29 Sep 2016 13:38
Prime Minister Lee Hsien Loong speaking at the Nikkei conference in Japan. (Photo: Linette Lim)
TOKYO: The Asia Pacific region is entering a period where countries must navigate both major geopolitical shifts and difficult internal conditions, said Prime Minister Lee Hsien Loong on Thursday (Sep 29).
Under these challenging conditions, countries can only succeed by strengthening cooperation instead of turning inward, said Mr Lee, adding that this is especially important for key players like Japan, which influence the tone for the region.
The Prime Minister was speaking at a special session of a conference on “The Future of Asia”, organised by Nikkei and the Japan Center for Economic Research. In his address, he discussed China, Japan, and the US, laying out his view of the roles the world’s top three economies play in Asia Pacific, and their relationship with each other.
CHINA’S NEW ROLE IN THE WORLD
Pointing out that China is the currently biggest trading partner of Japan, and almost every ASEAN country, Mr Lee acknowledged that China’s rise has contributed greatly to the prosperity of the world.
But he noted that China’s rise also requires every country to make major adjustments, and this calls for restraint and wisdom by all sides, adding that “such a major shift in the strategic balance will not happen effortlessly”.
“China itself has to adjust to its new role in the world, and take on new responsibilities as an emerging major power. China has started to do some of this, as shown by China’s growing contributions to UN peacekeeping operations, and their early ratification of the Paris Agreement on climate change,” said Mr Lee.
“At the same time, China should be mindful of the natural unease and apprehension that its rapid rise elicits in its neighbours and other powers. It should act in such a way as to demonstrate that it is committed to building win-win relationships with other countries, and that while it seeks to revise existing frameworks and rules, it is not about to overturn the established international order which it has itself benefited from.”
IMPLICATIONS FOR SMALLER COUNTRIES, MAJOR POWERS
Smaller countries will have to take the policies and interests of an emerging major player more into their calculations, while other major powers should accommodate the legitimate interests of a growing China, according to Mr Lee.
Smaller countries like Singapore, he said, can benefit from new opportunities in trade and economic cooperation with China, for example through the Asian Infrastructure Investment Bank and the “One Belt, One Road” initiatives.
Meanwhile, other major powers should accommodate the legitimate interests of a growing China.
“China wants more influence over global developments, like other major powers. It will increase its contributions to international cooperation, in accordance with its capabilities and resources and interests, and in the hope of having more say at institutions such as the UN, IMF and World Bank,” he said, adding that these aspirations need to be recognised and given due weight and consideration by the other powers.
EXTERNAL PEACE AND STABILITY IS IN CHINA’S INTEREST
Turning to regional disputes, Mr Lee said that these have to be expected because each country has its own national interests to protect. He cited the territorial and maritime disputes in the South China Sea and the East China Sea as an example.
But all sides have a vested interest in reaching a new and workable balance, and in minimising conflict, he said, noting that if countries fail to work together, they are not just losing opportunities to prosper together, but are also putting at serious risk all that they have achieved.
He added that ultimately, a stable external environment is eminently in China’s interest.
“China’s prosperity depends on other countries too. Despite its size, China is not self-sufficient, and cannot be. On its own, minus access to world markets, foreign technology or MNC investments, China will be much poorer off. Furthermore, external peace and stability will allow China to focus on its domestic challenges, which are considerable,” he said.
CHINA FACES SERIOUS DOMESTIC CHALLENGES
China’s present challenges are pressing, and will involve difficult trade-offs and risks, noted Mr Lee.
“The low wage, export-driven model of growth is reaching its limits. The environmental impact has become enormous. There are growing demands to improve public services, and the population is rapidly ageing. Tackling these requires China to address fundamental issues like economic restructuring, social reform, political evolution,” he said.
“We therefore cannot extrapolate from the last 30 years of China’s transformation, and assume another 30 years of equally spectacular change. Instead we should see China as a country with a very successful economy, but one which also has its share of challenges and constraints, like everybody else. Its outlook is promising, but its path to continued success is not a linear one.”
Mr Lee also pointed out that Chinese leaders have realistically acknowledged that the country has entered a “new norm”. “They are clearly mindful of the challenges ahead, but appear determined and confident to tackle the structural, social and economic changes that China needs to achieve its growth objectives,” he said.
“We certainly hope that China will succeed. This is because a stable and prosperous China conscious of its weight and responsibilities, moving forward on a path of peaceful development, will greatly benefit the Asia Pacific, and bode well for the world.”
WHERE DOES JAPAN FIT IN?
