Singapore Government Press Release
Media Relations Division, Ministry of Information,
Communications and the Arts,
MITA Building, 140 Hill Street, 2nd Storey, Singapore
179369
Tel: 6837-9666
SPEECH
BY GEORGE YEO, SINGAPORE MINISTER FOR TRADE AND INDUSTRY, AT THE HBS GLOBAL CONFERENCE
IN SHANGHAI ON 17 JUNE 04 AT 12.15 PM
WHAT CAN GO WRONG?
Changing Global
Polarity
I was in South America for almost two weeks earlier this
month to attend the APEC Meeting of Ministers Responsible for Trade in Chile
and to visit the four countries of the Southern Cone, the MERCOSUR countries of
Brazil, Argentina, Uruguay and Paraguay.
These countries are a long way from here. What struck me most since my last visit to
that part of the world three years ago was the sudden growth of interest in
China and East Asia. Last month,
President Lula made a very successful visit to China with a large business
delegation. It was covered extensively
by the media in North America and Europe.
There is strong hope in South America that the prosperity which commodity
exports to Europe in
the last half of the nineteenth century and the first half of the twentieth
century brought them will be repeated in this century by exports to East Asia,
especially China, and maybe also India.
A protocol officer in Uruguay mentioned that he received a delegation
from China almost every week. They were
there to buy meat, wool and other products.
What we are seeing is a new political and economic
configuration in the world. The
bipolarity of the Cold War led to the temporary unipolarity
of the US after the collapse of the Soviet Union. Although the US remains
militarily dominant, we are seeing increasingly a multi-polar world with Europe, Russia, China, India, Brazil
and South Africa also becoming centres of global or
regional power.
Rise of Asia
The growth of China is the most dramatic. In the last few years, China has become a
major trading partner of all countries in East Asia accounting for much of the
increase in exports and imports. Even
the recent recovery of Japan has been ascribed by some economists to the huge
growth of Japanese exports to China.
Commodity prices have shot up because of insatiable Chinese demand for everything from
steel to oil. Only a few years during
the Asian financial crisis, the fear everywhere was the devaluation of the
RMB. Today the calls are for China to
revalue the RMB.
All over Asia, the present mood is upbeat. India has become a new growth story full of
promise. In the last six months, the
economic growth of India has rivalled that of China. Southeast Asia is also looking much better
now. Vietnam, Thailand, Malaysia and
Singapore are expected to do well this year.
Indonesia is still going through a difficult period of political
transition from the Suharto days to a constitutional
democracy. What gives hope there is the
relatively peaceful way in which elections are being carried out.
East Asia, India and Southeast Asia together account for
half the world's population and could well account for half the world's economy
within a few decades. Asia's share in
global GDP today is about a quarter. In
PPP terms, it is about a third. China is
likely to recover its position as the world's largest economy which it was for
most of human history. The historical
importance of this shift in the global economy is profound. Understanding the trends and moving with and
not against the flow can make a decisive difference between success and failure
for many companies and individuals.
What Can Go Wrong?
But history is full of surprises and one should be wary
about projections of any kind. Indeed,
some problems can go badly wrong if they are not well managed. In East Asia, we still have two residual
problems of the Cold War - North Korea and Taiwan. There is also the phenomenon of extremist
Islam which affects many parts of Asia.
North Korea
The strategic imperatives which caused the division of the
Korean peninsula have largely disappeared.
Neither China, Japan nor the US want a conflict
there. Although they have different
preferred time-frames for the reunification of the two Koreas, none of them would
like to see a North
Korea with nuclear weapons. China's
active involvement in the six-country peace process has lessened tension. North Korea's sporadic attempts at liberalising its economy should be encouraged and incentivised. However, North Korea remains a serious
problem which has to be carefully handled.
Taiwan
Tension across the Taiwan Straits is much more dangerous and
can go badly wrong quite quickly. This
is basically a problem of Sino-US relations.
When Nixon restored US relations with China in 1972, both sides accepted
that this was a long-term problem which could be set aside for the time
being. Subsequently, the US agreed to
the Three No's - no two Chinas, no one China and one Taiwan, and no support for Taiwan
independence. Within this framework,
cross-straits relations improved steadily until the early 90's.
In 1991, China agreed to the inclusion of Hongkong and Taiwan in APEC. I remember the ministerial meeting in Bangkok
the following year, when I sat together with Li Lanqing of China, Vincent Siew of Taiwan and Brian Chau of Hongkong for lunch.
In 1993, Wang Daohan of China and Koo Chen-fu of Taiwan met for historic talks in Singapore
on the basis of there being one China.
That was the high point.
Cross-straits relations took a drastic turn for the worse
after that. In 1994, Lee Teng-hui gave an important interview to a Japanese
journalist where he described himself as Moses leading his people out of
Egypt. In 1995, following the agreement
by the US Government to let Lee visit his alma mater at Cornell, China carried
out missile tests in the waters off Taiwan.
To deter China, two US aircraft carrier battle groups steamed into the
East China Sea but kept out of the Straits.
Beijing was convinced that Lee's objective was Taiwan
independence, a goal which Lee states openly today. When Chen Shui-bian
became President in 2000, Beijing watched his subsequent moves closely. China's leaders are convinced today that he
too would like to take Taiwan independent despite his protests to the contrary. They see Chen's intention to draft a new
constitution in 2006 as an attempt to put Taiwan on the road to independence. Chen denies all this. But China's leaders are alarmed and have signalled strongly to the US that it will have to act to
forestall such moves towards independence.
