies like the Chinese Yuan.

Mindset Shift in U.S. and China:

Lee points out that both the United States and China need to change their mindsets towards each other. For the Americans, there’s a need to understand the historical context that shapes current Chinese attitudes. He mentions that future Chinese leaders will have international exposure and different outlooks.

Globalization and China:

Lee delves into how China’s engagement with the global market has evolved, from historical self-sufficiency to current dependency on global resources and markets for growth. He highlights how China’s membership in the World Trade Organization (WTO) has made it imperative for the country to adhere to international rules.

Intellectual Property and Rule of Law:

Discussing Singapore’s involvement in life sciences and stem cell research, Lee asserts that the country offers transparency, copyright protection, and rule of law. These are attributes that attract major pharmaceutical companies to Singapore but deter them from setting up in China, which has a dual legal system.

Technology as Global Leverage:

Lee acknowledges the role of technology and science in determining a country’s global standing. He maintains his confidence that the U.S. will continue to be an inventor and creator of new products, securing its position on the world stage.

This segment paints a complex picture of international relations, covering how diversification, mindset changes, and adherence to global rules influence nations’ relevance and power.

On Afghanistan:

Lee Kuan Yew argues that attempts to create a cohesive nation-state in Afghanistan are a “distraction,” given the country’s recent history of internal strife. Rather than imposing a western framework, he suggests that the United States succeeded in its initial objectives by supporting local groups like the Northern Alliance.

US Role in World Affairs:

Lee Kuan Yew posits that the United States serves as a “benign stabilizer” in global politics. He cites the U.S.’s role in East Asia as a case in point, mentioning how American involvement fostered peace, technology, trade, and investment.

The Limitations of Power:

Despite America’s capacity to effect change, Lee notes that not all global problems are solvable by the U.S. He suggests that each country has its own set of problems to deal with, and it’s not always America’s responsibility to intervene.

China and Global Membership:

Lee emphasizes that while China is now a member of the World Trade Organization, it needs to understand that membership comes with obligations and responsibilities. He asserts that China must be treated fairly while fulfilling its roles within the international community.

Leadership and Adaptability:

The conversation concludes with a discussion about Deng Xiaoping, whom Lee highly admires. Deng, he recounts, visited Singapore and adapted its capitalist practices to fuel China’s economic development. His ability to deviate from the Communist Party’s traditional stances showcased the kind of flexible leadership Lee deems crucial in a rapidly changing world.

Authoritarianism and Public Support in Singapore:

Lee Kuan Yew emphasizes that his governance aimed at providing a decent life and education for the citizens of Singapore. He rejects the notion that Singapore’s system is overly authoritative, stating he had the consent and support of the population for his policies.

On President Obama’s Leadership:

Lee praises Obama as an eloquent and capable leader. He is particularly impressed by Obama’s willingness to appoint people with different viewpoints in key roles, exemplified by his economic team including both Larry Summers and Paul Volcker.

21st Century Geopolitics:

Lee argues that the 21st century will be a contest for supremacy in the Pacific. He states that maintaining a strong presence in the Pacific is crucial for any world leader, emphasizing the importance of fiscal responsibility in this regard.

U.S. Fiscal Deficit and Global Leadership:

Lee expresses concern over the U.S. fiscal deficit. He warns that a loss of confidence in the U.S. dollar could lead to significant problems, not just for the U.S. but for global stability. He notes that solving this issue is a balance, as acting too hastily could induce a recession.

America’s Global Reputation:

According to Lee, America’s global reputation didn’t necessarily decline due to its military actions in Afghanistan and Iraq but rather due to its ‘go it alone’ attitude. He credits President Obama for making strides in improving this perception but stresses that actions must follow words.

Economic Comparison: U.S. and China:

Lee asserts that the American economy is still fundamentally stronger than China’s, primarily due to the difference in their economic bases. However, he notes that effective leadership is essential for the U.S. to maintain this position.

Political Will for Tough Measures:

Lee underscores that the willingness of U.S. leaders to take tough measures to correct economic imbalances is critical for maintaining global confidence in America. He indicates that both Congress and the President need to show resolve in facing economic challenges.

Reflections on Changing Worldviews:

While the conversation touched upon various topics, the transcript ends on a contemplative note, with the speaker pondering what significant changes have occurred in his worldview over the past 20 years, although this question remains unanswered.

Unforeseen Changes:

Lee Kuan Yew opens by discussing the unpredictable nature of global events, citing the surprising collapse of the Soviet Union and China’s unexpected shift from communism to a free-market system. These shifts were unimaginable two decades ago, proving that significant change is always possible, albeit uncertain in timing.

Shift of Global Center:

Lee argues that the “center of gravity” in global affairs is shifting towards Asia due to its large population. The human capital in Asia—comprising not just China, but also Japan, Korea, Vietnam, and others—can rival that of Europe and America. This talent pool was once “inert,” lacking focus on science and technology, but that has changed.

Asia’s Pursuit of Technology:

Asian countries are now actively involved in fields like stem cell research to catch up with the West. Tiny nations like Singapore are entering fields where they can be competitive. China, though currently behind, is investing heavily in technology, with an ambition and curiosity to catch up.

China’s Cultural Confidence:

Lee notes that China is not interested in becoming an “honorary member of the West” like Russia. The Chinese are proud of their 5,000-year history and have an innate confidence in their civilizational legacy. They are eager to take their place in the world, and they don’t necessarily need encouragement from the West to do so.

Responsibility Comes with Power:

Lee suggests that as China and Asia rise, they also need to understand that with power comes responsibility. This involves taking care of global issues like poverty and disease, not just extracting resources like copper and gold. Lee observes that China is beginning to recognize this responsibility.

This segment of Lee Kuan Yew’s longer presentation provides a detailed look into the shifting dynamics of global power, with Asia, particularly China, emerging as a key player. Lee’s insights serve as a reminder of the complexities and responsibilities that come with this shift.