Transcript of Minister for Foreign Affairs Dr Vivian Balakrishnan's Interview with Bloomberg TV for "Bloomberg Markets Asia", 6 March 2023

Haslinda Amin (Bloomberg TV): We are joined exclusively by Vivian Balakrishnan, Singapore’s Minister for Foreign Affairs. Minister, good morning, good to have you with us. We know how much (President of the People’s Republic of China) Xi Jinping is embarking on his biggest leadership shakeup in years. Some say that means greater stability at home, but that means that he is open to taking on more risks abroad. Are we about to see a more aggressive China?

Minister Vivian Balakrishnan: I just returned from Beijing just the week before. First, what I saw when I arrived – traffic jams. Good sign, the economy is back. I think their focus at this stage is to restart, jumpstart the economy and get back to pre-pandemic levels. So my sense of it, that is priority number one. Now clearly, they are also aware that the world is not in a placid, calm state, and prime of which the hot war in Ukraine, the sharpened rivalry with the United States and do not forget globally, we are still dealing with inflation (and a) food and energy crisis. There is a lot on their plates. But my sense and certainly the sense from Southeast Asia – it is the economy. That is number one.

Amin: Defence was also a priority over the weekend at the NPC (National People’s Congress). We saw how China increased its defence budget by 7.2 percent, US$220 billion on top of the 7 percent increase the year before. Surely this is a China that has plans, and how will the rest of Asia respond?

Minister: I would take a step back and say that the last seven, eight decades of the peace dividend after the Second World War is over. You are going to see increased defence expenditure in literally all over the world. Certainly, in the case of Europe, (and) America still spends more than anyone else, several times more than even China. So even after China’s (defence budget) increase, it is still a fraction of the United States. My sense is yes, I see increased defence expenditures all around. I see this merely as an index of the fact that the post-World War Two peace and prosperity that we almost took for granted is over.

Amin: But might we see an arms race in Asia? Asian economies may want to respond to China’s greater spending in defence.

Minister: I expect to see greater expenditure all around, including within Asia. But my point is to recognise the reasons behind this. The rules-based world order, the focus on economic integration, liberal economics, free trade – all that was a formula for peace and prosperity. Now that the faith in those pillars have been shaken, you are seeing people – it is a flight to safety in a way, and they are beginning to have to invest more in defence. So, not necessarily an arms race. I do not think anyone wants to see an arms race, which subtracts from the ability of Asia to invest in infrastructure, connectivity, productive capacity, education, or training. So long as you do not erode into those things, I am not going to worry excessively. I am going to take this as part and parcel of the way the world is evolving.

Amin: You are just back from (the G20 Foreign Ministers’ Meeting in) New Delhi. We did not see a Communique yet again. Talks (were) derailed by the war in Ukraine. China has come out to say it wants to be a neutral moderator, it has come up with a peace plan. Can China play that role?

Minister: I do not think China is overstating its role. On one hand, Russia is a key ally, partner of China, and China does not want to see Russia crushed or destroyed in any significant way. On the other hand, the Chinese have always emphasised that for them, the UN (United Nations) Charter, the respect for territorial integrity, sovereignty, and independence are also sacred. They are also having to very carefully navigate the sometimes contradictory geostrategic pressures. To the extent if you ask me, does China want peace in Ukraine? Yes. Do they want a better relationship with Europe? Yes. Do they hope to try to dial down the tension with the United States? Yes, they do.

Amin: China also is raising tensions in the South China Sea. That is forcing the likes of the Philippines to gravitate closer to the US. Singapore has always maintained that it does not want to choose sides. But with rising tensions between the US and China, might countries in this part of the world be forced to do it? Where are you feeling the pressures?

Minister: First of all, I would say fortunately in the case of Singapore, we have no claims in the South China Sea. That is one big pain point that is not present for us. Second, the consistent position that Singapore has taken for decades, is that this is an area where China can afford to be, and should be more generous to the smaller, weaker states in Southeast Asia. Again, territorial disputes on sovereignty may take generations to resolve. But whilst not giving up claims, can we in the meantime focus on (the) economy? And should China be doing more in terms of trade, investment, and connectivity? In fact, China has been trying to do so.

I am not trying to trivialise the tensions in the South China Sea. But what I am saying is that if everyone can keep calm, less drama, and follow the money, I think that will be helpful. If you look at Southeast Asia, what is it that the claimant states want? For the claimant states, their territorial disputes in the South China Sea are just one aspect of a much larger and broader relationship with China. They want peace, they want Chinese investments, they want Chinese trade. We need to find a way to do so.

Amin: It is not just about China. It is also about the US – the US expanding its export ban. How might this play out and how is it impacting Singapore in a trickledown effect?

Minister: I will take that at two levels. The first level is that we believe the presence of the US in Southeast Asia for decades, on balance, has been a net positive in terms of the construction of global supply chains, in terms of investments, in terms of trade, in terms of generally, a rules-based world order where everyone exercises restraint. Everyone operates within agreed rules. There are ways of resolving disputes peacefully, and that has been a formula for peace and prosperity in Southeast Asia, especially in the last four or five decades. So, the first point I want to say and want to emphasise, is that the US has been a constructive presence and we want the US to continue to be in Southeast Asia, especially in its economic impact in Southeast Asia. Therefore, what we want is a Southeast Asia where the US, China, Europe, (and) all the other powers have a stake in our peace, prosperity, and progress, and create a stable balance of power.

That is why we say we do not want to choose sides. We do not want to be forced to make invidious choices. That is a sincere expression. At the same time when we say we want an open inclusive architecture, and we are not going to exclude the US just because theoretically it is not an Asian country – it is a sincere position. The more the merrier, but compete on positive, constructive agenda, and it can be done.

Amin: We have to leave it there. Thanks so much for your insights today. There you have it Singapore Minister for Foreign Affairs, Vivian Balakrishnan.

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