← Bloomberg Talks
Bloomberg Talks
Singapore Prime Minister Lawrence Wong Talks Adapting Economically & Politically
00:31:13
Loading summary
Transcript76 lines
- [00:00]
Indiana University/FedEx Narrator
Old playbooks won't solve tomorrow's problems. Indiana University is proving how higher education can create solutions with industry. Our partnerships address future talent and workforce needs, support entrepreneurs and local businesses, and create solutions that turn discoveries into dollars. Together, we're building a model for industry partnerships that fuel economic growth. Explore IU's impact at iu.edu impact.
- [00:29]
Lee Hsien Loong
Bloomberg Audio Studios Podcasts Radio News to bring.
- [00:35]
Interviewing Journalist
You down to earth a little bit, you could argue that the success of Singapore has been based around two things being a bastion of free trade and also being somewhere between east and West. And now you have protectionism on the rise and we have that struggle between China and America.
- [00:53]
Lee Hsien Loong
That worries us.
- [00:54]
Interviewing Journalist
It does. I think it worries us all. But when Xi Jinping and Donald Trump met in South Korea, you called it a temporary truce. And I wonder, you've just seen this spat going on between Japan and China over Taiwan. How precarious does Asia feel at the moment?
- [01:13]
Lee Hsien Loong
I thought first of all, going back to the meeting between the two leaders, presidency and President Trump, it was a good meeting. And while it may be a temporary truce, a temporary stabilization in the relationship, it's much needed and it will provide guardrails for the two powers to engage one another. It will open up channels of communication. It's not just once off because the two leaders will meet probably four times next year because President Trump said he would visit China. President Xi will probably visit back. And then there's APEC and Shenzhen and G20 in Miami. So many opportunities for engagement and it's much needed for stability. The intense competition and rivalry will continue, I'm sure. The mutual suspicion and distrust remains, but the guard rails will ensure that the rivalry does not slide into a full decoupling or worse, confrontation and conflict. So on that I'm slightly hopeful after seeing the rapport, the engagement that the two of them had, at least in the near term.
- [02:22]
Interviewing Journalist
Do you think China won that particular round? It seemed that America gave way on most things.
- [02:28]
Lee Hsien Loong
I'm not here to referee whether one side won or another. All I want is the both to coexist and engage constructively. Now on Japan and China, we all want stability in Asia. I mean that's of course something. It's in everyone's interest. So we certainly hope that both countries will find ways to de escalate the current issue. The China Japan relationship is important. Economically, it's important. China is Japan's largest trading partner, but it's a complex relationship partly because of the US China strategic competition. So everything that China and Japan has is Seen through that larger prism, they also have disputes in the Senkaku Islands. And of course, it's also because of the overhang of the history of the Second World War, which still remains between the two countries. We hope the two countries will find ways to resolve these very complex issues and move forward. Southeast Asia has done that with Japan. As far as the history is concerned, it has taken some time. But with the passage of time, with the passing of generations, the feelings are not the same. And we have put the history aside and we're moving forward. And it's quite striking that survey after survey shows that Japan is the number one trusted great power in Southeast Asia. And so Singapore and all the Southeast Asian countries support Japan playing a bigger role in our region, including on the security front, because we think that provides for some stability in the region.
- [04:06]
Interviewing Journalist
All the same. Do you think poking the dragon in the way that the Prime Minister did, do you think that was advisable?
- [04:13]
Lee Hsien Loong
Well, I'm not her advisor. I can just judge the wisdom of people. I can't judge the wisdom of whether or not what she said was wise to do. But it has been said it can't be unsaid now. So it is there. There will be a difference of views, clearly. And I think both sides, I think on the Japanese side, they are clearly wanting to bring things down to stabilize the relationship and not cause this to escalate further. And I hope China will feel the same way. And while there may be differences, the two countries can still get along and work together.
- [04:52]
Interviewing Journalist
The current atmosphere. What do you think the chances are of a war over Taiwan?
- [04:59]
Lee Hsien Loong
We've always said that we don't think this is likely to happen in the foreseeable future, at least in terms of a unilateral, unprovoked action by China. You've asked this question repeatedly to my predecessors.
- [05:16]
Interviewing Journalist
To me, so far, you've been right.
