Thursday, 19 June 2008

Asia's grand old man is still as sharp as ever

Lee Kuan Yew is one of the great figures in Asia. In this short interview with NPQ magazine he covers a range of topics that show he has lost none of the intellectual acuity that marked his prime ministership. What is particularly interesting is his reference to a Chinese-made TV series on the rise of the great powers - the Europeans, Russians and Japanese. It gives an insight into how China sees itself.
Lee Kuan Yew, the founding prime minister of Singapore and the "grand old man of Asia" at 84, is now minister mentor in Singapore. He talked recently with UCLA professor and columnist Tom Plate and Jeffrey Cole of the Annenberg Center of the University of Southern California.

NPQ - You said some years ago that America must get the relationship with China right, because that benefits everybody in Asia. And if it's not gotten right, it's going to create problems. Has the US more or less gotten the relationship right?

Lee Kuan Yew - I think it's not bad. Congress is in a fractious mood, looking for excuses for what's gone wrong, believing China's exchange rate offers unfair advantage. Yes, the Chinese should up the value of their yuan -- maybe 10 percent, 15 percent -- but it's not going to help. It's not going to solve the problem. It might create problems for them if they do it so suddenly. But if they do it gradually, as I think they will, it shouldn't be a problem.

Looking ahead a bit, the Chinese are scared of unemployment, they're scared of what happened to Japan when the factories relocated. They need their low-end jobs, making shoes and garments. If these factories move out and there are people without jobs -- that's a real problem for them. Moving up-market to higher-value production is a new game for the Chinese, and they're nervous. The legitimacy of the authorities depends upon solving the economic problems and not having riots in the cities even as their old state-owned enterprises retrench.

NPQ - Does America have to fall as China rises?

Lee - No, I do not see a win-lose, zero sum game here. It was the US that brought China into the (World Trade Organization). It was George H.W. Bush who opened the door, inviting China to start selling to America. That was carried on by President Clinton who helped bring the Chinese into the WTO.

American has two choices with China -- to keep them out or let them in. If you keep them out, then you have them as a spoiler. They're going to do reverse engineering and steal your patents. Where is the profit in that? If you slow down their transformation you are not going to benefit from that transformation.

Back in 1980s and early '90s, America needed the Chinese market to grow,but never factored in the speed at which they would grow. That's scary because it has created enormous problems -- disparity within the cities, between the cities and the countryside. And now with cell phones and satellite TV, everyone sees everything. So they have to change track. Instead of just going helter-skelter for gold. Now they're talking about achieving a harmonious society.

NPQ - Do you still see China continuing in the opening-up direction?

Lee - Their problem now is convincing the world that they're serious about a "peaceful rise." The leadership in China are thinking people. You're not dealing with ideologues.

I was struck by the recent broadcast on Chinese TV of the series The Rise of Great Nations. In my view, it was a bold decision on the part of the Chinese leadership to suggest to the Chinese people the lessons from what made the Europeans, the Russians and Japanese great.

The episode on Britain is quite interesting. The theme was the importance of doing away with the divine right of kings, about how the monarchy was challenged by the barons who brought the king down. And it was about the Magna Carta. Suddenly, "divine right" is vested in the people through the parliament, an no longer in the monarchy, leading to the emergence of the middle class. When Charles I got uppity, he was beheaded.

Now,this series was produced in a communist state! It suggested that, if you want to be a great nation, you must behead the leader if he goes against the people!The key to becoming a great nation, this episode made clear,was growing confidence between the people and the leaders.

I gather that the whole point of this TV series was as a public lesson to support China's gradual opening up without causing conflict -- the "peaceful rise." They have worked out this scheme, this theory, this doctrine to assure America and the world that they're going to play by the rules.

NPQ - Will they be able to do that fast enough to accommodate the middle class who want clean air and so much else?

Lee - My guess is they're going to move pragmatically one step at a time.

