Speech by Prime Minister Lee Hsien Loong at Gala Dinner hosted by US Chamber of Commerce and US-ASEAN Business Council

The Honourable Rebecca Blank
Deputy Secretary of Commerce

Mr Tom Donohue
President and CEO of the US Chamber of Commerce

Mr Alex Feldman
President of the US-ASEAN Business Council

Distinguished guests, ladies and gentlemen

1.     Thank you Secretary Blank for your kind introduction and for taking time out of your busy schedule to be here. Your work at the Commerce Department has been so important in strengthening the business links between our countries. I also thank the US Chamber of Commerce and the US-ASEAN Business Council (USABC) for hosting this dinner. Both are old friends of ASEAN and Singapore. You have contributed to our development, and help anchor the US’s longstanding presence in the region.

INTRODUCTION

2.     I am delighted to be back in Washington. Much has changed since my last visit in 2010 for the 1st Nuclear Security Summit. President Obama is now in his second term, and has assembled a new team. The first Obama Administration strengthened the US’s engagement with Asia. It was called a “pivot”, although the US has been in Asia since the Second World War. The President and his officials visited Asia many times. In fact, the President’s first trip after re-election was to Southeast Asia. Next month, we look forward to welcoming Secretary of Defense Chuck Hagel to the 12th Shangri-La Dialogue in Singapore. We also join our ASEAN friends in welcoming Secretary of State John Kerry to the region in June.

3.     The US has maintained stable relations with China and developed its ties with ASEAN. US-Singapore relations have also strengthened under President Obama. I had a good meeting with President Obama earlier today. I expect President Obama and his new team will sustain this engagement in his second term.

DEVELOPMENTS IN WORLD

4.     The last six years have also seen major changes in the world. The Global Financial Crisis was a big shock. Technology and social media are fundamentally transforming societies, as we saw during the Arab Spring. Fortunately, Asia weathered the Crisis relatively unscathed. Individual countries are prospering, while the region is integrating further.

China

5.     China has been a big part of the Asia story. Its GDP has more than doubled in US$ terms since 2007, and it is now the world’s second largest economy. More significantly, China has integrated smoothly into the international system, considering how large its impact has been.

6.     China has just completed its leadership transition. Its new leaders are focused on domestic priorities, such as income inequality and corruption. Pollution is a growing issue, especially in Beijing. According to a recent Wall Street Journal article, Beijingers joke that they can open their windows and get a free smoke!

7.     China’s leaders know change is necessary, and that it will not be easy. President Xi said that China must have courage to implement its reforms, and dare to “gnaw a hard bone and wade through a dangerous shoal” (“敢于啃硬骨头，敢于涉险滩”). In the economic domain, the PRC State Council has worked with the World Bank to develop ideas to transform China into a “modern, harmonious and creative high-income society” by 2030 . These include liberalising its markets, strengthening safety nets and integrating more with the global economy. However, no such roadmap exists for China’s political and social evolution. China’s leaders are learning from other countries. Having carefully studied the former Soviet Union under Gorbachev, they are cautious about political reform. They want to understand how Singapore balances our economic and social goals.

US-China Relations

8.     China’s most important external relationship is with the US. As President Xi recently told Treasury Secretary Lew, the US and China have “numerous shared interests”. I am therefore glad that US-China ties have remained stable, though there are significant issues to manage. The US considers cyber-security as an important issue not just for its companies, but also from a national security perspective; whereas China denies that it is responsible and resents the presumption that it is to blame. Internationally, your interests on some global and regional issues will diverge, but there is broad convergence in many areas.

9.     A difficult regional issue is the territorial and maritime disputes in Asia, between China and Japan (the Diaoyu/Senkaku islands), and between China and several ASEAN members (in the South China Sea). We in ASEAN have urged restraint by all parties, and have encouraged claimant states to resolve their disputes peacefully and in accordance with international law, including UNCLOS. We should seek to prevent any miscalculation or mishap which will set the region back for many years. This is also in the US’s interests because though the US is not party to these disputes, it nevertheless shares a fundamental interest in freedom of navigation and maintaining regional peace and stability.

