Copyright indiatimes
Singapore’s Senior Minister and former Prime Minister Lee Hsien Loong said India’s long-term growth trajectory could eventually see it “catching up with or even surpassing China, given its younger population and economic potential”. Speaking at a dialogue at Chatham House, Lee reflected on regional trade dynamics and China’s role in the global system.“Certainly, if they are going to grow, and on projections, one day they will, they may catch up with the Chinese, maybe even overtake them, because they have a much younger population, and the Chinese population is already declining,” Lee said.He was responding to questions about how countries should navigate China’s growing influence in interregional cooperation despite concerns about overcapacity. Lee said the Regional Comprehensive Economic Partnership (RCEP) remains a useful grouping, though it became less balanced after India decided against joining.Also Read: India engineers new export miracle that can beat oilHe recalled that RCEP was initially envisioned as an East Asia Summit partnership that included China, Northeast Asia, Australasia, Southeast Asia, and India. “In that configuration, we thought we had brought the major economies in, and there was a good balance: China and India, although India is really one-quarter the size of China’s GDP,” Lee said. Live EventsHe added that the inclusion of Australia and New Zealand, both US treaty allies, ensured that “the group can’t be that anti-US.”However, India withdrew late in the process, leaving RCEP as “ASEAN plus Northeast Asia plus Australasia.” Lee expressed hope that “one day the Indians will be ready to participate.”He contrasted RCEP with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), noting that while the former is “less substantial,” it still signals a collective desire for economic cooperation and open trade. “It’s a signal that we want to trade with one another and do not want to beggar our neighbours,” he said.On China’s global role, Lee said Beijing still wants to be part of the international system rather than disrupt it. “They are not wanting to go and disrupt the WTO system. They have benefited from it,” he said, recalling that China’s accession to the World Trade Organization under then-premier Zhu Rongji helped force domestic companies to become globally competitive.“In the early years, there were disputes brought to the WTO that sometimes went in favour of the Chinese and sometimes against them. And when they went against, quite often the Chinese actually complied,” Lee noted. While he said the situation today may be different, Beijing continues to “uphold the multilateral trading system and want to go by a rules-based order.”But Lee added a cautionary note: “A rules-based order in which one participant is a lot bigger than the others calls for forbearance, restraint, and a certain self-enlightened magnanimity, which does not come naturally to any great power.”Turning to China’s financial liberalisation, Lee said how far global investors engage with the renminbi will depend on whether Beijing relaxes capital controls and builds trust in its financial system. “To do that, how far it goes really depends on how far the Chinese are prepared to ease up on capital controls on the renminbi, to deepen their bond and financial markets, and to build up an ecosystem in which international investors feel comfortable putting, say, one-third of their assets under management in a Beijing bank or in renminbi bonds,” he said.He added that this would require not only sound economic and financial policies but also confidence in China’s political system and international relations. “The banker may turn out not just to be a banker, he may take instructions from the government, and the government may have other ideas,” Lee said.He compared this with the influence the United States holds over dollar-denominated assets: “If you are holding a US dollar asset… you know there is, de facto, considerable extraterritorial influence, if I may put it delicately, by the United States if it wishes to exercise it over the fate of your investment.”With few global alternatives to the US dollar, Lee noted that investors still rely on it, though the euro and renminbi have potential, if China can demonstrate that its financial system is insulated from geopolitical pressures. “If the Chinese decide to go down this path, they will have to decide to what extent they are prepared to keep this sacrosanct from other geostrategic considerations. I think they haven’t quite reached that point yet,” he said.Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our Economic Times WhatsApp channel) Read More News onindia economychina economylee hsien loongsingapore former prime ministerindia china comparisonindia economic growthasia economic outlookindia vs china gdpindian youth economyglobal trade asia (Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online....moreless (You can now subscribe to our Economic Times WhatsApp channel)Read More News onindia economychina economylee hsien loongsingapore former prime ministerindia china comparisonindia economic growthasia economic outlookindia vs china gdpindian youth economyglobal trade asia(Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online....moreless Prime ExclusivesInvestment IdeasStock Report PlusePaperWealth Edition123View all Stories
