China's Transformation Startling: Lee Kuan Yew

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Last updated at: (Beijing Time) Thursday, July 18, 2002

China's Transformation Startling: Lee Kuan Yew

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Singapore Senior Minister Lee Kuan Yew Wednesday said that China's transformation has been startling since his first visit to that country and a rising China is both a competitor and a partner to the rest of East Asia.

The senior minister made the point while delivering a speech at a rally commemorating the fifth anniversary of the East Asia Institute (EAI), National University of Singapore.

Noting that he visits China regularly since 1976, Lee said that"China's transformation during this period has been startling."

"It is not confined to improvements in its physical and tangible hardware, such as improved infrastructure and communications. More impressive are the changes in the Chinese people -- their openness to new ideas, their hunger for progress and their great desire to learn and catch up," he told an audienceof around 300.

Lee said China has surpassed its "xiao kang" (modestly comfortable) targets set by Deng Xiaoping in 1979, achieved an average growth rate of 10 percent per annum during the last decadeand become the seventh largest economy in the world compared to the 11th in 1970s.

"By pushing ahead with WTO membership, the Chinese leadership has signaled their determination to stay the course towards greater openness and integration with the rest of the world," the senior minister said.

Touching the topic of China's impact on East Asia, Lee said "A rising China is both a competitor and a partner for the rest of East Asia," adding that the country will initially be "more of a partner for the industrialized Northeast Asia" and "more of a competitor for Southeast Asia."

China's low unit cost of production and abundant supply of cheap and skilled labor makes it an attractive base to relocate industries seeking to remain globally competitive, he said.

Commenting on the change in shares of foreign direct investments China and ASEAN countries receive respectively, Lee said "We can expect a reversal of China's role in the region" and China will become a huge potential market for unfinished goods produced in Southeast Asia.

China's burgeoning middle class will translate into more tourists for ASEAN countries and China's overseas investments in Southeast Asia will rise, he added.

The EAI was first established in 1983 to study Confucianism andits value for social cohesion. The institute was later renamed theInstitute of East Asian Political Economy with its focus shifted to political, economic and social developments in an emerging EastAsia.

The institute evolved into the EAI, set up in 1997 as an autonomous research organization within the National University ofSingapore with its academic and policy-oriented research on East Asia concentrated on contemporary China (including Hong Kong and Taiwan), and China's growing economic integration with the world.

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