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China's Growing Might and the Consequences

by Lee Kuan Yew, The Straits Times, Singapore, March 19, 2011

I believe China will need to maintain friendly relations with the US for several decades. China's growth depends on its exports to the US and its imports of American technology...

The countries of the Indian Ocean, South-east Asia and Australasia have established and maintain good relations with China, and though China says it will never seek hegemony over them, it is in their best interest to have a strong US presence in the region. 

CHINA'S steady economic growth of 9 per cent to 12 per cent per annum has continued for more than two decades. China's prosperity has also helped its armed forces grow and become better equipped, with most of their sophisticated weaponry the result of China's own R&D.

The Commander of the US 7th Fleet, Vice-Admiral Scott R. Van Buskirk, has publicly expressed his hope that China will act as a 'responsible and constructive' power. He has also acknowledged that because of the Asia-Pacific region's importance the United States has deployed 60 per cent of its attack submarines to the region and has increased its navy presence to 70 ships, up from 50 to 60 a decade ago.

Looking at China's growth over the last three decades and extrapolating from there, it seems certain that its GDP will overtake that of the US within the next decade or two. It is China's intention to be the greatest power in the world. 
The policies of all governments towards China, especially neighbouring countries, have already taken this into account. These governments are repositioning themselves because they know that there will be consequences if they thwart China when its core interests are at stake. China can impose economic sanctions simply by denying access to its market of 1.3 billion people, whose incomes and purchasing power are increasing.

Will China be peaceful and friendly and abide by the rules of international law and conventions, or will it use its heft to get its way? 

I believe China will need to maintain friendly relations with the US for several decades. China's growth depends on its exports to the US and its imports of American technology. Large numbers of Chinese students are eager to study at US universities and work in American research establishments to gain the knowledge and expertise needed to raise China to US levels.

Even when China surpasses the US in total GDP, it won't be able to revert to the dominance that Han China enjoyed. During that time the Han Dynasty and Rome were the globe's two great powers - but they were worlds apart. Communication and commerce between them were slow and arduous, and neither could extend its influence to the other's immediate region. 

Today people and goods travel by jet aircraft and fast ships, and information is transmitted at the speed of light over the Internet. Moreover, now there are several centres of power in the world, each possessing nuclear weapons.

During the 19th and 20th centuries China experienced political chaos under feuding parties and warlords. It wasn't industrialised and was therefore economically weak. Now it is becoming a giant power. The world hopes the US will remain a counterweight to China. 

No other single country or group of countries, such as the European Union, can fill this role. The countries of the Indian Ocean, South-east Asia and Australasia have established and maintain good relations with China, and though China says it will never seek hegemony over them, it is in their best interest to have a strong US presence in the region. 

But they worry about America's long- term ability to perform this role because of its sluggish economy, high budget deficits, huge total debt and serious unemployment levels, currently at 9 per cent.

The US and Europe are helping India economically to become a regional counterweight to China. For South-east Asians it's reassuring to remember that in recent history no one power has dominated the region. This is where two great civilisations, Indian and Chinese, met - hence the name 'Indochina'. Many ancient monuments and artefacts - Borobudur in Indonesia and Angkor Wat in Cambodia - bear witness to India's past influence and power. With China's modernisation all in the region hope these two giants will remain in friendly competition to win over their neighbours.

Singapore, one of the world's busiest ports, is situated at the southern-most tip of Asia, on the straits through which ships pass when going between India and China. In the 19th century the British East India Company started regularly sending trading ships from Singapore to bring tea from India to China. Since then economic ties, especially investments, between China and South and South-east Asia have grown steadily.

If relations between India and China were to become hostile, the world - and especially the region - would suffer. Tension and instability would deter trade and investment, slowing the region's growth. It is in everyone's best interest for these two behemoths to maintain a stable and amicable relationship.

This article first appeared in Forbes Magazine. Minister Mentor Lee rotates writing this column in the magazine with David Malpass, president of Encima Global LLC; Amity Shlaes, senior fellow at the Council on Foreign Relations; and Paul Johnson, historian.