World must adapt to rise of China which 'can't wait decades before taking on larger responsibilities': PM Lee

SINGAPORE — As China’s rise shifts the global strategic balance, the world — including China — must adapt to this reality, and the Asian power cannot wait decades to assume larger responsibilities, Prime Minister Lee Hsien Loong has said.

Opening the Shangri-La Dialogue, an annual high-level security summit, on Friday night (May 31), Mr Lee said: “China can no longer expect to be treated the same way as in the past, when it was much smaller and weaker.

“China may still be decades… from becoming a fully developed advanced country, but it cannot wait decades before taking on larger responsibilities.”

The Prime Minister’s comments come as China and the United States are embroiled in an escalating trade war.

Senior government leaders from around the world — including China’s Defence Minister Wei Fenghe and Acting US Defence Secretary Patrick Shanahan — are in town for the summit. It runs from Friday to Sunday.

Mr Lee said that China, having gained much from the international system, has a substantial stake in upholding it and making it work for the global community.

He noted that China’s leaders have spoken up strongly for globalisation and a rules-based international order.

“China must now convince other countries through its actions that it does not take a transactional and mercantilist approach, but rather an enlightened and inclusive view of its long-term interests,” Mr Lee urged.

TRADE FRICTIONS

The trade tug-of-war between the US and China has seen the two sides impose higher tariffs on billions of dollars of each other’s goods.

The US has also put Chinese telecommunications-equipment firm Huawei on a trade blacklist, effectively barring American companies from doing business with the firm.

Mr Lee said that the US-China relationship is the most important in the world at present and how the two sides work out their frictions would define the international environment for decades.

Their relationship, though, has already changed significantly, he noted.

China opened up four decades ago and is now the world’s second-biggest economy. Its economic output per person — or gross domestic product (GDP) per capita — has surged more than 25 times in real terms.

On many counts, China’s growth is a “tremendous boon” for itself and the world, said Mr Lee.

Though it is still far from being a full market economy, China has transformed its backward, centrally planned economy into a middle-income, market-driven one.

More than 850 million Chinese people have been lifted out of poverty, an achievement unprecedented in human history, Mr Lee said.

China has also morphed into a massive production and manufacturing base, reducing costs for the world’s producers of labour-intensive goods and, increasingly, for high-tech production, for example.

The Asian power also imports a range of products from commodities to aircraft. Meanwhile, billions around the world buy China-made products, such as basketballs and mobile phones.

CHINA’S RISE HAS AVERTED ‘DISASTROUS’ OUTCOME

Mr Lee also painted a picture of a world that would have been significantly different had China stayed closed and undeveloped.

Many problems would have been exported to the world, “quite possibly still including armed revolution”, he noted.

Its population — China has 1.4 billion residents — “would have been resentful and restless at being left behind by other countries”.

The Asian giant’s success, Mr Lee said, has enabled the world to avoid this “disastrous” scenario.

Meanwhile, Mr Lee said the trade arrangements and concessions that China negotiated when it joined the World Trade Organisation (WTO) in 2001 are “no longer politically wearable” for other countries.

At that time, China’s merchandise trade formed only 4 per cent of world trade. This has since nearly tripled to 11.8 per cent.

Mr Lee said: “It is in China’s own interest to prevent the international framework of trade from breaking down and to implement timely changes that bring about greater reciprocity and parity with its trading partners, and that are more consistent with present-day China’s more advanced state of development.”

CHINA’S WORDS SEEN DIFFERENTLY TODAY

China is now a major power with the second-biggest defence budget globally, and its words and actions are also seen differently as a result, said Mr Lee.

While it was “natural” that China wants to build modern and capable armed forces, for instance, to protect its territories and trade routes, Mr Lee said that it needs to wield this strength with restraint and legitimacy to grow its international influence beyond hard power.

Frictions have arisen occasionally.

Take, for example, the overlapping maritime claims in the South China Sea, which Mr Lee said China should resolve peacefully according to international law.

China lays claim to much of the strategic waterway, which is also contested by several neighbouring countries, including Brunei, the Philippines, Malaysia and Vietnam.

“It should do so through diplomacy and compromise, rather than force or the threat of force, while giving weight to the core interests and rights of other countries,” said Mr Lee.

“Then, over time, it will build its reputation as a responsible and benevolent power that need not be feared.”

US MUST ADJUST TO CHINA’S RISE

Mr Lee stressed that other countries have to accept that China will continue to strengthen and it is neither possible nor wise for them to prevent this.

China will have its legitimate interests and ambitions, including developing indigenously advanced technologies such as artificial intelligence, he noted.

Mr Lee said that, as the pre-eminent power, the US has the “most difficult adjustment to make”.

“However difficult the task, it is well worth the US forging a new understanding that will integrate China’s aspirations within the current system of rules and norms,” he added.

As new international rules need to be forged in many areas, including trade and intellectual property, Mr Lee said that China would expect a say because it sees the present rules as having been created in the past without its participation.

“This is an entirely reasonable expectation,” said the Prime Minister.

“The bottomline is that the US and China need to work together and with other countries, too, to bring the global system up to date and to not upend the system.”

On their trade dispute, Mr Lee said that if the two sides treat it on its own merits, he had no doubt that their highly competent trade negotiators would be able to resolve it.

“But if either side uses trade rules to keep the other down, or one side comes to the conclusion that the other is trying to do this, then the dispute will not be resolved and the consequences will be far graver than a loss of GDP,” Mr Lee said.

If that comes to pass, he said that the broader bilateral relationship would not only be contaminated, but other areas, including investments, technology and people-to-people relations, would also inevitably be affected.

“Every action taken by one side will be seen as a direct challenge to the other, and will elicit a counter-action. We will all be headed for a more divided and troubled world,” said Mr Lee.

He added: “We hope the US and China find a constructive way forward, competing certainly, but at the same time, co-operating on major issues of mutual interest and global problems.”