- [05:18]
Lee Hsien Loong
And our views remain the same. It is an important issue for China, Taiwan. It is the redness of red lines. But I don't see, and we don't see it happening unless something happens that really crosses China's red lines in terms of, for example, a unilateral move by Taiwan to declare independence, because then it becomes two Chinas, not one China. I think America's policy here also is very critical, and America has always been consistent and very careful with its policy that there should not be any unilateral change to the status quo. And number two, that while America defends or supports Taiwan's ability to defend itself, it does so in accordance to the Taiwan Relations act and to America's One China policy. It's a very carefully crafted statement. And up to now, across different administrations, America has, broadly speaking, maintained a consistent approach with that policy. And if it does so, I think there will be a good chance of us maintaining peace and stability in the Taiwan Straits.
- [06:33]
Interviewing Journalist
You also talked about a post American order which sort of interests me because it implies that America's move towards isolationism and protection. And it's not just Donald Trump that even after he goes back to Mar a Lago or heaven, or maybe he doesn't know the difference, America no longer will be a champion of globalization, no longer be a sort of partner that you can rely on in the same way as you did. Do you really think that America has gone?
- [07:06]
Lee Hsien Loong
We hope not. When I said post American order, I was referring to the forces that are driving us towards a more multipolar world. So the unipolar moment where America was the clear, was the leader that helped to guide, underwrite the global system, that moment, I think, is over. So the old rules do not no longer apply, but the new ones have not been written. But as we transit into this new multipolar world, it's not as though every pole remains the same. America is still the biggest, most powerful country and still maintains America's leadership remains vital. And we certainly hope that America will be actively engaged in the world. Maybe not now, maybe not with this administration, but there will be a time when America can take up its role, be actively engaged, constructive, and continue to have good relations with all its key partners. America's role is critical for stability and continued prosperity in the world. And the world needs America to behave like that.
- [08:13]
Interviewing Journalist
To look at from the outside, America's policy towards China seems somewhat schizophrenic. On the one hand, there is a very strong desire to keep China in check. On the other hand, most people would say you keep a country like China in check by bringing all the other allies, all the people in the region onto your side. And yet, as you pointed out when tariffs happened, Trump has hit everyone with a variety of things which would not seem like ally like behavior.
- [08:45]
Lee Hsien Loong
You know, I visit China regularly just to find out how things are developing and all the actions that America takes vis a vis China has in a way only strengthened their resolve to work even harder to move faster on technology, self sufficiency and to and they are determined to grow. So one China commentator tells me there's nothing America can do to stop China. Only China can stop China. And when I heard that it reminded me of something I heard long time ago about the US Too. Abraham Lincoln once said, if destruction be our lot, let us Americans be the author and finisher of it. And so it strikes me that I.
- [09:39]
Interviewing Journalist
Think that was shortly before a civil war. So it may be rather bad.
- [09:43]
Lee Hsien Loong
But it strikes me that in this great rivalry, everyone is focused on what one country does to another. But really the fates of these two great powers will be determined by their own people. At the end of the day, Americans decide Americans future, Chinese people decide Chinese future. That's what it comes down to. And it's their actions, their agency that determines domestic reforms, that determines the direction that these countries will take in terms.
- [10:14]
Interviewing Journalist
Of Singapore's position in that world. I mean, I suppose if I was to look at Southeast Asia, I must be coming here for three decades or around that. When I first came, I think there was a general presumption that if things came to a head with China, most of Southeast Asia would probably stick with the West. You look at what's happened over the past year, you know, that's become Southeast Asia, including Singapore has become home to many more Chinese companies. As I said, Donald Trump hit the allies with tariffs. You had Joe Biden wasn't that kind to you either. Your first visit, your first visit as Prime Minister was to Beijing, not to outside ASEAN was to Beijing, not Washington. I mean, is America losing this region?
- [10:58]
Lee Hsien Loong
We've put a request to visit Washington, waiting for the dates, but I wouldn't read too much into these sorts of things.
- [11:06]
Interviewing Journalist
But that's indicative, isn't it? You would imagine an American president would want to see one of his main.
