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Christine Tan (CT): Prime Minister Lee Hsien Loong, good to talk to you.
You're heading to the US this weekend to talk to President Donald Trump next week. It'd be your first visit to the White House under the Trump administration. What do you hope to accomplish during this visit?
Prime Minister Lee Hsien Loong (PM Lee): I hope to develop our relationship with the Trump administration, and with the United States. It's a very sound relationship that's based on the basic strategic congruence of views, about the world, about the region. And deep co-operation over many years, in the economic sphere, trade, investments; in security and defence area, we've trained in the US, the US forces use our facilities, we've fought together in Desert Storm, and now in the coalition against ISIS. So there's, it's a deep and multi-faceted relationship. With the new administration, we've met their principal officers -- Secretary Tillerson, Secretary Mattis, Mr. McMaster and I've met President Trump also, in the G20 in Hamburg. But this is an opportunity to call on him in the White House, meet him formally, and also to meet the officials as well as people in Congress, on the Hill.
CT: Any new deals you're hoping to do, with the US, during your visit?
PM Lee: (chuckle) Well, we're hoping to sign an agreement between SIA and Boeing to buy more aeroplanes.
CT: (laughs) Is that a done deal, you think?
PM Lee: I think that's a done deal.
CT: This is not the first time, like you said, you've met President Trump. You've met him on the side lines of the G20 Summit earlier this year. You and I know he's been called many things. How would you describe him in your own words?
PM Lee: Well I think he's confident of himself, there are things which he wants to do, he has a very set view of the world, and of people. And we will work with him. I mean, he has been elected, he has a mandate from the American voters, and he represents the United States of America.
CT: Well it's been about 10 months since he took office. His election promise of "America First" -- do you get a sense perhaps he's backed down a little from his campaign rhetoric, now that he's had time to settle in?
PM Lee: I think every administration has a settling-in process. And there's always an adjustment, between what you can say during a campaign and what you find are the possibilities and the imperatives when you win the election and you enter the Oval Office. And the Trump administration is not different. Perhaps the adjustment is bigger in this case, because Trump represented such a radically different rethink to so many things which American... policy intelligentsia had considered to be shared conventional wisdom. But, reality and forces of events press down on every president.
CT: But do you worry about America turning inwards?
PM Lee: We have long depended on an America which has got a clear sense of its stakes in the world and how much it depends on the world as well as how much the world and its allies and friends depend on the United States of America, and we hope this will continue.
CT: Nonetheless, since he took office, one of the first things he did was to pull the US out of TPP. Now you've expressed disappointment at the move. Where is TPP minus the US now? Is it still going forward? What's the status?
PM Lee: We're still talking, the 11 remaining members are still discussing how we can take it forward and we hope we'll be able to get somewhere.
CT: Who's taking the lead?
PM Lee: I think all the 11 are. Many of the 11 are quite keen. The trade ministers have been meeting and APEC is coming up soon, so by the time APEC comes up, perhaps there'll be further developments.
CT: Is there anything happening behind the scenes? Whether it's Singapore, ASEAN or Asia that's working to convince the US to re-join the multi-lateral trade pact?
PM Lee: I think the President has made his position quite clear, he's made the formal decision and I think we'll leave it at that, I don't think it is the time yet, to start new initiatives multi-laterally with the United States, perhaps one day the time will come.
CT: With the US pull-out, is it only natural you think that countries like Singapore and ASEAN now pivot more towards China and its Belt and Road initiative to compensate for the US abandoning TPP?
PM Lee: I think we are paying a lot of attention to China one way or the other. They are a big factor in the world, they are successful, they are growing, they want to grow their influence and all the countries in Asia want to be their friend and want to benefit from China's development and success.
The TPP would have enhanced our relations across the pacific as well as the relations and interdependence among all the TPP partners, which included many major economies, the Japanese, the Australian, United States, NAFTA, Canada and Mexico. There's no TPP but the volume of trade nevertheless is substantial and we hope that it will still be able to grow.
CT: Well TPP like you alluded to, really was, under Obama, was US pivot to Asia…
PM Lee: It was, it was part of Obama's policies towards Asia.
CT: Where do you see that relationship now? Is that US Asia pivot still intact?
PM Lee: Well, I am sure the new administration will not use the same word, but I hope they will pay attention to the region because Asia has been a source of strength and prosperity for America. It has many partners here, it has enormous amount of trade here, it has resources from Asia, energy particularly. It has security interest in Asia, and the fact that Asia is stable and prospering and not a troubled part of the world, I think that's a great relief to the United States to say the least.
CT: Can it matter to Asia politically and strategically even though they pulled out of a huge multilateral trade pact like TPP, in other words, they pulled out economically but they still want to be there politically and strategically?
PM Lee: Well, they pulled out of the TPP means that we didn't conclude this deal to have a free trade agreement. It doesn't mean that the existing trade stops, it doesn't mean that investment flows are abandoned. It does not mean that Asians are not travelling to America to work, to study, for tourism or Americans are not all over the region. These are very big stakes we have in each other and which we'll continue. We had hoped that with a TPP that would have given it an extra boost. Well, that's not to be but we have what we have and we'll find other ways to take it forward.
CT: When do you think TPP will come about…Do you have a time frame?
PM Lee: No I think there's, there's a tide in these affairs and if you miss the tide, you may be able to achieve the same objectives one day. It will have to be in a different form, in a completely different way.
CT: But it's delayed in the process.
PM Lee: Yes, of course. It will take several years before you can come back to it, and stars have to come back into alignment.
CT: We know that President Trump is going to visit Asia next month. He will attend APEC and the ASEAN-US Summit. What are the chances of his talks getting hijacked by the North Korean issue?
PM Lee: I'm sure it will be on the agenda, it's very high on the US' agenda, President Trump himself is very seized with it, and ASEAN is also focused on this, although ASEAN's influence on matters must be limited.
