China’s Economic Outlook:
Prime Minister Lee Hsien Loong expressed optimism about China’s long-term economic prospects despite potential short-term challenges. He believes China’s rapid urbanization and infrastructure needs will sustain economic growth. He acknowledged the government’s efforts to shift from an export-oriented model to one driven by domestic consumption but noted that more needs to be done in areas such as social safety nets and state-owned enterprise restructuring.

China’s Political Leadership:
Lee described the next generation of Chinese leaders as “capable” but cautious and collective. He expects them to address long-standing economic and political issues acknowledged by the current leadership, such as corruption, moral lassitude, and disconnect from the people. Lee emphasized the importance of continuity and a long-term approach to addressing China’s challenges.

US Engagement in the Asia-Pacific:
Lee welcomed America’s renewed interest in the Asia-Pacific region and its positive influence on peace, stability, and prosperity. He emphasized the need for sustained engagement over time and across administrations, rather than sporadic attention. He expressed appreciation for President Obama and Secretary Clinton’s efforts to prioritize Asia on their agenda.

Singapore’s Role in US-China Relations:
Lee clarified that Singapore hosts US facilities and allows American ships and aircraft to use its facilities, but it does not have a naval base. He explained that a naval base in Singapore would be impractical due to its limited size.

Chinese Reaction to US-ASEAN Engagement:
Lee described China’s official position as welcoming more members to the East Asia Summit, including the US, Russia, and Europe. However, he acknowledged private concerns among Chinese officials about potential US efforts to hinder China’s prosperity. He highlighted the importance of cooperation and watchfulness on both sides to manage the US-China relationship.

Barack Obama’s Foreign Policy:
Lee praised Obama’s attention to the Asia-Pacific region and his constructive approach to managing the US relationship with China. He viewed the absence of major conflicts despite tensions as a positive outcome.

Global Protectionism:
Lee expressed concern about the rise of protectionism, particularly in the US, due to uncertainties caused by globalization and job insecurity. He noted the challenges faced by workers in advanced economies as industries move offshore and job creation slows.

Free Trade Challenges:
Prime Minister Lee Hsien Loong expresses concerns about the challenges facing the Doha Round of trade negotiations at the World Trade Organization (WTO) due to underlying sentiments and constraints within the US administration. He acknowledges the significance of the Trans-Pacific Partnership (TPP) as the administration’s key trade initiative and hopes for a constructive outcome.

Singapore’s Economic Resilience:
PM Lee expects Asia to continue growing and prospering, despite potential ups and downs, driven by the momentum of countries like China, India, and Southeast Asia. Singapore’s primary concern is not about global prosperity but about the impact of global fluctuations on a small nation like Singapore, which has limited room to maneuver. He emphasizes the need for Singapore to remain agile and adaptable to avoid being overwhelmed by economic headwinds.

Singapore’s Approach to Investment Incentives:
PM Lee highlights Singapore’s cautious approach to providing investment incentives to companies considering offshore locations. He emphasizes that Singapore is willing to offer tax forgiveness but not direct financial grants or subsidies, as these investments should generate economic value for the country. He acknowledges that some desirable projects have gone elsewhere due to Singapore’s limited generosity, but he believes this approach is necessary to avoid excessive financial concessions.

Advice for President Obama on Reviving Manufacturing:
PM Lee suggests that the United States should avoid adopting a nationally planned industrial policy, as seen in some Asian countries. He believes that the US should focus on developing a comprehensive strategy that includes education, skills training, and infrastructure investment to enhance its overall competitiveness.

Preconditions for Industrial Development:
Invest in education, infrastructure, and a supportive financial system. Maintain a clean and efficient government. Foster a forward-looking approach to anticipate and address challenges. Cultivate a hardworking, well-trained, and disciplined workforce. Promote unions that collaborate with employers for mutual benefit.

Addressing Inequality in Singapore:
Ensure everyone receives a high-quality education, providing equal opportunities for upward mobility. Implement public housing programs and subsidies for healthcare and education to provide a foundation for all citizens. Encourage individuals to continuously upgrade their skills and adapt to changing economic demands. Strive for social equality and redistribution without fostering dependency on the state. Introduce schemes like workfare programs to supplement low incomes and encourage employment.

Factors Affecting Singapore’s Recent Elections:
Slower economic growth and increased inequality caused unease among some segments of the population. Rapid social changes and global dissatisfaction with the status quo influenced voting patterns. The influence of social media and interconnectedness with global movements played a role.

Expectations for Political Reform:
Singapore is navigating a changing landscape and must find its unique path forward. There is a need for greater openness, engagement, and attention to societal issues. Both the government and citizens must make efforts to address these challenges. Governance must adapt to evolving circumstances, striking a balance between openness and effective leadership.

China’s Changing Political System:
Lee Hsien Loong believes that China’s political system has undergone significant changes in the past 20 years, leading to a different landscape today compared to two decades ago. He emphasizes the evolution of people’s thinking, access to information, and the increased influence of interest groups in decision-making. Loong also highlights the increased exposure to travel and awareness of global events among the Chinese population.

China’s Role in Asia:
Loong raises the question of whether China will be accepted as the dominant power in Asia, given its recent actions in the South China Sea that have drawn strong reactions from other countries in the region. He believes that superpowers and big countries must be viewed with cautious respect by smaller nations, but he cites the United States’ long-standing presence in the Pacific as a positive example of a benign superpower. Loong suggests that China should strive to emulate the United States’ approach in maintaining a welcoming and non-threatening posture.

Internal and External Priorities:
Loong believes that the older generation of Chinese leaders who experienced war and cultural revolution understand the importance of maintaining internal stability and avoiding external conflicts. He expresses concern about the younger generation, who have grown up during China’s prosperous and rapidly developing era, and whether they will maintain the same balance and perspective as their predecessors.

Lee Hsien Loong’s Legacy and Leadership Style:
* Lee Hsien Loong reflects on growing up as the son of Singapore’s founding Prime Minister, Lee Kuan Yew.
* He acknowledges the challenges of following in his father’s footsteps but emphasizes the importance of finding his own path.
* Lee Hsien Loong describes his father as a strict but fair disciplinarian who allowed him to make his own choices.

Political Aspirations of Lee Hsien Loong’s Children:
* Lee Hsien Loong believes that his children will likely not pursue political careers due to the changing landscape of opportunities in Singapore and globally.
* He acknowledges that the current generation has a wide range of options and may be attracted to careers outside of politics.

Singapore’s Talent Drain and Competition for Skilled Workers:
* Lee Hsien Loong expresses concern about Singapore’s ability to retain talent in the face of global competition.
* He highlights the attractive opportunities available to talented individuals in places like Wall Street, Silicon Valley, and start-ups.
* Lee Hsien Loong emphasizes the need to ensure that enough talented Singaporeans choose to stay in Singapore and contribute to the country’s success.

Lee Hsien Loong’s Expectations for His Children:
* Lee Hsien Loong believes that his children should find their own paths in life and make their own choices.
* He acknowledges that he still has high expectations for his children but understands the importance of allowing them to pursue their own interests and aspirations.