PM Lee Hsien Loong's interview with Caijing Magazine (Sep 2016)

Caijing Magazine: Since 1999, G20 has had the objective of achieving cooperation and coordination by global governance. What do you think are the big challenges for global governance that should be discussed at the Hangzhou Summit? Are there any particular achievements you would like to see.

PM Lee Hsien Loong: I think the Chinese government has chosen a very suitable topic for the Hangzhou Summit, which is the blueprint for innovative growth. And the way they have defined it is talking about structural changes within economies, talking about innovation and talking about the digital economy. I think these are opportunities and issues which face many countries, China included. And it is an area that we can cooperate and work together. They have chosen a good subject. They have also talked about inclusive and interconnected growth. That resonates with us because the G20 does not include all the countries in the world but it influences the global economy, which concerns all the countries in the world. And so, it is important that it reflects the concerns and perspectives of more than just the formal membership of the G20. And Singapore is very happy to be participating as a guest and representing the 3G Group, the Global Governance Group, which consists of 30 small countries at the UN. We work together, and Singapore hopes that at the meeting, we will be able to say something which is relevant to this group.

Caijing: On the practical level, what might be difficult is that the problem is on the global level, but the way of solving the problem is at the national level. How do we deal with this difficulty?

PM Lee: The challenges are similar, but as you say, each country has to tackle it in its own way. The big challenge which we all face is disruption. Things are changing very fast and existing ways of doing business are not working so well anymore. New ways are coming in, which offer advantages, but are going to be not easy for incumbents to adapt. Just like 滴滴快的, you have Uber in the US, and Lyft, and in China, you have got 滴滴. It is not easy for existing taxi operators and drivers. Yet it is an advantage for commuters, for riders, for the economy. And you want them. So how do we respond to disruption? We have to help the companies to upgrade and restructure themselves and restructure the economy. We have to help workers to train and retrain themselves, and be able to do their new jobs. We have to set right the regulatory environment so that it is possible for change to take place, but take place in a not-so-disruptive manner if possible. These are things which each country has to do. We have to solve our own problems, we can talk to each other and pick up ideas from one another.

Caijing: You have made a strong push for TPP ratification during your visit to the US. But as we know, Trump has gained a lot of support by opposing TPP, and even Hillary Clinton has shown an increasing reluctance to support TPP. How do you see the fate of the TPP?

PM Lee: The negotiations for the TPP have been completed, and the agreement has been signed. Now it has to be ratified, like any other agreement. Ratification is a process which all the participants have to go through. And in some countries, it is harder than the others. The other TPP participants also have to ratify the agreement. The most significant one which everyone is watching is what is going to happen in America. It is difficult to say at this stage how things will unfold. During an election campaign in America, it is very seldom popular to talk about free trade and to be in favour of free trade. We hope that after the election is over, there will be an opportunity either before January, in the lame-duck term of Congress, or after January, when the new President comes in, and he is faced with the problem and he has to decide what to do in the interests of the United States, that they will look at it coolly. TPP is a very important initiative because it is one of the paths towards free trade in the Asia Pacific. You cannot do all the Asia Pacific countries together but the TPP includes a significant number of the countries. And we hope that in time, we will grow and expand to other countries as well. In particular, China is not part of the TPP at this point. But if the TPP can be concluded and ratified, as things develop, I am sure China will be watching it, and the opportunity may yet come for China to participate as well. Korea, which is not a member of TPP, is certainly interested in participating and joining in the next phase. There are also other trade initiatives within the Asia Pacific region which we are pursuing. For example, the Regional Comprehensive Economic Partnership (RCEP), which is another trade agreement amongst Asian countries, including China, Japan, Korea, ASEAN, India and a few others. We believe that we have to work towards free trade because otherwise we will miss out on many opportunities for cooperation, and relations amongst countries will become much more difficult.

Caijing: It seems to us that Singapore is a strong advocate of ASEAN, you have mentioned that. But we see growing difficulty in reaching consensus due to differences in interests and priorities of the member states. What do you think?

PM Lee: It depends on the issues. For some issues, the interests of the member states are well-aligned and we can work together. On some issues, their interests are not so well-aligned. Different members have different perspectives and we have to agree to disagree, or we have to agree on a lowest common denominator, the basic element of what a consensus is amongst the ASEAN countries. It is like that because ASEAN comprises 10 sovereign states, so there is no mechanism by which we can say we want to do this and all countries are compelled to follow that. But I think that it is important for ASEAN to be as cohesive as possible, to be effective, and to be a significant partner which can work with China, Japan, US or the EU. And help make a contribution to the regional architecture of economic cooperation as well as security cooperation. Because if ASEAN is split and Southeast Asia becomes a region where different powers contend with each other and try to jockey and gain advantage and play one country against another, it will raise tensions in the region and it will be very bad for all the ASEAN countries. It will not be to the advantage of the powers either, because it would mean a less stable Asia and that means more trouble and less ability to work together.