CT: We've had a war of words, an exchange of words between President Trump and North Korean leader, Kim Jong Un. Trump has labelled him -- I'm sure you know this -- madman, rocket man -- are you worried about North Korea and its provocations?
PM Lee: I think brinksmanship has been part of the North Korean issue for a long time. I mean, it's part of the game, you... make a threat, you posture, you.... [pause] make a risky move, you hope that the other side will then do something to placate you, or to give you some advantage in exchange for good behaviour, and then after some time it starts again. So it's not the first time, what's different this time is that North Korea has more nuclear weapons, they've conducted more nuclear tests, they're developing their missile technology, particularly the ICBM technology, and so the risks are higher. But the danger is not just the immediate alarms but also the longer term trends, which are set off in Northeast Asia, if things persist in this direction. Because with North Korea going this way, the South Koreans are asking themselves "what can we do?" The Americans have removed their tactical nuclear weapons, from South Korea, now, what do we do? Do we ask the Americans to bring them back? Do we, the South Koreans, think of developing some capability? 60 per cent of South Koreans now think that they should have some kind of nuclear capability. So that's in South Korea. Japan, too, which has a very strong anti-nuclear public stance... sentiment, will be forced to think about the possibilities and the unthinkable, and what may they need to do. And one former defence minister has said recently, "Well perhaps we should ask the Americans to bring their nuclear weapons and put them in Japan." And the government says "No, we shouldn't." But these are thoughts which cannot be completely suppressed and it in fact, it goes that way, and South Korea and Japan go closer to be in nuclear power or actually cross the threshold. It means, different strategic and security balance in Northeast Asia. More risky, more tense, and the Chinese will be very alarmed, and, I don't think they'll make for a safer world. There'll be implications elsewhere in the world.
CT: But from where you sit, do you want the US to have more military involvement here in the region?
PM Lee: Well the US has always had a presence in the region, the Pacific command is one of their major commands around the world, with the 7th Fleet and with the other US Forces based in...
CT: But at a time like this, do you want them more involved militarily?
PM Lee: I think that they're not... well... they'll never have enough military forces from their point of view, of their admirals and their generals. But what is most important is not just the amount of forces you have in theatre, but the political will and the focus and the political direction which is set in Washington, but also in the United States, that, to know that Asia is important to the US, that the US will cultivate its relations with Asia, that the US will continue to contribute to the peace and stability of Asia.
CT: And this is something you want to get out of your visit?
PM Lee: Well it is something which I say on every visit to the US... And it is a message which bears repeating because I think it is the truth, which is not going to change in the short while and which needs to be made a reminder because the US has so many other preoccupations -- domestically and also internationally, in other parts of the world.
Part 2
CT: Prime Minister, earlier on we talked about the US and North Korea. President Trump has long said, and let me quote him, "China is a linchpin to solving the North Korean crisis." How would you respond?
PM Lee: China has a major role to play. They share a border with North Korea, they have very high volumes of trade with North Korea... or at least they are a very big part of North Korea's external trade. And so they have influence over North Korea. But I would not say that the North Koreans will do anything that the Chinese want them to do. Big countries know that small countries can be quite obstreperous.
CT: But from your point of view, do you feel that China should play a bigger role in resolving the nuclear crisis in North Korea?
PM Lee: I think that Chinese have complex calculations to balance. They are living there with a neighbour. They do not want to destabilize the neighbour at the same time. I think they can't be at all happy with the way things are going with nuclear tests and with missile tests. It must worry them a great deal.
CT: Things were a little bit tense last year between Singapore and China over some comments made over the South China Sea. A few months later, you had to deal with the issue of Singapore's military vehicles getting impounded in Hong Kong. Now last month, I know you just returned from a trip to Beijing, where you met with President Xi Jinping and some top Chinese leaders. How would you describe relations with China now?
PM Lee: We are good. We are forward looking. We are two countries and sovereign countries, so there will always be issues where we don't completely see eye to eye. But fundamentally, there are no basic conflicts in our perspectives. And we both wish to do more together bilaterally, and also in the context of ASEAN. Because next year, Singapore is Chairman of ASEAN, and also for these couple of years, Singapore is the ASEAN coordinator for relations with China. So we both want to make the relationship prosper. In fact, there's a lot we are doing together. Singapore has big investments in China, all over, in many of the provinces. And the Chinese are growing their activities in Singapore too. Their banks are here, thousands of Chinese companies are here. With the Belt and Road, I think there is opportunity for them to use Singapore as a base for financing, for regional headquarters, for all sorts of activities. And I see no reason why that shouldn't happen.
CT: So just to be clear, relations between Singapore and China are not strained over differences in the South China Sea?
PM Lee: Every country will have... every pair of countries will have issues where, "I wish you'd agreed with me. You wish I'd agreed with you." But we remain good friends, and it is so with Singapore and the US, it is so with Singapore and the People's Republic of China.
CT: But these issues you've had to deal with China last year - any lessons learned for Singapore?
PM Lee: Well I think we understand each other's position clearer now. Singapore's position has always been...
CT: It wasn't clear before?
PM Lee: It's clear, but events happen, and then we react to events and then the positions have to be restated, clarified. In the case of the South China Sea, our position has always been that we are not the claimant state. We have no claims. So we don't take sides on those claims: who owns which island. But we do have an interest in freedom of navigation in the rule of international law, in the peaceful resolution of dispute, and in ASEAN having a role in an issue which is this important in our neighborhood. And I think that bears repeating.
CT: Let's talk more about what you said about not taking sides, and let me quote you in an article and get your reaction, "The shifting geopolitical climate is making it more difficult for the Lion City to live with a Giant Eagle on one side, and Dragon on the other." Prime Minister, is Singapore in a conundrum?
PM Lee: Well, it's never easy to be a small country next to a big neighbour. If you have one big neighbour only, that's not easy to manage. If you have two big neighbours, well in some ways you have more friends but in other ways you have to make more difficult choices.
CT: But is it getting difficult? To manage that relation between US and China?