- [11:12]
Lee Hsien Loong
Where I go, what countries I visit. And I also wouldn't say that in the past it's very clear cut that countries would side with one side, the west, and now side with China, and things have flipped. I think that's too simplistic a portrayal. There is no doubt America's actions over this recent period has impacted America's standing in Southeast Asia. All the surveys would suggest that. And it's very clear cut. But I think there's still tremendous goodwill and desire for ASEAN countries to engage the US President Trump came for the ASEAN summit meeting. He presided over the peace accord between Cambodia and Thailand. And then he sat down for a meeting with all the ASEAN leaders, patiently listening to each one, engaging and listening to each one, and at the end of all the interventions said that America and him personally is committed to asean. I think that's well received by asean. In the previous administration. Gina is here Secretary Raimondo, we worked on Indo, the IPEF Indo Pacific Economic Framework under the Biden administration. And many Southeast Asian countries welcome that because America is still the largest investor in this part of the world in terms of fdi and all the countries look forward to having more linkages with America, more engagement with America, more investment from the us. So, yes, America's standing has taken a hit, there's no doubt. But we hope America can recover from this and we would like to see America recovering from this.
- [12:55]
Interviewing Journalist
Just on that, you've spent quite a lot of time though talking about a multipolar world and one way you've tried to, I suppose, bring together what might be described as a coalition of the willing of kind of free trading countries that would deepen ties and that would sort of get on with the business of globalization, whilst America and China go about building walls of different sorts. But that particular way, you know, what can you do with that in practice? You see, you've accumulated a group of countries. What can you actually do? It's the sort of, is it just about having slightly better documentation and things? What is the end of that?
- [13:33]
Lee Hsien Loong
Let me put it this way.
- [13:35]
Interviewing Journalist
The.
- [13:38]
Lee Hsien Loong
Stable multilateral framework that we were all familiar with is unraveling. That framework was optimized for trade efficiency. In today's world, countries are more concerned about security and resilience. So countries everywhere are prepared to accept some inefficiency, higher cost in return for higher security and resilience. But this is now being done unilaterally, country by country, taking its own actions, and that's just not sustainable. In the worst case, you will end up with something like what happened after the Smoot Hawley tariffs in the 1930s. Someone does something, another one retaliates. There will be a dynamic where it's just escalating and before too long we will end up with devastating consequences. On the other hand, we know that the wto, which was meant to solve these problems, isn't working. We would like to see a new framework in place. It's not easy to get that happen now, but ideally a new framework that finds ways in which countries can legitimately exercise and protect their own national interests, but with restraint, with some shared rules, and not on the basis that you can unilaterally do things to coerce another country or to punish another country, which is somewhat happening now. So how do we get there? And I think it's very hard for all of us to imagine ways to get there, but I think we should not give up trying. And that's what we would like to do, which is work with like minded countries. Some of the, you know, we have a future of investment and trade partnership with 15 or so countries doing this, but also working with the wto, working with regional groupings like the CPTPP and the eu. And all of these efforts ultimately are not just about tariffs. They are about setting new norms, new rules of the road that would allow us to facilitate trade and investments and find some way to ensure supply chains remain resilient and secure. And in a way, we are laying the foundations for a new multilateral framework that may come later on.
- [15:59]
Interviewing Journalist
I looked and saw the future of investment Trade partnership, FITP as it's known, and the members include Glupiz, Brunei, Costa Rica, Chile, Liechtenstein, Morocco, New Zealand, Norway, Panama, Rwanda, Singapore, Switzerland, the UAE and Uruguay, which is a fantastic kind of World cup group to be in. It doesn't feel like the beginnings of a big trade block.
- [16:23]
Lee Hsien Loong
I know, but don't sweat the small stuff. You know how the TPP started and the TPP started P4, very small countries, four tiny economies came together in the P4 that became the TPP. And when America decided not to continue, we had the cptpp. So great things can start from small places, including Singapore.
- [16:51]
Interviewing Journalist
What about something you've already, What about something you've already got, which is ASEAN and you are a next year, no. 20, 27, you become 10, take over the chairmanship of it and you look at ASEAN, as you say, it's been very successful at preventing conflict. It's become a kind of grouping. When you tried to negotiate with Trump as a group, he slightly pushed it aside and made you negotiate one with each other. I wondered, is there a way of making ASEAN into something bigger, something deeper? At the moment it's based wholly around consensus. Could you ever move to something like a majority agreement instead? I hate to mention the words European Union in a good light, but if you were to take it a little bit closer to the European Union, we.