Caijing: You are still very optimistic, right?

PM Lee: Well, I am laying out the difficulties, but I am setting out why it is very desirable for us to work towards a strong ASEAN.

Caijing: Can you share more about the RCEP?

PM Lee: As I have said, it is a trade agreement which is being negotiated between China, Japan, Korea, ASEAN countries, India, as well as Australia and New Zealand. It is ambitious because the countries are very diverse and the approaches to trade are not identical, so we are not yet sure how far the agreement will go and how ambitious it will be. But we think it is the right direction to go, because within the Asian economies, trade volume has grown considerably. We are trading amongst one another and of course we are trading with China. And China is the biggest trading partner for many of these countries. Therefore we can have a free trade agreement which is substantial, meaningful and it covers all of these groups. It will help towards cooperation within Asia and give confidence to all the countries that we are able to compete on a level playing field fairly and cooperate together well.

Caijing: As the US is rebalancing to Asia, China cares more about Asia, which Singapore welcomes. Do you think the US is competing with China for influence in ASEAN and how would ASEAN position itself?

PM Lee: There is always competition for influence but there are also opportunities for cooperation. Countries in Asia, Singapore, certainly, but many other countries too, are good friends to both China and America and we would like to be good friends with both. And this is easiest if both China and America are working well with one another. We are happy to see that President Xi and President Obama have been meeting regularly and discussing things at the strategic level. There are areas of cooperation, like, on climate change. The two countries have just announced that they are ratifying the Paris Agreement which is a big step forward and very good for the world. But there are also issues between China and America such as the South China Sea. We hope these are issues which can be managed and will not cloud the overall relationship.

Caijing: You just mentioned President Obama. Obama said that your father was hugely important in helping him to formulate policies to rebalance to China. What do you think was his advice to the US?

PM Lee: I am not sure exactly what Obama said, or what my father told him, but I think President Obama had his own reasons. If you look at it from the American point of view, Asia has been important to America for a very long time, since the war, which is now more than seventy years ago. America has made a significant contribution towards prosperity, towards stability, towards the security of Asia. And they continue to have a lot of stakes here. They have investments here, they have friends here, and they have interests here. So I think it is completely understandable that they would like to focus more on Asia and I think it makes sense also for the Asian countries. I see that between the two Presidents, Obama and Xi, they have said that the Pacific is big enough for both countries, America and China.

Caijing: I remember in 2012, you delivered a speech at the Central Party School. You said that China should not view the US as declining in power, but as a nation with the ability to innovate and bounce back. Are you suggesting that China’s analysis of the current US position in the world is mis-constructed? Or you expected China to have a better understanding of herself and her position?

PM Lee: I think China has a very good understanding of America, you have very able diplomats. Your leaders meet their leaders regularly, so you have a good feel of the pulse. But I was just presenting our perspective. While China is prospering, America will continue to play significant role in the world for a long time.

Caijing: I think after World War II, the US made some structures for Asia right? America never left Asia. I remember you mentioned that before.

PM Lee: Yes.

Caijing: Another question, back to the economy. As the global economy slows down, how do you see it impacting Singapore and the region?

PM Lee: We have prospered with the global economy. So if it slows down, it is negative for us. It means that we have to work harder, internally, within our country, to develop growth. But also within the region, to cooperate with one another, in order for Asia to be able to move forward. And that is why we think regional cooperation is important, and restructuring and upgrading.

Caijing: For many ASEAN countries, Singapore included, relations with China are built on close economic relations. The China economy is slowing down. How will it affect their relationship?

PM Lee: I think China’s economy is not growing as fast as before. But China is still continuing to grow and has many opportunities to transform itself. I have just been to Chongqing, came back this morning, and they are growing 10 percent a year. And Chongqing has a 30 million population. And I think there are other parts of China which are still growing rapidly, so there will be many opportunities for us to work together. But of course we hope that China will be able to achieve its economic transformation and structural changes, which you are focused on, which are very difficult to do and which will take some time. But which if you do them successfully, will enable you to improve the lives of the people for many more years to come. Which means you can maintain 5, 6 percent growth for another decade or two and that would make a big difference to it.

Caijing: What do you think of the current relationship between Singapore and China? You have just been to Chongqing. So how do you think the Government-to-Government project in Chongqing will help to deepen the relationship?

PM Lee: It is a broad and substantial relationship. We have been friends for a long time. We cooperate in many areas – economic, trade, education, culture and on political issues too. And also regionally with ASEAN. The newest initiative is the Chongqing Connectivity Initiative in Chongqing which I just went to. I visited the Party Secretary Mr Sun Zhengcai and discussed it with him. And of course with Mayor Huang Qifan, whom I have known for quite a long time. We think that it is a significant initiative because it fits in with ‘One Belt, One Road’ [Belt and Road initiative]. It fits in with your Yangtze River region development [Yangtze River Economic Belt strategy]. It fits in with your western regional development [Western Region Development strategy]. And therefore there is an alignment of interest. If we can get it off the ground, it will also strengthen economic interconnections between Singapore and Chongqing, and really between Singapore and China. But we have cooperation with China on many other projects too. Suzhou was our first big project, we have got one in Tianjin, and our companies are in many of the provinces and cities all over China. So it is a broad relationship. But we are two countries. So we see the world from our respective perspectives. We have different vital interests, and we have different national policies and priorities. Often they align with each other and therefore we are able to cooperate. Sometimes, we have different perspectives and we respect each other’s points of view.