PM Lee: We hope that the US ... well, it depends on, it depends on how the US relationship with China develops. If that stays stable and good, then it's easier for Singapore. If that becomes strained or harsher, then it's harder for us.
CT: What do you mean by "harder"? You have to pick a side?
PM Lee: If there are tensions between America and China, we will be asked to pick a side. It may not be directly, but you will get the message that: we would like you to be with us and are you with us. If not, does that mean you're against us? And that's to put it gently.
CT: Which side would you pick?
PM Lee: We hope not to have to pick sides. We have such substantial relations with both. China's our biggest trading partner, America is somewhere near there. And very important partners in many other areas well, including security. We hope we will be able to maintain these relationships.
CT: Well Singapore, like you said, is going to be chair of ASEAN next year. There are some concerns that China is and will lean on Singapore to keep ASEAN calm over the South China Sea. How would you respond?
PM Lee: As chairman, we are not the Commander-in-Chief. We are the honest broker. We are coordinating ASEAN, we are bringing the parties together in order to help to the degree that we can to produce an ASEAN consensus because ASEAN works by consensus. And unless all the countries go along and most of the countries agree, you cannot take an ASEAN position, and that is all the more so in the case of the difficult issue like the South China Sea where the strategic interests of the different ASEAN countries are not entirely the same. Our position as Singapore is not the same as that of the claimant states because we are not a claimant state. The position of a country which is like Laos, which is land-locked and has a border with China, cannot be the same as the position of the Philippines, which is an island nation, an archipelagic nation and has a claim on the atolls and reefs. And if we look at Myanmar, it doesn't even have a shoreline on the South China Sea, it's on the Andaman Sea. So the interests do not all exactly, fundamentally align, and therefore when you make a consensus, that consensus can only be to the degree that these countries do share a common perspective. And as the chairman of ASEAN, we will try and foster the process of coming to such a consensus.
CT: Well still on China, earlier this week, we've had the 19th Communist Party Congress and we have China of course pledging further liberalization of its economy. We know that Singapore is one of the largest foreign investors in China. What are you exploring? What are you working on that could see Singapore playing a bigger role in China's development?
PM Lee: There are the private sector projects which are all over China. We have real estates, we have developments of shopping malls, we have got service apartments, we've got retail, we've got infrastructure, people with power stations, with water treatment plants, waste treatment plants. We've got all kinds of service projects, tourism - so that's on the private sector. On the government side, we have the G2G projects.
CT: Well you've had Suzhou, you've had Tianjin, and you have Chongqing?
PM Lee: We've had Suzhou, we've had Tianjin, now we have Chongqing and Chongqing is the latest and we are working very hard at it. So that's a major focus, and there's a very high level JCBC - Joint Council for Bilateral Cooperation, which is chaired by two deputy prime ministers overseeing it. So that is a major focus of co-operation. But we also have co-operation in the education field, culturally, and many other areas.
CT: So Singapore is well entrenched in China
PM Lee: Trade too; we're talking about an upgrade to our China-Singapore FTA.
CT: Could your next big partnership, big project, involve the One Belt One Road infrastructure project?
PM Lee: Well actually the Chongqing project involves the One Belt One Road because Chongqing is in a Western part of China. It is the beginning of the belt, the Silk Road Economic Belt [as] the Chinese call it, where the railway starts from Chongqing it goes all the way to central Asia and reaches Western Europe. And the specific project which we are pursuing in Chongqing which is called the Southern Corridor is very much linked to One Belt One Road because it starts in Chongqing and what the idea is to develop the rail corridor from Chongqing down to Guangxi Beibuwan, and therefore provide a faster, more economical connection for western China out to the maritime Silk Road and out to the world. So instead of travelling all the way down the Yangtze River to Shanghai and then doubling back and going to Europe, you can just go down to Guangxi, take a ship you're in Singapore, from Singapore's PSA Container Port, you can be in anywhere in the world economically and quickly. So the Chongqing project is very much related to the Belt and Road. In fact, it links up the Belt, which is the land route, and the Road, which is the sea route.
CT: Any more projects like Chongqing?
PM Lee: Well, Chongqing is a very big project, so we'll get this one done first. But there are smaller projects all over China which are prospering and I think will benefit from our good relationship.
CT: Well you've been Prime Minister since 2004, lots of questions about political succession and who's going to be next to lead the country. Can you share with us, what you're doing behind the scenes to find the next Prime Minister?
PM Lee: Well, I've explained this, quite often, and quite publicly that I've assembled a team, a strong team of younger ministers, they have to establish themselves, among themselves, they have to work out their relationships and assess one another, publicly they have to gain the confidence of the public and show the public what they're able to do. And in time I think they'd have to come to a consensus as to who should be leading the team into the next stage. Beyond me. And I, the process has taken some time and we've been bringing in people in every election, 2006, 2011, 2015... So, it's advanced, we'd continue to bring people in to reinforce the team. But, who's to emerge? Well, time will tell, and it's... it cannot be a very long time because the clock ticks and waits for no man.
CT: But from what you know, are you close to finding the next prime minister?
PM Lee: Oh, I think it's very likely that he would be in the cabinet already but which one, well that would take a while to...to account.
CT: Here in Singapore, lots of concerns about technological disruption, impact on jobs, not to mention competition coming from foreign labour. What are you doing to address these issues?
PM Lee: Oh! That has been the subject of a lot of attention... we have the Committee on the Future Economy, chaired by Heng Swee Kiat, finance minister, to develop strategies to deal with these challenges. And the committee has reported and we are now following up to implement the strategies. We're.... facing the same challenges as many other developed countries -- which is that change is rapid, that it's disruptive, that we need to master new technologies and we need to be able to do it with people who are already in the workforce, middle-aged. And not just young people in school. So, getting our education system to produce people with the right skills is an important part of it. And that we've always been doing. But to, upgrade and refresh the skills of people who are already in the workforce so that you can, with confidence, change your career and take up a different job and maintain your employability, be still able to find work -- I think that's something which we have put a lot more emphasis on in recent years. We call it SkillsFuture. And it's not just running courses, but having the framework to have the courses fit into one another and recognised by the employers and to fit in with your work and your career and your training so that it's complementary, and it's not a completely divergent activity.