- [17:45]
Lee Hsien Loong
Certainly want to integrate faster and bring together the single market. I mean, there's so much that still needs to be done, but we also have to recognize the wide diversity of ASEAN countries at different levels of division. And so it's we move as fast as we can. I would say that it was not so much that the US didn't want to negotiate with ASEAN collectively. It's just impossible given the diversity in asean. ASEAN would not be able to negotiate a trade deal with America as a collective. It had to be country by country. We are not quite there yet to negotiate deals like that collectively. But ASEAN has its advantages and strengths. It's when we talk about ASEAN centrality, for example, it's not as though it means ASEAN dominates everything, but it means ASEAN has pooling power as a convener. And precisely because of the fracturing of the global economy that we see now and the uncertainties, more and more major powers would like to strengthen their links with asean. EU is interested in an FTA with us, the gcc, we've been talking to them. Canada is interested in an FDA with us too. So we are discussing these initiatives very seriously. And hopefully when. I mean, we will do this next year, when Philippines is chance and when Singapore chairs ASEAN in 2027, we hope we can continue to build on the foundations and make progress.
- [19:12]
Interviewing Journalist
So the way in which ASEAN would grow will probably be going broader rather than deeper. You're not going to end up with a.
- [19:18]
Lee Hsien Loong
We have to do both. I think we have to go deeper as well. But it does that going deeper takes time. It's not straightforward. And countries will be able to move at different paces. And in some instances, we may very well say the countries that are able to move faster do first. I wouldn't rule that out.
- [19:38]
Interviewing Journalist
When we talked about the region, you said you didn't think there was war coming on or anything like that, but there is. Do you think in the end, a country like Singapore will have to choose between China and America? You've managed to avoid that so far.
- [19:52]
Lee Hsien Loong
Another favorite question.
- [19:53]
Interviewing Journalist
Yes, it's coming that way. Journalists are notoriously unoriginal, but the problems don't change. The choice is arguably getting bigger.
- [20:04]
Lee Hsien Loong
The pressures will always be there. The great powers say, we don't want you to choose. But of course each one wants us to be a closer friend to them. And that's always. The tension is always there. The pressures will always be there. But at the end of the day, we don't have to choose. Really, we have to. I mean, it's not issue by issue. There will be some instances where we look at the issue and we so happens that the particular position we take is the same as the us, for example, or as China, for example. But it's not from the lens of choosing one versus the other other. It's from the lens of Singapore's national interest. And that will always be the case for us. And it's the same not just for Singapore, it's the same in asean. ASEAN countries feel the same way. We have been the arena for proxy wars before. It's been such a Painful experience. We don't want that to happen again. And so ASEAN will continue to be fiercely independent, not so much non aligned, but multiple aligned. You know, engage with all the key.
- [21:08]
Interviewing Journalist
Players on that subject. You know, hot war, but there's a lot of cold war going on. And there's been this issue about state sponsored cyber attacks, people interfering in the election. Your party complained about that in the election you won, you've had cyber attacks and you're going to adjust. I think your foreign interference looks or further.
- [21:29]
Lee Hsien Loong
Yes.
- [21:30]
Interviewing Journalist
And I wondered, are there any particular countries you're worried about? Is it China, Malaysia, Indonesia or all the above?
- [21:39]
Lee Hsien Loong
We don't call out our adversaries, but we know who they are.
- [21:44]
Interviewing Journalist
It's a good way to be around. Can I ask a bit about.
- [21:47]
Lee Hsien Loong
And we are not naive.
- [21:49]
Interviewing Journalist
Can I ask about Singapore as a financial hub? You've had this onrush of money coming here. You've had this big push to lure people here, the family offices. You see many of them here, a lot of wealthy people coming here. And you get two issues from that. And the first one is this issue of inequality, which I know the Gini coefficient has got better, so that in income terms, in income terms, income is getting better. But there is this. Every time I come here, people talk about inequality more.
- [22:16]
Lee Hsien Loong
Yeah.
- [22:16]
Interviewing Journalist
And I wondered, you've already introduced taxes on luxury cars and properties, but do you see Singapore moving towards other things, A capital gains tax, for instance.