10.     I am glad that US and Chinese leaders have committed to maintaining strong and mutually beneficial US-China ties. I believe there is enough common ground for the US and China to accommodate each other. However, the two countries need to build strategic trust in each other. The US, as the incumbent superpower which will remain dominant for decades to come, naturally has interests to protect. China’s development represents a major shift in the balance of power. China understands that its success depends on a stable international environment. It wants its rightful place in the sun, and will be wary of any perceived attempt to conscribe its freedom of action. Each side will be watching the actions and reading the motives of the other, and reacting to them. China and the US have to strengthen mutual confidence, in order to manage this shift in the global balance wisely and prudently.

Southeast Asia

11.     In Singapore’s own corner of the world, Southeast Asia is progressing steadily. Southeast Asia avoided the worst of the Crisis because many countries had restructured their economies after the Asian Financial Crisis a decade earlier. Today, ASEAN’s members are growing steadily. Collectively, we have a population larger than Europe’s, and a GDP larger than India’s or Russia’s. We are forging closer economic, socio-cultural and political ties, and making progress towards an ASEAN Economic Community by 2015. For a while we even considered fielding a combined soccer World Cup team!

12.     Singapore benefits from a stable and prosperous Southeast Asia. We enjoy good relations with our neighbours. We are cooperating with Malaysia on Iskandar Malaysia – a special development zone in Southern Malaysia that is larger than Singapore. Iskandar and Singapore can be like New Jersey and Manhattan. We are also planning a High-Speed Rail link from Kuala Lumpur to Singapore, which are as close together as DC and New York. Our relations with Indonesia are similarly warm. Singapore is Indonesia’s largest foreign investor, despite our small size, while Indonesia is our biggest source of tourists.

13.     Elections are coming up in both countries. Malaysia’s elections are likely to be held within a few months. In Indonesia, President Yudhoyono will step down at the end of his term next year but there is no frontrunner to replace him yet. Singapore hopes for continuity and stability in Indonesia and Malaysia so that we can grow and prosper together.

14.     Beyond Singapore’s immediate neighbours, one of the encouraging developments in Southeast Asia is the ongoing political and economic changes in Myanmar. After a long difficult period, Myanmar is now going through delayed but essential reforms, and opening up to the world. Aung San Suu Kyi is participating fully in the democratic process. But Myanmar is a complex society whose problems cannot be solved immediately or by the process of elections alone. One such challenge is managing tensions between its 135 official ethnic groups, as the current conflict between the Buddhists and Muslims in Meiktila show. The country also needs assistance in areas where it has major capability gaps, such as public administration, rule of law, and basic infrastructure, to deal with its challenges.

ASEAN’s Relations with US and China

15.     Amid these changes, ASEAN remains committed not only to pursuing closer regional integration, but also to cultivating its ties with external partners. We expanded the East Asia Summit to include the US and Russia. We are also improving on our “ASEAN+1” FTAs with Australia, China, India, Japan, Korea and New Zealand by negotiating a Regional Comprehensive Economic Partnership (RCEP) that will comprise almost half the world’s population and about a third of global GDP.

16.     ASEAN is also keen to develop its ties with the US. On Singapore’s part, we are helping the US develop its ties with our ASEAN neighbours through the Singapore-US Third Country Training Programme. The US’s longstanding presence in Southeast Asia has contributed to the security of our region, and enabled countries to prosper in peace. You also wield soft power in Southeast Asia and beyond. Many Asian students aspire to attend US universities. American culture remains popular, be it TV shows like Glee or pop stars like Lady Gaga. Occasionally the influence goes the other way, such as with “Gangnam Style”, but “Harlem Shake” reflects the dominant trend.

17.     ASEAN and the US celebrated our 35th anniversary of dialogue partnership last year. During the US-ASEAN Leaders’ Summit in Phnom Penh, we agreed to elevate our relationship to a Strategic Partnership by 2015. We also welcomed the US’s Expanded Economic Engagement (E3) Initiative to promote economic links between the US and ASEAN, which have grown, but more slowly than each side’s economic partnerships with other countries. Over the last decade, China has become the top trading partner of almost all Southeast Asian nations, including US allies such as the Philippines and Thailand.

18.     The US should thus adopt a more active trade agenda with ASEAN. In Asia, trade is strategy. A more active trade agenda will benefit the US economically and strategically. It reflects the US’s ethos – open, confident, competitive, and win-win – and sets a positive example for the rest of the world especially when protectionist sentiments are rising. Whether it is the executive in Bangkok tapping on her iPhone or the subway planner in Jakarta seeking infrastructural expertise, Southeast Asia is a huge market for US goods and services.