China has stated unequivocally that the 2008 Beijing Olympics would be
sacrificed if this was necessary.
Although the Bush Administration has made its position clear that it
does not support Taiwan independence, some Americans believe that China's
leaders are bluffing or blustering. On
the Chinese side, many Chinese believe that the US is playing a double
game. If either side miscalculates,
there could be war and war between the US and China would have enormous
consequences for all of us. If the
Chinese still harbour bitterness against Japan about
a war that ended 60 years ago, can one imagine what a
war between the US and China will entail?
This is a poker game with us as the chips on the table.
On balance, however, I believe that both sides will
calculate rationally and avert conflict.
There is simply too much to lose.
Taiwan's economy is already integrated to China's in a myriad ways. There is also a more immediate challenge which the US and, to a lesser extent, China have
to confront. This is the problem of
extremist Islam.
Extremist Islam
There are roughly as many Muslims in the world as there are
Chinese. Collectively, they are called
the umma.
Their complex historical response to the challenges of the modern world,
starting with the decline of the Ottoman Empire, is a major drama on the global
stage today affecting all continents, save perhaps Latin America. Muslim terrorists are now making use of the
same technologies which undergird the global economy.
About 40% of the population of Southeast Asia is
Muslim. In South Asia, the Hindu-Muslim
divide led to partition and the creation of Pakistan. Despite that, India has a large Muslim population
many of whom voted for the Congress Party against the BJP in the last election.
China has a significant Muslim minority which is not insulated from global
Islam. I remember seeing Uighur women wearing burqa a few years ago in Kashgar.
The struggle for the soul of Islam will last many generations. The medieval Catholic mind had to go through
the throes of the Reformation, Counter-Reformation and the Thirty Years War
before finally emerging into the modern era.
The Chinese mind was no less resistant to change. The period from the rejection of Lord Macartney's mission to the Qianlong
Court in 1793 to Deng Xiaoping's policy of reform and opening up in 1978 was a
tortuous process which spanned 200 years, engulfing the Chinese nation in war
and revolution, a process of transformation which some might say is still ongoing
today. We must therefore not expect the
problems of the Islamic world to be resolved quickly. This is principally a struggle within the umma itself, a
debate among Muslim political and religious leaders for the hearts and minds of
Muslims everywhere.
However, non-Musims are not
passive observers. To the extent that
terrorism is a threat, we have to defend ourselves. We have to share intelligence and be prepared
to act in concert against international terrorist networks like Al Qaeda and
the JI. The role of the US is critical
in the fight against global terrorism.
The daily provocations in Palestine cry out for urgent resolution. The long-term stabilisation
of Iraq will have a big impact on the entire Middle East. As we now understand all too clearly, many of
these problems cannot be solved by military force alone.
In the battle for Muslim hearts
and minds, we have to
weigh in on the side of the moderates against the extremists in every country,
in every mosque, in every religious school.
This is not a burden the US can bear alone.
In fact, if the US were to be too involved in this internal Muslim debate, it will backfire. The recent election victory by Malaysia's
Abdullah Badawi shows what can be done. By positing a modernist view of Islam, PM
Abdullah Badawi was able to persuade many Muslims
that the Opposition Islamic Party was obscurantist. In Indonesia, the three leading contenders in
the Presidential race are all political secularists. But all have seen the need to choose running
mates with strong Islamic credentials.
Where Islam is mixed with struggles for regional autonomy like in
Kashmir, Mindanao, Southern Thailand, Aceh and Xinjiang, the problems are more difficult to solve.
September 11 was a watershed. In an unexpected way, it brought about better
Sino-US relations. In April 2001, there
was great tension when a US spyplane was brought down over Hainan Island. I
remember the APEC Ministerial Meeting in Shanghai in June when Amb Robert Zoellick was the first
Cabinet-level official to visit China. Amb Zoellick made friendly
gestures which the Chinese responded to.
President Bush attended the Leaders' Meeting in Shanghai that October
and President Jiang Zemin declared his solidarity with Bush in the fight
against terror. By that time, after September 11, Chinese
fighter aeroplanes escorted Air Force One into
Chinese airspace, a dramatic turnaround from April.
With global terrorism and so many problems in the Middle
East to be attended to, the US would not want to open a second front over
Taiwan if that could be avoided. That is
a reason for us to be cautiously optimistic about cross-straits
relations provided
China does not overplay its hand and the Taiwanese government is not reckless.
Sino-US Relations
Looking ahead, the good management of Sino-US relations is
central to continuing peace and economic development in the Pacific. Institutions like Harvard and meetings such
as this help to promote greater mutual understanding. Without the generosity of the US in educating
generations of bright young Asians in American colleges and universities, the
Asian transformation we are seeing today would not have happened. When I first received the ballot slip to vote
for the Overseers of Harvard University, it came as a pleasant surprise. Only US institutions would be prepared to
enfranchise foreign alumni in this remarkable way. There is no necessary conflict between the US and China of
the sort which characterised US relationship with the
Soviet Union, although there will always be problems which have to be managed.
Despite the problems of North Korea and Taiwan, and the
continuing challenge of extremist Islam, there is great hope then. The continuing economic development of China
and the rest of Asia can usher in a new age of opportunity for countries around
the world.
*****