Opening Remarks by Mr Ho Kwon Ping, Conference Chairman of Singapore Summit, at the Singapore Summit, on 15 September 2018, at 9.00a.m. at Shangri-La Hotel, Singapore
Good morning, distinguished guests and friends, old and new.
1. On behalf of the Singapore Economic Development Board, the Monetary Authority of Singapore, GIC, and Temasek, I would like to welcome all our returning as well as first-time participants to the seventh edition of the Singapore Summit, a gathering of business and thought leaders from Asia and around the world.
2. It is good to see many familiar faces. A particular friend of this Summit is Mr George Yeo who was its Chairman for the first five years. George was not able to join us last year, but he is with us today and we look forward to his participation in today's opening plenary session.
3. So - how shall we assess the past year?
4. First, the good news: the global economy remains robust; with the United States (US) stock market surpassing its historical peak.
5. The not-so-good news is that other capital markets are tanking; and a decade-long period of low interest rates is ending.
6. The bad news is that the gathering storm clouds of a spreading trade war, increasing Chinese assertiveness, and rapidly declining prestige of the US globally, are darkening the geopolitical sky.
7. What seemed to be possibly a short-term aberration when we met last year seems now to be the start of an epochal change in civilisational relationships. But whereas the horizon was cloudy last year, today we can perhaps discern two distinct trends.
8. One is the accelerating but hopefully not yet terminal decline of democratic liberalism as the dominant ideology of the post-war global order. The second is the transition, at least in the Asian region, from Pax Americana to Pax Sinica.
9. And the interaction of these two trends, like tectonic plates grinding inexorably against each other, will determine whether there will be peaceful or cataclysmic geopolitical change for the rest of this century.
10. Liberal democracy and its major outcome, the globalisation of the movement of both capital and labour, are facing its most serious existential threat since the end of the Cold War a half century ago.
11. The angry dissonance which spewed out from the excesses of financial capitalism and the inequalities of globalisation has not faded. Indeed, it has found stronger organisational vigour and connectivity with far-right, populist movements and governments in Austria, Spain, Italy, Hungary - the list goes on.
12. Almost unimaginable a year ago, the staunchly centrist or social democratic governments of Germany or Sweden are besieged by far-right political parties.
13. Ironically, the continued unravelling of liberal democracy in the past year has shown that the most serious challenge is not external, from either ultranationalistic populism in the West, or a dynamic, authoritarian state capitalism from China. It is from within - the failure of intellectually and morally exhausted liberal democracies to offer a compelling, practical, and sustainable alternative to far-right populism.
14. A decade after the global financial crisis, cynicism is growing about the determination, or indeed, even the ability of global elites to reform a system which exacerbates inequalities. Disparities in the rate of wealth creation and income differentials continue to significantly favour the top one per cent - who own more than half of global wealth, and whose incomes are growing at double the rate of the bottom half of mankind.
15. Pax Americana and liberal democracy are at a frail and dangerous crossroads; will they somehow find the will to reinvent themselves, or instead become relics of the past, with today's leaders in liberal democracies complicit and complacent in their own demise?
16. These issues will be discussed in our first session, entitled: "The Shifting Business Landscape: Overcoming Disruptions in the Globalised World".
17. The second session, "Navigating Geopolitical Risks and Challenges in the Asia-Pacific", tightens the focus specifically to the Asia-Pacific region, or what the Americans now like to call the Indo-Pacific region. The single most important trend here is the slow but relentless emergence of what I call a Pax Sinica.
18. Most Western views of China have been conditioned by the 20th century world order, which views the world through the lens of a largely American perspective. What is good for the US is good for the rest of the so-called free world.
19. In large part, America has legitimately and deservedly won this trust. Not only did it lead the Allies in winning WWII, but in the creation of the subsequent Pax Americana - a polite euphemism for hegemony - the US guaranteeing by political and military might, the sovereignty, security, and stability of countries willing to subscribe to a Pax Americana.
20. This lasted for some 70 years but possibly not past the next century. Not only because America's global leadership is being seriously eroded from within by its own President, but because current Chinese policy has taken a more overtly nationalistic turn.
21. For the past few decades when its ascendancy was still uncertain, China was content to tone down its assertiveness. Chinese leaders preached more coexistence and cooperation than confrontation and competition. No more.
22. Just as the word crisis (wei ji in Chinese) combines the term for danger as well as opportunity, China's new view is that the current crisis in US-China relations is the time to claim, and for the world to acknowledge, China's long-thwarted civilisational ambitions.
23. A Pax Sinica will be underpinned by economic and military power, but led by a sustainable and singular vision of its destiny. Made in China 2025 is an extremely ambitious, audacious, and yet realistic road map for China to attain global rank or even supremacy in ten high-tech, critical fields of human endeavour, including artificial intelligence and climate change technologies.
24. Even conservative estimates predict that within 20 years, the overall Chinese economy will be about one-third larger than that of the US economy. But because on a per capita basis it will still be less than half that of America's, there remains a lot of room for the Chinese economy to grow before reaching developed-world slowdown.