Caijing: China cannot be more different in size and population, but for us the Singapore model is a sort of an inspiration for China. In your country, what steps have you taken to reduce income disparity? I think it is very important for China at this stage.

PM Lee: It is a very important issue for us. I think at the fundamental level, what we have done is provide for the basic things which people need, 衣食住行, which are your basic human necessities. So we have provided public housing, and helped everybody to be a homeowner in Singapore. We have provided good education, so that everybody has a chance to develop his skills and to become capable of earning a good living for himself. We have provided good public transport, because that is a basic amenity for an urban population. We have got good healthcare. So these are basic things which make sure that even if you are not rich in Singapore, you can have a good life in Singapore. But in addition to that, over the last 10 years or so, as the economic trends have developed, it has become clear in many countries that the gap between the rich and the poor has been widening. We have taken very definite measures to try to narrow the gap. In terms of our taxation policies, in terms of our incentives to lower-income workers. In fact, we have what we call a Workfare scheme, which means if you are a low income worker, and your salary is below a certain level, then when you work, your salary is topped up by the government. In cash and also in terms of social security benefits, your Central Provident Fund contributions are topped up by the government. So it is a kind of a negative income tax which helps people who work to increase their salary. We also have what we have called the Pioneer Generation Package, which is a package of medical benefits for the first generation of Singaporeans. They are old now, but they were the generation who helped to build up the country when we first became independent in the 1960s. At that time, salaries were not so high. Now, the country has prospered. So to recognise them, we developed a special package of medical benefits for this generation specifically. So that when they are old, they do not have to worry about their medical care needs. It is a big concern when people grow old. Will I be able to afford my medical, my medicines, my hospital bills and all the things which I need? These are just some of the things we are doing. I think if you look at the Gini coefficient, from what people earn and then after tax and after the government policies, the government policies have made a big difference.

Caijing: I think at this stage, China should learn a lot from Singapore. Could we talk about succession?

PM Lee: Yes.

Caijing: Have you started to think about the qualities and the qualifications of your successor?

PM Lee: We know what the qualities and the qualifications are. The question is who will best fulfil them and will he or she be able to work out together with the team and with Singaporeans. We are looking for somebody who has that judgement and that experience, and the leadership ability. Both to understand problems, analyse them, and also connect with Singaporeans and explain to people, and mobilise people to work together, to achieve our national goals. So at the same time, you are a mobiliser and a communicator. But at the same time, you also have to be a doer, an analyst, an implementer, and a team builder. It takes time, but I have a promising team of younger Ministers and I am quite sure from amongst them, one leader will emerge.

Caijing: While you prepare for the next generation of leaders in your party, what changes are you going to introduce to ensure the continued success?

PM Lee: Our policies have to adapt and evolve all the time. One of the reasons why Mr Lee Kuan Yew was able to govern Singapore for many years and then hand over successfully to a new generation is because the policies did not stay static. And the style of governing also did not stay static. In fact, the focus of who was pushing the policies also changed. So even though he was Prime Minister, until 1990, from around the mid-80s onwards, already increasingly, the policies were being set and pitched and implemented by the younger generation of leaders. So in 1990 when a new Prime Minster took over, Mr Goh Chok Tong took over from him, it was very smooth. When Mr Goh Chok Tong handed over to me, it was again similarly, we had younger people taking over, setting the tone. And when I took over there was no surprise, and no sudden jerk or crashing of gears. That is what I hope to do now – have younger Ministers and increasingly they will take the initiatives, they will make the pitch to the population and the population will get to know them. The content of the policies will also change, because it is a new generation, with new concerns, new interests, new perspectives on what the priorities are, and what is important, what is acceptable in the way of government action. If we keep on adjusting this way, then we will always be able to maintain a stable, effective government. Otherwise if the government gets older and older, and the population remains young, I think then the gap will become wider and wider. It will not work.

Caijing: You just mentioned your father. How do you compare yourself with your father?

PM Lee: I do not compare myself with him.

Caijing: What are the similarities and differences between you and your father?

PM Lee: We are living in very different ages. He lived in the age of upheaval and great tumult. And he was able to create order in Singapore, and make Singapore grow and prosper. We are now living completely in a new generation, in a stable Singapore, in a not very certain world. And our job is not to turn things upside down, or build from scratch, but to build on what we have, transform it, and make it better and more suited for tomorrow.

Caijing: Thank you.

PM Lee: Thank you.