So that's one important part of it. The other important part of it is to get the industries and the different sectors of the economy up to speed, and to, to cope with the transformation. And you have here, to deal in a very tangible and concrete way with individual industries, individual firms, and not just in a stratospheric, macro, philosophical approach. And you need to have a specific sense for each industry -- what are the skills which are needed, what are the market areas which can be exploited, what are the changes which the companies need to make, how can we help the companies to achieve these changes. And if there has to be some rationalization, how can we help them to shake out and make it less painful.
So we're going industry by industry, with transformation maps. And we're planning to make 23 of these transformation maps -- we've already got a good number of them, and we work closely with the industries to help to make this happen. If you take a laisse-faire approach -- you say "I just fold my hands, the government doesn't know any better, let it all sort itself out." But we don't think that that's the right thing to do and we think that the government has a constructive and... active role to play and we will do that, working with the industry. And fostering the change, rather than obstructing it.
CT: Well, Singapore is expected to grow two to three per cent this year. What is your vision for Singapore beyond that? Can you put forward a compelling vision for Singapore and its next stage of development? Where do you see the city state?
PM Lee: Well, first, we would like to continue to grow. Two to three per cent is by developed countries' standards, is a very significant level. We would like to be able to continue doing that over the next 10, 15 years. And if we can do that for the 10, 15 years, and you can make a very substantial change in the quality of life and standard of living of the population. But, we also measure ourselves against other economies, other societies, other cities. How are other people living? What have they done to improve their lives? Have we been able to do the same or better? And today, I think Singapore is not a bad place to live. If you have to choose a place to work, to bring up your family, to fulfil not just your economic needs but a more satisfying, comprehensive view of what you can do with your life, I think in Singapore you can do a lot of that. There is something you can achieve, not just to feed yourself but more. And in 10 years' time, in 20 years' time, what is that standard which is expected? I'm quite sure that if you look at New York or London or Beijing or Shanghai or Sydney or Mumbai, it will not be what it is today. It will be something new, there will be new technology, there will be new ways of doing things, there will be new aspirations.
CT: But Singapore will be there right on top.
PM Lee: And we want to be there. And our job, the government's job is to help Singapore stay at the top.
CT: Let's talk about the government's job because Singapore has often been described as a nanny state. And if I were to quote your late father, he had a great quote, he said, "If Singapore is a nanny state, then I'm proud to have fostered one." For many, Singapore is already a developed economy. Do you think it still needs a baby-sitter? A nanny?
PM Lee: Well, if you ask the Singaporeans, on the one hand, they'll say let us do our own thing, on the other hand, whenever an issue comes up, they'll ask what the government is doing about it and they have very high expectations of what the government should be doing, which is right because they voted for the government and they expect the government to be able to perform. So we have to keep that balance. No government prospers by saying I don't need to do anything and just by being there, we have made the country thrive. You have to have an idea of what you need to do, what needs to be fixed, what can be improved, what we should now imagine together, which we didn't previously imagine and having thought of it, decide to do it. And that's the government's role.
CT: It's been more than two years since your father, the late Mr. Lee Kuan Yew, passed away. What's life like, for you, post Lee Kuan Yew?
PM Lee: Well. Life goes on. I think Mr. Lee prepared well for the day when he would not be here, and he made sure that Singapore would be able to go on without him. He handed over as Prime Minister in 1990. 25 years before he died. So I think we miss him, we think of him often, we read his old speeches and we say, "well, that's still relevant to us today." The way he puts it still has a ring to it. At the same time, we have to build on that and move forward, because if we just remained with what he had imagined and what he had done and nothing more, I think he'd have been very disappointed.
CT: If he were alive today, what advice do you think he would have given you?
PM Lee: I think he would have said, "Press on, move on. Don't be looking at the rear view mirror. Remember what has happened, understand how you got here, but look forward and press forward."
CT: You can hear his voice in your head?
PM Lee: (laughs) Yes, we can imagine that.
CT: Earlier this year, you had a dispute with your siblings over your father's estate. For many, it was a rare moment in Singapore's politics where something so private involving the founding Lee family is made so public. Have you and your siblings managed to resolve the issue?
PM Lee: Well the matter is in abeyance, I'm not sure if it's solved.
CT: Are you on talking terms with your siblings?
PM Lee: We have not recently communicated.
CT: How are relations with your siblings now? Do you hope to patch up with them?
PM Lee: Well, I think they are where they are. Perhaps one day when emotions have subsided, some movement will be possible. These things take time.
CT: Are you sad?
PM Lee: Yes, of course.
CT: And finally, you have until January 2021 to call the next elections. Could it happen in the next two years?
PM Lee: Yes, of course. Any time.
CT: So we should be prepared.
PM Lee: We always need to be prepared.
CT: As Prime Minister, you said you'd step down after the next election, before you turn 70. You're 65 now. Are you ready to step down in the next couple of years?
PM Lee: I am ready. What I need to make sure of is somebody is ready to take over from me.
CT: Is there somebody in the wings?
PM Lee: Well, as I've said, there are people in the wings. The question is, who it will be and that will need to be decided.
CT: How will you ensure a smooth power transition?
PM Lee: By building up the team so that when I leave, the rest of the team will be able to work and carry things forward. And they're doing that by being hands on, by having responsibility for major policies, by taking charge of...spiky ministries.
CT: But you will still be there behind the scenes?
PM Lee: Well, that's up to the next Prime Minister.
CT: What sort of legacy do you hope to leave behind?
PM Lee: I think that's not for me to say. I'm just trying to do my job day by day.
CT: Prime Minister Lee Hsien Loong, thank you so much for talking to me on CNBC Conversation.