- [22:29]
Lee Hsien Loong
Two separate issues really. Because wealth management Singapore is a financial center. I think we can grow in terms of wealth management. Family offices may set up here. They are not Singaporeans. They, you know, have their offices here, they manage your funds out of Singapore. We welcome that. It creates jobs for Singaporeans. I think that's a good thing. And we can explain that to Singaporeans. Sometimes it creates frictions, especially when they are ostentatious. Shows of Ferrari, Ferraris and things.
- [23:02]
Interviewing Journalist
Yes.
- [23:03]
Lee Hsien Loong
And we have just to remind them, you know, Singapore is a different society. We are egalitarian, our norms are different. Please understand. And for the most part they do. Tackling wealth inequality, where it comes to our people and our population. That's something we continue to work on. Whether it's income or wealth. We have a range of policies. It's not just about tax alone because in Singapore we have the ability to also provide wealth injections. And a major reason why we can do that is housing. Everyone owns, almost everyone owns their own home. Majority live in public housing. And when you buy a flat from the Housing Development Board in Singapore, you get housing equity. And that's the reason why even at the lower end of bottom 20% of households actually they have significant net wealth, net asset value because of home ownership. So that's one way we can continue to fine tune our policies to provide more support and uplift for lower income groups. We also have a central provident fund which is Social Security, which is the individual's own retirement nest egg which we do top ups from time to time. So our tool sets are not limited. I know there's a lot of interest again Bloomberg's favorite question for me. Capital gains, capital gains tax, wealth tax, a lot of questions about tax. But our, our toolkits are not limited to tax alone. We also have wealth transfers.
- [24:38]
Interviewing Journalist
I'll take that as a maybe just. The other issue about a lot of wealthy people coming here is that not all of them have been virtuous, if I can put it that way. You know you had the money laundering.
- [24:50]
Lee Hsien Loong
Yeah, we've got illicit flaws.
- [24:51]
Interviewing Journalist
Yes. And you had the accusations about within the US about one the heads, the of the main Asian crime families being here. You've dealt with these things. But there is one of your ministers had a very nice Chinese saying, when we open the windows, some flies may.
- [25:07]
Lee Hsien Loong
Also enter and sometimes we get more than flies.
- [25:09]
Interviewing Journalist
Yes, but how many flies can Singapore tolerate? And do you need a bigger fly swatter?
- [25:16]
Lee Hsien Loong
We do have quite a big fly swatter. I mean it's, we take it very seriously. It's not unique to Singapore. The illicit flows are everywhere. All financial centres have to deal with this. So to us it's not so much about what you know that there is an incident, there are bound to be incidents and they are bound to be suspicious transactions. And then with intelligence, with cooperation across different countries, eventually we get to the bottom of it. The key is what do you do? And we are very stringent and we take swift action and we will, we are determined to protect our reputation because that's what keeps Singapore going. A trusted business and financial center.
- [25:59]
Interviewing Journalist
Can I, can I ask you about energy? I've been quite struck being here for the past day or so is that a lot of people are talking about all those new data centers. The idea that I particularly will need more energy. You look at Singapore energy at the moment, the virtually all of it comes from lng, very successful. But the idea that somehow in the end Singapore has to kind of get energy of its own and there you're really in a choice about either trying to do something with one of your neighbors, maybe a renewable thing or Whatever. The other big, very obvious option is nuclear energy. Is that something which is going to become a much bigger part of Singapore's future?
- [26:36]
Lee Hsien Loong
We don't know yet, but we are certainly studying the option options seriously. There won't be an easy silver bullet in our case. Because we are small, we are unable to scale up renewable energy in terms of the amounts that we need. Some of the solutions as you highlighted would include plugging into an ASEAN powered grid which we are building, taking time, complex, but it's happening. But still we would like to have our own source of clean power. Hydrogen might come up as one possibility, but it's expensive. So you could ship hydrogen and then burn it through a turbine. It's got lower emissions than lng. That's possible. But we are also studying the possibility of nuclear power. Especially when you look at some of the new technologies with SMRs which are safer. We are looking at whether it might be possible. In our context, we are very small. 750 square kilometers or less than 300 square miles. That's tiny.
- [27:40]
Interviewing Journalist
Yes.
- [27:41]
Lee Hsien Loong
So we have to take it, we have to look at the, look at it, consider the safety very closely before we decide and look at the technology and how it's evolved.