25. In 1998, Chinese military spending overtook that of Russia's. Today, it is double that of Russia's and two-thirds that of the US'. Reaching military parity will take longer than 20 years, but it is within sight of medium-term strategic planners in both countries.
26. To advocates of the current world order where the US is the ultimate global peacekeeper and policeman, Pax Sinica may sound sinister and at best a hidden form of Chinese imperialism.
27. To the Chinese however - and every Chinese person has a keen sense of history - Pax Sinica is a legitimate reversion to its centuries-old, historically validated role - and there have been previous Pax Sinicas during the period of Han China about 2,000 years ago, or Tang China about 1,000 years ago.
28. These were in fact the golden eras in Chinese history, when China was an open, cosmopolitan and enlightened civilisation exercising more soft than hard power to become the dominant player in Asia.
29. The point that a newly nationalistic and assertive China wants to make to the world and particularly its neighbours, is a nuanced one.
30. On one hand, Pax Sinica, even from centuries ago, did not have territorial conquest as one of its aspirations. Chinese historians and policymakers frequently allude to the difference between the Chinese concepts of a China-centric hegemony to the Western notion of territorially expansive empires.
31. In their view, the Belt and Road Initiative which is a foundational component of Pax Sinica, has its origins in the China of Marco Polo, where building connectivity was more important than seizing territory.
32. On the other hand, while it eschews territorial conquest, China clearly wants to be recognised as the primary power in Asia - the first among equals.
33. After all, just as American interests have always dictated that the Western hemisphere is within the US' sphere of influence, then by the same token a Pax Sinica will not allow the US to claim the role of policeman in China's backyard, the South China Sea.
34. As an example, China recently signed an agreement with ASEAN to establish a Code of Conduct for the South China Sea, but clearly without US patronage or involvement.
35. Opponents of a Pax Sinica point out however, that American predominance in East Asia is at the overt and official invitation of Japan, Taiwan, South Korea and other countries. China will have to convince detractors that its emergence, from its own convulsive internal chaos of the Cultural Revolution only a few decades ago, will not relapse, and that its status of a global superpower is deserving of the trust and respect of the world.
36. Its record as a responsible global player in climate change, financial services or regional infrastructural investments, is growing rapidly. But in other areas it still has to convince sceptics that a Pax Sinica will be at least as benign as Pax Americana.
37. China will also have to contend with deep-rooted wariness from Japan and Vietnam, and assure the world community that the One-China policy vis-à-vis Taiwan will be resolved peacefully. These assurances will have to be proven by not just words but also action in coming years.
38. But whether the world likes it or not; whether it will be total or partial; some kind of Pax Sinica is clearly in the offing. A civilisation as old, as continuous, and as resurgent as China, has a sense of its destiny which is more than just another Asian nation, and certainly not what the West has in mind.
39. ASEAN will need to navigate within this still vaguely conceived, much less executed Pax Sinica with considerable skill, subtlety, and knowledge of the importance of nuanced signalling and actions. As China's smaller neighbours for thousands of years, ASEAN has to recognise the reality of being within China's sphere of influence, but without ever surrendering its sovereignty or subordinating its own vital national interests.
40. Speaking truth to power; maintaining a constructive neutrality; and adopting policies which are in both ASEAN's and China's core interests, are some principles which ASEAN countries should uphold even as a Pax Sinica emerges over the next century.
41. The third session, "Southeast Asia: Rise of the Digital Economy and a Single Consumer Market", looks at ASEAN from a brighter perspective. With a combined Gross Domestic Product of US$2.6 trillion, ASEAN will become the world's fourth largest market by 2030. Its middle class is fast approaching 400 million people spending over US$200 billion a year in the Internet economy.
42. What specific opportunities can we identify? Is there a single dominant ASEAN consumer profile emerging? How will the digital economy allow ASEAN to leapfrog phases of development? Our panellists will tackle these questions.
43. The fourth and final session is titled "Big Tech and the Well-Being of Consumers, Businesses and Society". It rounds off our geographically oriented sessions by pulling back and looking at a global theme. With recent scandals enveloping the monopolistic as well as privacy-threatening behaviour by a handful of global Internet-based firms, Big Tech is now pilloried as the handmaidens of a 1984-style dystopia.
44. What possible alternative perspectives are viable, and what is the balance between regulation and an unfettered Big Tech dominance of global information? What innovative new platforms may in fact be on the horizon?
45. All these issues will be discussed by our distinguished panellists and we welcome your active participation.
46. Another set of active participants are the Young Societal Leaders - 22 young leaders from 11 countries and representing a diverse range of interests. Last year, their participation not only considerably lowered the average age of our attendees, but also deepened and broadened the Summit's intergenerational engagement. Two Young Societal Leaders will speak at the luncheon plenary session on corporate social responsibility.
47. We are also honoured to have Datuk Seri Anwar Ibrahim, Chief of Pakatan Harapan Coalition and President (Elected) Parti Keadilan Rakyat in Malaysia, speak to us at the S Rajaratnam Endowment Dialogue before the close of the conference. I hope all of you will participate actively in the discussions today, and in the process also learn from each other.
Thank you, and enjoy the rest of the day.