PM Lee: Thank you.
You're heading to the US this weekend to talk to President Donald Trump next week. It'd be your first visit to the White House under the Trump administration. What do you hope to accomplish during this visit?
Prime Minister Lee Hsien Loong (PM Lee): I hope to develop our relationship with the Trump administration, and with the United States. It's a very sound relationship that's based on the basic strategic congruence of views, about the world, about the region. And deep co-operation over many years, in the economic sphere, trade, investments; in security and defence area, we've trained in the US, the US forces use our facilities, we've fought together in Desert Storm, and now in the coalition against ISIS. So there's, it's a deep and multi-faceted relationship. With the new administration, we've met their principal officers -- Secretary Tillerson, Secretary Mattis, Mr. McMaster and I've met President Trump also, in the G20 in Hamburg. But this is an opportunity to call on him in the White House, meet him formally, and also to meet the officials as well as people in Congress, on the Hill.
CT: Any new deals you're hoping to do, with the US, during your visit?
PM Lee: (chuckle) Well, we're hoping to sign an agreement between SIA and Boeing to buy more aeroplanes.
CT: (laughs) Is that a done deal, you think?
PM Lee: I think that's a done deal.
CT: This is not the first time, like you said, you've met President Trump. You've met him on the side lines of the G20 Summit earlier this year. You and I know he's been called many things. How would you describe him in your own words?
PM Lee: Well I think he's confident of himself, there are things which he wants to do, he has a very set view of the world, and of people. And we will work with him. I mean, he has been elected, he has a mandate from the American voters, and he represents the United States of America.
CT: Well it's been about 10 months since he took office. His election promise of "America First" -- do you get a sense perhaps he's backed down a little from his campaign rhetoric, now that he's had time to settle in?
PM Lee: I think every administration has a settling-in process. And there's always an adjustment, between what you can say during a campaign and what you find are the possibilities and the imperatives when you win the election and you enter the Oval Office. And the Trump administration is not different. Perhaps the adjustment is bigger in this case, because Trump represented such a radically different rethink to so many things which American... policy intelligentsia had considered to be shared conventional wisdom. But, reality and forces of events press down on every president.
CT: But do you worry about America turning inwards?
PM Lee: We have long depended on an America which has got a clear sense of its stakes in the world and how much it depends on the world as well as how much the world and its allies and friends depend on the United States of America, and we hope this will continue.
CT: Nonetheless, since he took office, one of the first things he did was to pull the US out of TPP. Now you've expressed disappointment at the move. Where is TPP minus the US now? Is it still going forward? What's the status?
PM Lee: We're still talking, the 11 remaining members are still discussing how we can take it forward and we hope we'll be able to get somewhere.
CT: Who's taking the lead?
PM Lee: I think all the 11 are. Many of the 11 are quite keen. The trade ministers have been meeting and APEC is coming up soon, so by the time APEC comes up, perhaps there'll be further developments.
CT: Is there anything happening behind the scenes? Whether it's Singapore, ASEAN or Asia that's working to convince the US to re-join the multi-lateral trade pact?
PM Lee: I think the President has made his position quite clear, he's made the formal decision and I think we'll leave it at that, I don't think it is the time yet, to start new initiatives multi-laterally with the United States, perhaps one day the time will come.
CT: With the US pull-out, is it only natural you think that countries like Singapore and ASEAN now pivot more towards China and its Belt and Road initiative to compensate for the US abandoning TPP?
PM Lee: I think we are paying a lot of attention to China one way or the other. They are a big factor in the world, they are successful, they are growing, they want to grow their influence and all the countries in Asia want to be their friend and want to benefit from China's development and success.
The TPP would have enhanced our relations across the pacific as well as the relations and interdependence among all the TPP partners, which included many major economies, the Japanese, the Australian, United States, NAFTA, Canada and Mexico. There's no TPP but the volume of trade nevertheless is substantial and we hope that it will still be able to grow.
CT: Well TPP like you alluded to, really was, under Obama, was US pivot to Asia…
PM Lee: It was, it was part of Obama's policies towards Asia.
CT: Where do you see that relationship now? Is that US Asia pivot still intact?
PM Lee: Well, I am sure the new administration will not use the same word, but I hope they will pay attention to the region because Asia has been a source of strength and prosperity for America. It has many partners here, it has enormous amount of trade here, it has resources from Asia, energy particularly. It has security interest in Asia, and the fact that Asia is stable and prospering and not a troubled part of the world, I think that's a great relief to the United States to say the least.
CT: Can it matter to Asia politically and strategically even though they pulled out of a huge multilateral trade pact like TPP, in other words, they pulled out economically but they still want to be there politically and strategically?
PM Lee: Well, they pulled out of the TPP means that we didn't conclude this deal to have a free trade agreement. It doesn't mean that the existing trade stops, it doesn't mean that investment flows are abandoned. It does not mean that Asians are not travelling to America to work, to study, for tourism or Americans are not all over the region. These are very big stakes we have in each other and which we'll continue. We had hoped that with a TPP that would have given it an extra boost. Well, that's not to be but we have what we have and we'll find other ways to take it forward.
CT: When do you think TPP will come about…Do you have a time frame?
PM Lee: No I think there's, there's a tide in these affairs and if you miss the tide, you may be able to achieve the same objectives one day. It will have to be in a different form, in a completely different way.
CT: But it's delayed in the process.
PM Lee: Yes, of course. It will take several years before you can come back to it, and stars have to come back into alignment.
CT: We know that President Trump is going to visit Asia next month. He will attend APEC and the ASEAN-US Summit. What are the chances of his talks getting hijacked by the North Korean issue?
PM Lee: I'm sure it will be on the agenda, it's very high on the US' agenda, President Trump himself is very seized with it, and ASEAN is also focused on this, although ASEAN's influence on matters must be limited.
CT: We've had a war of words, an exchange of words between President Trump and North Korean leader, Kim Jong Un. Trump has labelled him -- I'm sure you know this -- madman, rocket man -- are you worried about North Korea and its provocations?