- [27:50]
Interviewing Journalist
There are a kind of timescale on that.
- [27:51]
Lee Hsien Loong
When do you think it really depends also on how the technology evolves. And as of now we've been looking at different technologies. You don't really see very many operational SMRs, particularly small. The SMRs which are grid scale, we're not talking about the tiny ones, like 50 megawatt, you know, those don't serve our needs. Right. We're talking about grid scale, commercial scale SMRs and you don't see a lot of them around as of now. And so we are studying, looking at, you know, we are working with partners including America and others, Europe, looking at the technology, understanding it better, understanding the implications. And then if we think it's possible, we will have to also convince the public that this is indeed a technology that is safe and deployable in Singapore. But we are not there yet. We are still at the very early stages of building up capabilities.
- [28:49]
Interviewing Journalist
Many things about you and ask you a personal question at the end. You know you're the first leader to be born after Singapore declared independence.
- [28:56]
Lee Hsien Loong
Yes.
- [28:57]
Interviewing Journalist
You're certainly the second leader outside the Lee family. And I wondered, we only had four.
- [29:02]
Lee Hsien Loong
Prime ministers in Singapore.
- [29:04]
Interviewing Journalist
Not many people have had four prime ministers for that long. What makes the biggest difference to you?
- [29:10]
Lee Hsien Loong
Is it that generational thing, your difference in terms?
- [29:14]
Interviewing Journalist
Well, in terms of the way that you want to go ahead, that you are somebody from a new generation of Singapore, does that make a bigger difference to the way you want to lead Singapore over the next period?
- [29:28]
Lee Hsien Loong
I suppose me being from a different generation is part of it. But in terms of ethos, mindset, values, I represent the party and the foundational values remain the same. We are here to be build a better Singapore, because history has never been kind to small states. And we know despite our success these last 60 years, the world is a dangerous place. It's become even more dangerous. And our mission, my mission is to keep Singapore going, not just in my term, but to leave behind a better Singapore for my successor and for future generations. So that remains the ethos, the foundational values in which my party represent, which I represent. I keep going back to this very vivid memory of when I was in Michigan studying. I've told this story before, but not all the guests here might know this. There is a ghost town in Michigan and it's called Singapore. Truly, it was founded, it was based.
- [30:39]
Interviewing Journalist
Around free trade and minimal government.
- [30:43]
Lee Hsien Loong
I don't know. It was founded in the 1830s near Lake Michigan. Why Singapore? Perhaps 1830s? Perhaps it took inspiration from the fact that in 1819 there was this exotic port in the exotic Far east founded by Sir Stamford Raffles. And so maybe the name traveled. It took some time for things to travel in those days, and perhaps it took inspiration from that. But Singapore and Michigan didn't last very long. I think about 50 years. It's overwhelmed by the sifting sand dunes and now there's only a marker that says this is where Singapore, Michigan stood. We want Singapore in Southeast Asia to last for a very long time. That's my mission.
- [31:30]
Interviewing Journalist
Well, we all hope you achieve that. Thank you very much, Prime Minister, for talking to us. And thank you very much for hosting us here.
- [31:36]
Lee Hsien Loong
Thank you.
- [31:38]
Interviewing Journalist
Thank you.
- [31:40]
Indiana University/FedEx Narrator
Old playbooks won't solve tomorrow's problems. Indiana University is redefining the relationship between higher education and industry. We're addressing future talent and workforce needs through more than 10,000 industry partnerships, supporting and investing in young entrepreneurs and businesses that create jobs and grow the economy, and facilitating the research and development that lead to breakthrough solutions. This isn't business as usual. Indiana University plus industry is a partnership that fuels economic growth. Explore IU's impact at IU. Edu impact. This podcast is brought to you by FedEx. The new power Move. Hey, you know those people in your office who are always pulling old school corporate power moves? Like the guy who weaponizes Eye contact. He's confident, he's engaged. He's often creepy. It's an old school power move. But this alpha dog laser gaze won't keep your supply chain moving across borders. The real power move? Having a smart platform that keeps up with the changing trade landscape. That's why smart businesses partner with FedEx and use the power of digital intelligence to navigate around supply chain issues before they happen. Set your sights on something that will actually improve your business. FedEx. The new power move.