19.     An active trade agenda includes pushing the Trans-Pacific Partnership (TPP) energetically, while taking into account the constraints of TPP members. I welcome Japan’s decision to join the TPP. It is a strategic move that brings an important US ally in Northeast Asia into this important grouping. Like the RCEP, the TPP can pave the way for an eventual Asia-Pacific FTA.

20.     I know that free trade is not always a popular issue, here and elsewhere. Ordinary Americans are worried about unfair competition and “exporting jobs”. But pushing ahead with efforts to seek new overseas markets and keeping markets open is critical to the US’s long-term economic growth and employment.

21. The US is well-placed to succeed in a more open world. Yours is a creative economy with many strengths. Your place names – Silicon Valley, Madison Avenue, Hollywood – are synonymous with technology, buzz and creativity. Whether it is green technology, 3-D printing, or robotics, the leading edge of the 21st century remains in America. You have a young, growing and dynamic population, drawn from the world’s best. Add to that the current energy renaissance in America and you will see many bright spots in America’s economic future.

22.     I am therefore glad that President Obama has promised to put trade at the heart of his agenda. His Administration is pushing for Trade Promotion Authority from Congress, and intends to pursue a Transatlantic Trade and Investment Partnership with the EU. I hope that Congress will take an enlightened approach and keep US markets open to the world.

US-SINGAPORE RELATIONS

23.     Within this context, I am confident that US-Singapore relations will continue to flourish. Our partnership goes back a long way. In fact, some say that Hawaiian leis were originally made with the same orchids as our national flower!

24.     We enjoy excellent security cooperation under our Strategic Framework Agreement. The Singapore Armed Forces appreciates the opportunities to train in the US. I certainly recall my year in Fort Leavenworth fondly. Our Chinook helicopter pilots and families in Arizona feel like a part of the local community, and during Hurricane Katrina immediately volunteered to fly sorties to help with relief efforts. Singapore is happy to reciprocate the friendship. US forces are the most frequent foreign visitors to our military facilities, and we look forward to welcoming your first Littoral Combat Ship shortly.

25.     We also have excellent partnerships in education, such as the Yale-National University of Singapore College and the Singapore-MIT Alliance for Research and Technology. Last year, Singapore and the US signed an MOU to enhance education collaboration. Some US schools are even trying out Singapore maths textbooks, including Sidwell Friends School here in Washington. I understand that we had to change the references in the textbooks from counting durians to counting grapefruit!

26.     Our economic relations are robust, with many new opportunities emerging. The US-Singapore Free Trade Agreement (USSFTA) was the US’s first FTA in Asia, and has supported the business engagement for nearly a decade. US investments in Singapore have continued to develop with our economy, and today, help to broaden the reach of US companies into Asian markets and to Asian communities. For example, Procter and Gamble established its regional consumer insights and design team in Singapore, which helps it not only customise their existing products, but also innovate new ones specifically for the Asian market. Maintaining the economic relationship with the US is crucial, especially as Singapore transforms our economy.

27.     Singapore is entering a new phase. We are transitioning from rapid expansion to slower, qualitative transformation and upgrading. We are encountering and tackling demographic challenges – encouraging Singaporeans to have more babies, helping our elderly age with peace of mind, and integrating new arrivals. We are striking a new balance between our economic and social goals. This transition is challenging, but inevitable for a maturing economy.

28.     I want to assure everyone here that Singapore remains open for business. We are focussed on growing a vibrant economy, to generate opportunities for Singaporeans. We continue to welcome talent and investments, while being mindful of our physical and social constraints. We will maintain a pro-business environment which helps companies succeed in Singapore. We may not be the cheapest place to do business, but we promise efficiency, predictability and high standards of excellence. I am confident that Singapore and US companies can seize the many opportunities in dynamic Asia and prosper together.

CONCLUSION

29.     The future is bright. I believe that the US will overcome your present challenges and prove once again your dynamism and resilience to the world. Asia is developing rapidly and will offer many opportunities to the bold and enterprising. Singapore, in the middle of this dynamic region, can play a useful role connecting the US and Asia. By working together, I am confident that we can build a better tomorrow for ourselves, our companies and our people.

30.     I thank the US Chamber of Commerce and the US-ASEAN Business Council once again for your generous hospitality, and look forward to continue working with both of you for many more years of peace and prosperity.

31.     Thank you very much.