PM Lee: I think brinksmanship has been part of the North Korean issue for a long time. I mean, it's part of the game, you... make a threat, you posture, you.... [pause] make a risky move, you hope that the other side will then do something to placate you, or to give you some advantage in exchange for good behaviour, and then after some time it starts again. So it's not the first time, what's different this time is that North Korea has more nuclear weapons, they've conducted more nuclear tests, they're developing their missile technology, particularly the ICBM technology, and so the risks are higher. But the danger is not just the immediate alarms but also the longer term trends, which are set off in Northeast Asia, if things persist in this direction. Because with North Korea going this way, the South Koreans are asking themselves "what can we do?" The Americans have removed their tactical nuclear weapons, from South Korea, now, what do we do? Do we ask the Americans to bring them back? Do we, the South Koreans, think of developing some capability? 60 per cent of South Koreans now think that they should have some kind of nuclear capability. So that's in South Korea. Japan, too, which has a very strong anti-nuclear public stance... sentiment, will be forced to think about the possibilities and the unthinkable, and what may they need to do. And one former defence minister has said recently, "Well perhaps we should ask the Americans to bring their nuclear weapons and put them in Japan." And the government says "No, we shouldn't." But these are thoughts which cannot be completely suppressed and it in fact, it goes that way, and South Korea and Japan go closer to be in nuclear power or actually cross the threshold. It means, different strategic and security balance in Northeast Asia. More risky, more tense, and the Chinese will be very alarmed, and, I don't think they'll make for a safer world. There'll be implications elsewhere in the world.
CT: But from where you sit, do you want the US to have more military involvement here in the region?
PM Lee: Well the US has always had a presence in the region, the Pacific command is one of their major commands around the world, with the 7th Fleet and with the other US Forces based in...
CT: But at a time like this, do you want them more involved militarily?
PM Lee: I think that they're not... well... they'll never have enough military forces from their point of view, of their admirals and their generals. But what is most important is not just the amount of forces you have in theatre, but the political will and the focus and the political direction which is set in Washington, but also in the United States, that, to know that Asia is important to the US, that the US will cultivate its relations with Asia, that the US will continue to contribute to the peace and stability of Asia.
CT: And this is something you want to get out of your visit?
PM Lee: Well it is something which I say on every visit to the US... And it is a message which bears repeating because I think it is the truth, which is not going to change in the short while and which needs to be made a reminder because the US has so many other preoccupations -- domestically and also internationally, in other parts of the world.
Part 2
CT: Prime Minister, earlier on we talked about the US and North Korea. President Trump has long said, and let me quote him, "China is a linchpin to solving the North Korean crisis." How would you respond?
PM Lee: China has a major role to play. They share a border with North Korea, they have very high volumes of trade with North Korea... or at least they are a very big part of North Korea's external trade. And so they have influence over North Korea. But I would not say that the North Koreans will do anything that the Chinese want them to do. Big countries know that small countries can be quite obstreperous.
CT: But from your point of view, do you feel that China should play a bigger role in resolving the nuclear crisis in North Korea?
PM Lee: I think that Chinese have complex calculations to balance. They are living there with a neighbour. They do not want to destabilize the neighbour at the same time. I think they can't be at all happy with the way things are going with nuclear tests and with missile tests. It must worry them a great deal.
CT: Things were a little bit tense last year between Singapore and China over some comments made over the South China Sea. A few months later, you had to deal with the issue of Singapore's military vehicles getting impounded in Hong Kong. Now last month, I know you just returned from a trip to Beijing, where you met with President Xi Jinping and some top Chinese leaders. How would you describe relations with China now?
PM Lee: We are good. We are forward looking. We are two countries and sovereign countries, so there will always be issues where we don't completely see eye to eye. But fundamentally, there are no basic conflicts in our perspectives. And we both wish to do more together bilaterally, and also in the context of ASEAN. Because next year, Singapore is Chairman of ASEAN, and also for these couple of years, Singapore is the ASEAN coordinator for relations with China. So we both want to make the relationship prosper. In fact, there's a lot we are doing together. Singapore has big investments in China, all over, in many of the provinces. And the Chinese are growing their activities in Singapore too. Their banks are here, thousands of Chinese companies are here. With the Belt and Road, I think there is opportunity for them to use Singapore as a base for financing, for regional headquarters, for all sorts of activities. And I see no reason why that shouldn't happen.
CT: So just to be clear, relations between Singapore and China are not strained over differences in the South China Sea?
PM Lee: Every country will have... every pair of countries will have issues where, "I wish you'd agreed with me. You wish I'd agreed with you." But we remain good friends, and it is so with Singapore and the US, it is so with Singapore and the People's Republic of China.
CT: But these issues you've had to deal with China last year - any lessons learned for Singapore?
PM Lee: Well I think we understand each other's position clearer now. Singapore's position has always been...
CT: It wasn't clear before?
PM Lee: It's clear, but events happen, and then we react to events and then the positions have to be restated, clarified. In the case of the South China Sea, our position has always been that we are not the claimant state. We have no claims. So we don't take sides on those claims: who owns which island. But we do have an interest in freedom of navigation in the rule of international law, in the peaceful resolution of dispute, and in ASEAN having a role in an issue which is this important in our neighborhood. And I think that bears repeating.
CT: Let's talk more about what you said about not taking sides, and let me quote you in an article and get your reaction, "The shifting geopolitical climate is making it more difficult for the Lion City to live with a Giant Eagle on one side, and Dragon on the other." Prime Minister, is Singapore in a conundrum?
PM Lee: Well, it's never easy to be a small country next to a big neighbour. If you have one big neighbour only, that's not easy to manage. If you have two big neighbours, well in some ways you have more friends but in other ways you have to make more difficult choices.
CT: But is it getting difficult? To manage that relation between US and China?
