From Singapore, an Optimistic Forecast
HOUSTON, July 12, 2010 — Prime Minister Lee Hsien Loong of Singapore delivered an upbeat assessment of prospects for growth and stability in East Asia, downplaying lingering effects of the global financial crisis and offering a benign take on China's growing economic and political clout.
"I believe the fundamental transformations in East Asia will continue, and for a long time," the Prime Minister told an audience of 350 at the Hyatt Regency Houston.
Houston Mayor Annise Parker introduced Lee for his luncheon address, which Asia Society Texas Center and Greater Houston Partnership co-hosted and which drew a cross-section of the city's corporate and civic leadership.
After touting East Asia's robust recovery from the economic meltdown of 2007 and 2008, Lee focused on China and suggested that East-West conflicts over trade imbalances and currency valuations will resolve themselves as China transitions from an export-driven economy to one based on growing domestic consumption. Rising wages in China will both drive up the cost of Chinese export goods and expand the market for US products, he said.
"A move in this direction will help manage relations with America and make it easier for Walmart to do business in China or for Halliburton to do business in China and for Chinese companies to trade with America and make it easier to keep the political temperature down," Lee said.
He defended China's hard-nosed approach to caps on CO2 emissions at the 2009 Climate Change Conference in Copenhagen, noting that India, Brazil, and South Africa share China's unwillingness to hobble the growth that raises living standards for its people.
"These are very powerful human needs and trends that no government, whether elected or not, can ignore," he said.
But he predicted that ultimately China will address climate change and adjust its policies accordingly.
"If climate change is going to lead to more typhoons, or more flooding, or glaciers melting and therefore rivers drying up in summer, it will have a major impact on China, as it will on the United States," he said.
"Therefore China and the other countries will need a deal on climate change as much as the rest of the developed world. What deal, how to balance it, who's going to pay for what—these are vexed issues, but we know the need to move in this direction."
China recognizes it can no longer "cultivate obscurity in the world," quietly pursuing its own national interests, Lee said. Other countries reasonably expect an increasingly confident China to shoulder international responsibilities, and the Prime Minister's optimistic tone suggested he thinks China will rise to the challenge.
"Yes, China will defend its own interests—every country is entitled to do that—but other countries expect China to be a responsible stakeholder in the international system, practicing give-and-take and helping to tackle international problems.
"No major international problem can be solved without the participation of China. Whether it's global warming, whether it's trade, whether it's nuclear security, China's participation and cooperation are vital."
Reported by Fritz Lanham, Asia Society Texas Center