Against the current backdrop, Mr Lee said he believes Japan has an important role to play.
He expressed his hope for Japan to succeed in reinvigorating its economy, highlighting that an “economically vigorous Japan is a precondition for sustaining an active role in the Asia Pacific”.
“Japan needs not only domestic reforms, but also to maintain an outward orientation, engaging with the world,” said Mr Lee.
“In a globalised world, countries succeed not just through their own capabilities, but by understanding other countries and cultures, interacting with them, and absorbing talent and ideas from others,” he noted, adding that in recent decades, the number of Japanese students in Ivy League colleges in the US has gone down, while the number of Korean and Chinese students has gone up.
He observed that because Japan does not have the advantage of language on its side, it needs to make a greater effort to expose its people to the world, especially the young.
“If more young Japanese can be exposed to study abroad with the best and brightest from around the world, and then integrated back into Japanese society, bringing with them different perspectives and approaches, this can only enrich and invigorate Japan. Indeed, this is what Japan did in the Meiji Restoration,” he added.
According to Mr Lee, another avenue to strengthen Japan’s outward orientation is through free trade, and this is one reason the Trans-Pacific Partnership (TPP) is such an important initiative for Japan.
“We naturally hope that the TPP clears the Diet… whatever happens in the US. Japan’s decision carries weight, because it is the second largest economy in the TPP-12 and the third largest in the world. We should also welcome China to join the TPP eventually, for the TPP is a pathway to free trade in the Asia Pacific,” he said.
Mr Lee also talked about his hope for Japan to continue to play an active and constructive role in Asia, especially Southeast Asia.
“In 1977, Prime Minister Fukuda stated the Fukuda Doctrine, committing Japan to peace, and to cooperating as an equal partner of the ASEAN group and ASEAN member countries. This was at a crucial moment in ASEAN’s development. The Vietnam War had just ended, and for many ASEAN countries, the future looked extremely uncertain. Japan’s economy was then growing vigorously,” he said, adding that the Fukuda Doctrine and Japanese foreign direct investments made a tremendous impact on Asian growth.
“But after 1990, as Japan experienced protracted economic troubles, your attention understandably turned to domestic matters,” said the Prime Minister, acknowledging that in spite of the fact, Japan remains an important player with great influence.
JAPAN’S RELATIONSHIP WITH CHINA, US
Mr Lee also said he wanted to see Japan have stable and peaceful relations with its neighbours and big powers, in particular with China and the US.
“We are fortunate that Northeast Asia has been at peace – or at least has not been at war – since the Korean War ended more than 60 years ago. But if the peace is shaken, either because territorial disputes escalate out of control, or because tensions on the Korean peninsula destabilise the region, it will be big trouble. All the issues at stake in the various disputes will not be worth the price of war,” he said.
“Till today, China and Japan still have differences, including over the Senkakus or Diaoyu islands. But I hope both countries will work together to manage the disputes and also to pursue opportunities, and not see the relationship as a zero-sum game.”
He added that being simultaneously competitive and cooperative, the Japan-China relationship will require effort and accommodation on both sides.
“Therefore, I welcome the recent meeting between President Xi Jinping and Prime Minister Abe on the sideline of the G20 Summit in Hangzhou. Direct communication is the first step towards mutual understanding and resolution of differences. If both China and Japan work hard at it and avoid mishaps, both will save themselves a lot of problems, and the region will heave an enormous collective sigh of relief.”
He expressed hope that Japan will maintain its strong links with the US.
“The US-Japan Security Alliance has played an important role since the war. The alliance continues to be a cornerstone of regional stability, because it anchors the US in the region, and restrains countries in Northeast Asia from escalating their disputes,” he noted, adding that US nuclear umbrella “mitigates the risk that Japan may be forced to respond to North Korea’s militarisation and nuclear programme, with unforeseeable and dangerous consequences”.
But a military alliance does not exist independent of the overall relationship, he cautioned. “For the US-Japan Security Alliance to endure, there must also be shared and growing interest and partnership between the US and Japan. That is why the TPP is strategically important. It will deepen US engagement with Japan and the region. In turn, America’s continued interest in Asia will enhance Asia’s security and stability, and provide the basis for all countries in the region to grow in peace.”
“If Japan can maintain good relations with your neighbours and the powers, it will make it easier for Japan to advance PM Abe’s Proactive Contribution to Peace policy and also Japan’s Legislation for Peace and Security, within the context of the US-Japan Security Alliance,” he added.
“Singapore supports these initiatives, which call for an inclusive and rules-based regional architecture, and will enable Japan to play a larger role in regional and global affairs.”
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