PM Lee: We hope that the US ... well, it depends on, it depends on how the US relationship with China develops. If that stays stable and good, then it's easier for Singapore. If that becomes strained or harsher, then it's harder for us.
CT: What do you mean by "harder"? You have to pick a side?
PM Lee: If there are tensions between America and China, we will be asked to pick a side. It may not be directly, but you will get the message that: we would like you to be with us and are you with us. If not, does that mean you're against us? And that's to put it gently.
CT: Which side would you pick?
PM Lee: We hope not to have to pick sides. We have such substantial relations with both. China's our biggest trading partner, America is somewhere near there. And very important partners in many other areas well, including security. We hope we will be able to maintain these relationships.
CT: Well Singapore, like you said, is going to be chair of ASEAN next year. There are some concerns that China is and will lean on Singapore to keep ASEAN calm over the South China Sea. How would you respond?
PM Lee: As chairman, we are not the Commander-in-Chief. We are the honest broker. We are coordinating ASEAN, we are bringing the parties together in order to help to the degree that we can to produce an ASEAN consensus because ASEAN works by consensus. And unless all the countries go along and most of the countries agree, you cannot take an ASEAN position, and that is all the more so in the case of the difficult issue like the South China Sea where the strategic interests of the different ASEAN countries are not entirely the same. Our position as Singapore is not the same as that of the claimant states because we are not a claimant state. The position of a country which is like Laos, which is land-locked and has a border with China, cannot be the same as the position of the Philippines, which is an island nation, an archipelagic nation and has a claim on the atolls and reefs. And if we look at Myanmar, it doesn't even have a shoreline on the South China Sea, it's on the Andaman Sea. So the interests do not all exactly, fundamentally align, and therefore when you make a consensus, that consensus can only be to the degree that these countries do share a common perspective. And as the chairman of ASEAN, we will try and foster the process of coming to such a consensus.
CT: Well still on China, earlier this week, we've had the 19th Communist Party Congress and we have China of course pledging further liberalization of its economy. We know that Singapore is one of the largest foreign investors in China. What are you exploring? What are you working on that could see Singapore playing a bigger role in China's development?
PM Lee: There are the private sector projects which are all over China. We have real estates, we have developments of shopping malls, we have got service apartments, we've got retail, we've got infrastructure, people with power stations, with water treatment plants, waste treatment plants. We've got all kinds of service projects, tourism - so that's on the private sector. On the government side, we have the G2G projects.
CT: Well you've had Suzhou, you've had Tianjin, and you have Chongqing?
PM Lee: We've had Suzhou, we've had Tianjin, now we have Chongqing and Chongqing is the latest and we are working very hard at it. So that's a major focus, and there's a very high level JCBC - Joint Council for Bilateral Cooperation, which is chaired by two deputy prime ministers overseeing it. So that is a major focus of co-operation. But we also have co-operation in the education field, culturally, and many other areas.
CT: So Singapore is well entrenched in China
PM Lee: Trade too; we're talking about an upgrade to our China-Singapore FTA.
CT: Could your next big partnership, big project, involve the One Belt One Road infrastructure project?
PM Lee: Well actually the Chongqing project involves the One Belt One Road because Chongqing is in a Western part of China. It is the beginning of the belt, the Silk Road Economic Belt [as] the Chinese call it, where the railway starts from Chongqing it goes all the way to central Asia and reaches Western Europe. And the specific project which we are pursuing in Chongqing which is called the Southern Corridor is very much linked to One Belt One Road because it starts in Chongqing and what the idea is to develop the rail corridor from Chongqing down to Guangxi Beibuwan, and therefore provide a faster, more economical connection for western China out to the maritime Silk Road and out to the world. So instead of travelling all the way down the Yangtze River to Shanghai and then doubling back and going to Europe, you can just go down to Guangxi, take a ship you're in Singapore, from Singapore's PSA Container Port, you can be in anywhere in the world economically and quickly. So the Chongqing project is very much related to the Belt and Road. In fact, it links up the Belt, which is the land route, and the Road, which is the sea route.
CT: Any more projects like Chongqing?
PM Lee: Well, Chongqing is a very big project, so we'll get this one done first. But there are smaller projects all over China which are prospering and I think will benefit from our good relationship.
CT: Well you've been Prime Minister since 2004, lots of questions about political succession and who's going to be next to lead the country. Can you share with us, what you're doing behind the scenes to find the next Prime Minister?
PM Lee: Well, I've explained this, quite often, and quite publicly that I've assembled a team, a strong team of younger ministers, they have to establish themselves, among themselves, they have to work out their relationships and assess one another, publicly they have to gain the confidence of the public and show the public what they're able to do. And in time I think they'd have to come to a consensus as to who should be leading the team into the next stage. Beyond me. And I, the process has taken some time and we've been bringing in people in every election, 2006, 2011, 2015... So, it's advanced, we'd continue to bring people in to reinforce the team. But, who's to emerge? Well, time will tell, and it's... it cannot be a very long time because the clock ticks and waits for no man.
CT: But from what you know, are you close to finding the next prime minister?
PM Lee: Oh, I think it's very likely that he would be in the cabinet already but which one, well that would take a while to...to account.
CT: Here in Singapore, lots of concerns about technological disruption, impact on jobs, not to mention competition coming from foreign labour. What are you doing to address these issues?
PM Lee: Oh! That has been the subject of a lot of attention... we have the Committee on the Future Economy, chaired by Heng Swee Kiat, finance minister, to develop strategies to deal with these challenges. And the committee has reported and we are now following up to implement the strategies. We're.... facing the same challenges as many other developed countries -- which is that change is rapid, that it's disruptive, that we need to master new technologies and we need to be able to do it with people who are already in the workforce, middle-aged. And not just young people in school. So, getting our education system to produce people with the right skills is an important part of it. And that we've always been doing. But to, upgrade and refresh the skills of people who are already in the workforce so that you can, with confidence, change your career and take up a different job and maintain your employability, be still able to find work -- I think that's something which we have put a lot more emphasis on in recent years. We call it SkillsFuture. And it's not just running courses, but having the framework to have the courses fit into one another and recognised by the employers and to fit in with your work and your career and your training so that it's complementary, and it's not a completely divergent activity.