The policy will be "Let's grow, let's have more equality in the country and keep the country united. Let's have no trouble abroad. Let's make quite sure that Taiwan doesn't do stupid things which will force the mainland to act. Let's have a successful Olympics and then we are into a new age, one step at a time."

On the environment, the first problem is blue skies for the Olympics. During the 50th anniversary of the founding of modern China in 1999, they cleaned up the air in Beijing by stopping all factories for two weeks. I think they'll do that for four weeks before the Olympics, including cutting down the number of cars that can enter the city by half.

Of course, cleaning up properly, retrofitting coal mines, recycling water and the like, will take umpteen years. It will be a very costly and slow business. They are working with Singapore to create a sustainable, EcoCity. They want to learn. That's important.

NPQ - Since you've been a friend of America over decades, what are two or three things that you worry about in America?

Lee - I think the next 10 years you have got to extricate yourself from these problems in the Middle East. It may take you five years to get it stabilized and then after that, you gradually have more time and energy to think about the other big problems in the world.This is sucking up too much of your resources.

To solve this, you have got to tackle the two-state problem in Israel. As long as that's festering away, you're giving your enemies in the Muslim world an endless provocation from which they can get new recruits for crazy adventures to try and knock you down by blowing themselves, or trying to blow the world up.

NPQ - What about inside America itself?

Lee - For the next 10 to 20 years you will keep going as the most enterprising, innovative economy with leading-edge technology, both in the civilian and military fields. You will lose that gradually unless you are able to keep on attracting talent. That's the final contest. Because of the path you have blazed, the Chinese and other nations are going to successfully adopt parts of it to fit their circumstances.

They are also going around looking for talented people who can build up innovative, enterprising economies. After all, this is now an age where you will not have military contests between great nations because you will destroy each other. But you will have economic and technological contests between the great powers. I see that as the main arena of competition by 2040, 2050.

But long-term for America -- projecting another 100 years -- whether you stay on top depends upon the kind of society you will be. If the present trends continue, you'll have a Hispanic element in your society that's about 30, 40 percent. The question is whether you make the Hispanics Anglo-Saxons in culture, or whether they make you more Latin American in culture.

If they came in drips and drabs and are scaterred across America, then you will change their culture. But if they come in large numbers, like Miami or in California, then their culture will continue and they may well affect the Anglo-Saxon culture around them. That's the real test.

The Chinese won't have this problem. The number of Chinese Hans is so great they can absorb any number of new migrants. If they just stay with their "peaceful rise" and they just contest for first position economically and technologically, they cannot lose. If they are not number one, they will be number two. If they are not number two, they are number three. They have figured that out.

NPQ - China has not given up hope in terms of trying to control the content on the Internet. But is this new technology going to overwhelm efforts to control it?

Lee - Right, it is not possible (to control it). Look, if you are going to have a PDAthat is also running video you can have your servers blocked. But if you've got a 3G phone, you use another server, and so then you are through. It's already happening. Otherwise, how did you get all these pictures of the monks in Myanmar or Yangon or Mandalay coming out? It's all on cell phones.

NPQ - Is it plausible to ask China to work behind the scenes, as it did at the six-party talks involving North Korea, to help move Myanmar out of the Middle Ages and into the real world?

Lee - I'm not sure the Chinese have got that power. And in Myanmar, these are rather dumb generals when it comes to the economy.

How can they so mismanage the economy and reach this stage when the country has so many natural resources? It's stupid.

I do not believe that the generals in Myanamar can survive indefinitely. Look, the day they decided to close down the government in Yangon and go into this new government zone called Pyinmana, where there's nothing, and they are putting up expensive buildings for themselves and a golf course. And then, one of the top generals had a lavish wedding for his daughter, which was then posted on YouTube. The daughter looked like a Christmas tree! Flaunting these excesses must push a hungry and impoverished people to revolt.

What will happen, I don't know because the army has got to be part of the solution. If the army is dissolved, the country has got nothing to govern itself with because they have dismantled all administrative instruments.
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