So that's one important part of it. The other important part of it is to get the industries and the different sectors of the economy up to speed, and to, to cope with the transformation. And you have here, to deal in a very tangible and concrete way with individual industries, individual firms, and not just in a stratospheric, macro, philosophical approach. And you need to have a specific sense for each industry -- what are the skills which are needed, what are the market areas which can be exploited, what are the changes which the companies need to make, how can we help the companies to achieve these changes. And if there has to be some rationalization, how can we help them to shake out and make it less painful.
So we're going industry by industry, with transformation maps. And we're planning to make 23 of these transformation maps -- we've already got a good number of them, and we work closely with the industries to help to make this happen. If you take a laisse-faire approach -- you say "I just fold my hands, the government doesn't know any better, let it all sort itself out." But we don't think that that's the right thing to do and we think that the government has a constructive and... active role to play and we will do that, working with the industry. And fostering the change, rather than obstructing it.
CT: Well, Singapore is expected to grow two to three per cent this year. What is your vision for Singapore beyond that? Can you put forward a compelling vision for Singapore and its next stage of development? Where do you see the city state?
PM Lee: Well, first, we would like to continue to grow. Two to three per cent is by developed countries' standards, is a very significant level. We would like to be able to continue doing that over the next 10, 15 years. And if we can do that for the 10, 15 years, and you can make a very substantial change in the quality of life and standard of living of the population. But, we also measure ourselves against other economies, other societies, other cities. How are other people living? What have they done to improve their lives? Have we been able to do the same or better? And today, I think Singapore is not a bad place to live. If you have to choose a place to work, to bring up your family, to fulfil not just your economic needs but a more satisfying, comprehensive view of what you can do with your life, I think in Singapore you can do a lot of that. There is something you can achieve, not just to feed yourself but more. And in 10 years' time, in 20 years' time, what is that standard which is expected? I'm quite sure that if you look at New York or London or Beijing or Shanghai or Sydney or Mumbai, it will not be what it is today. It will be something new, there will be new technology, there will be new ways of doing things, there will be new aspirations.
CT: But Singapore will be there right on top.
PM Lee: And we want to be there. And our job, the government's job is to help Singapore stay at the top.
CT: Let's talk about the government's job because Singapore has often been described as a nanny state. And if I were to quote your late father, he had a great quote, he said, "If Singapore is a nanny state, then I'm proud to have fostered one." For many, Singapore is already a developed economy. Do you think it still needs a baby-sitter? A nanny?
PM Lee: Well, if you ask the Singaporeans, on the one hand, they'll say let us do our own thing, on the other hand, whenever an issue comes up, they'll ask what the government is doing about it and they have very high expectations of what the government should be doing, which is right because they voted for the government and they expect the government to be able to perform. So we have to keep that balance. No government prospers by saying I don't need to do anything and just by being there, we have made the country thrive. You have to have an idea of what you need to do, what needs to be fixed, what can be improved, what we should now imagine together, which we didn't previously imagine and having thought of it, decide to do it. And that's the government's role.
CT: It's been more than two years since your father, the late Mr. Lee Kuan Yew, passed away. What's life like, for you, post Lee Kuan Yew?
PM Lee: Well. Life goes on. I think Mr. Lee prepared well for the day when he would not be here, and he made sure that Singapore would be able to go on without him. He handed over as Prime Minister in 1990. 25 years before he died. So I think we miss him, we think of him often, we read his old speeches and we say, "well, that's still relevant to us today." The way he puts it still has a ring to it. At the same time, we have to build on that and move forward, because if we just remained with what he had imagined and what he had done and nothing more, I think he'd have been very disappointed.
CT: If he were alive today, what advice do you think he would have given you?
PM Lee: I think he would have said, "Press on, move on. Don't be looking at the rear view mirror. Remember what has happened, understand how you got here, but look forward and press forward."
CT: You can hear his voice in your head?
PM Lee: (laughs) Yes, we can imagine that.
CT: Earlier this year, you had a dispute with your siblings over your father's estate. For many, it was a rare moment in Singapore's politics where something so private involving the founding Lee family is made so public. Have you and your siblings managed to resolve the issue?
PM Lee: Well the matter is in abeyance, I'm not sure if it's solved.
CT: Are you on talking terms with your siblings?
PM Lee: We have not recently communicated.
CT: How are relations with your siblings now? Do you hope to patch up with them?
PM Lee: Well, I think they are where they are. Perhaps one day when emotions have subsided, some movement will be possible. These things take time.
CT: Are you sad?
PM Lee: Yes, of course.
CT: And finally, you have until January 2021 to call the next elections. Could it happen in the next two years?
PM Lee: Yes, of course. Any time.
CT: So we should be prepared.
PM Lee: We always need to be prepared.
CT: As Prime Minister, you said you'd step down after the next election, before you turn 70. You're 65 now. Are you ready to step down in the next couple of years?
PM Lee: I am ready. What I need to make sure of is somebody is ready to take over from me.
CT: Is there somebody in the wings?
PM Lee: Well, as I've said, there are people in the wings. The question is, who it will be and that will need to be decided.
CT: How will you ensure a smooth power transition?
PM Lee: By building up the team so that when I leave, the rest of the team will be able to work and carry things forward. And they're doing that by being hands on, by having responsibility for major policies, by taking charge of...spiky ministries.
CT: But you will still be there behind the scenes?
PM Lee: Well, that's up to the next Prime Minister.
CT: What sort of legacy do you hope to leave behind?
PM Lee: I think that's not for me to say. I'm just trying to do my job day by day.
CT: Prime Minister Lee Hsien Loong, thank you so much for talking to me on CNBC Conversation.
PM Lee: Thank you.
