Working Visit by Minister for Foreign Affairs Dr Vivian Balakrishnan to Aspen, Colorado, United States of America, 15 to 17 July 2025

Minister for Foreign Affairs Dr Vivian Balakrishnan made a working visit to Aspen, Colorado, United States (US) to attend the Aspen Security Forum (ASF) from 15 to 17 July 2025. At the ASF, Minister Balakrishnan discussed global strategic issues at a dialogue session and engaged a range of business leaders, academics and officials from the US and other countries.

The transcript of the fireside chat is appended.

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MINISTRY OF FOREIGN AFFAIRS

SINGAPORE

17 JULY 2025

TRANSCRIPT OF MINISTER FOR FOREIGN AFFAIRS DR VIVIAN BALAKRISHNAN’S FIRESIDE CHAT WITH FINANCIAL TIMES CORRESPONDENT DEMETRI SEVASTOPULO AT THE ASPEN SECURITY FORUM, 16 JULY 2025

Demetri Sevastopulo: Vivian, it is a pleasure to have you here. If you put both of our countries together, we have the population of a mid-sized city in Guangdong, China. But Singapore and Ireland punch above their weight as [Co-Chair, Aspen Strategy Group] Nicholas Burns said. You have been in this role for 10 years, roughly as long as Wang Yi in China –

Minister: He has been in the role a bit longer.

Demetri Sevastopulo: You have dealt with the Trump Administration the first time and obviously, the Biden Administration. Now we are back with President Donald Trump again. So, I want to start off by asking you, how is Singapore navigating Trump 2.0? Just to put a little bit of context- you have a trade deficit with the US. You have a free trade agreement with the US. You have not yet received one of Trump's trade love letters?

Minister: Not yet.

Demetri Sevastopulo: Is Singapore in the safe zone?

Minister: Singapore is a tiny city-state, an island one-fifth the size of Rhode Island. We are not yet 60 years since independence. Just to put things in context, we are a small place, part of Southeast Asia, but our trade volume is three times our Gross Domestic Product (GDP). I say all this so you understand where I am coming from. Next point is, because it has only been about 60 years of independence, we have, in a sense, had a turbocharge to our economy with two large factors: (a) Pax Americana; and (b) the reform and opening up of China. And just to give you again some context, some sense of the numbers involved, when we were made independent – and I say made independent in 1965 because we were divorced from our northern neighbour – our per capita GDP was USD 500. Today, if you check ChatGPT, or your favourite search engine, you will get a figure somewhere between USD 80,000 to USD 90,000. So not bad for six decades.

But the point is that it was Pax Americana and China. What Pax Americana did was that the US – which was the ultimate victor of the Second World War, and  the ultimate heir of the Industrial Revolution – was a very unusual victor. Usually, the victor collects the spoils, imposes his will, and life goes on. But the US in 1945 embarked on a unique, historical and unprecedented action by rebuilding those that were vanquished: Japan, Germany, the Marshall Plan and Europe. It  envisioned and underwrote in blood and treasure, what we call today, rules-based multilateralism and globalisation – the United Nations (UN), the World Trade Organization (WTO), the World Bank, and the International Monetary Fund. In a very ironic sense, a hegemon, but a magnanimous hegemon,  created multilateralism, and because that set the stage for globalisation, you see how a tiny city-state in Southeast Asia with no hinterland, no resources can make ourselves relevant, hospitable, and facilitate the expansion of multinational corporations.

Today, in Singapore and Ireland, we both have more than 5,000 American companies, and that has been a turbocharge for our economic development. So we like the Americans to be around, and like American investments even better. We believe in free trade because Singapore's trade volume is three times our GDP. So you can understand that this is not a negotiating point. It is our lifeblood. This is just to give you some context of where I am coming from, and I think there are quite a lot of parallels with Ireland.

Demetri Sevastopulo: I cannot let you escape without answering the question - is Singapore safe in the safe zone or do you expect it to get more difficult?

Minister: History is replete with the carcasses of small states. Let us be realistic about it. The thing that Mr. Lee Kuan Yew always reminded all of us was to take the world as it is, not as how you wish it. So no, a small city-state is never safe. What is happening now in the world is that the magnanimous hegemon has changed its posture. I do not want to personalise this, but think about it, what has really changed is domestic politics in the US. At the end of World War Two, the US’ GDP was 40% of the global GDP. At that rate, it was entirely worth America's while, and in its own enlightened national interest, to underwrite the global system in blood and treasure, because for every additional dollar generated in the world, 40 cents came back to America. Today, it is 26%. Now, in nominal terms, the US still has the largest GDP. But at 26%, it is an entirely legitimate question for the American voter to say, excuse me, why are we shedding blood and treasure underwriting this system? Should there not be a fairer distribution of the burden? Should there not be less free riding and all these things about the peace dividend? If the US spends 3% on defence, what about the rest of the world?

There was a speech where my good friend, Josep Borrell, who was the Vice President of the European Commission said, “Look, in Europe, we outsource security to the US, outsource energy to Russia and outsource trade to China”.^[1] Is that sustainable? The point I am making is that this is the end of an era. It is not just because of one man or one country, but that these past 80 years have been historically unprecedented, and now we just have to grow up and realise it is the end and look forward.

Demetri Sevastopulo: I want to ask you about trade. Singapore has been one of the louder voices over the last number of years calling for the US to be more engaged, not just with security in the region, but also trade. Trump abandoned the Trans-Pacific Partnership (TPP). Biden attempted the Indo-Pacific Economic Framework (IPEF), which essentially flopped. Now you have US tariffs on countries all across Southeast Asia, although Indonesia has done a deal and Vietnam may have done a deal. What opportunities is this providing for China?

Minister: Well, let us back up a bit and look at some numbers. US trade with Southeast Asia runs at somewhere about half a trillion US dollars. You look at China’s trade with Southeast Asia- it runs at about a trillion US dollars, so a factor of two. But beyond trade, let us look at investment.  If you look at 2024, you will find that the flow of foreign direct investments (FDI) from the US to Southeast Asia is four times that of China. These are the things that people do not delve into.

Demetri Sevastopulo: Is this gap shrinking or is it fairly normal?

Minister: If you look in terms of the stock of FDI, the US’ stock of FDI in Southeast Asia is around half a trillion US dollars because China came on later. I think the ratio is 1:10. So my point is, yes, when you look at trade, these are significant numbers. But you also need to look at investments, because you can trade with anyone, but investment requires a certain belief, a certain optimism, a certain confidence in the future. So, in Trump 1.0, whenever I met the President, I used to tell him, “Sir, you have a trade surplus against Singapore.” Initially, he did not believe me and I said “No, but these are figures from your own Bureau of Economic Analysis (BEA).” I made a point —

Demetri Sevastopulo: And he still did not believe them —

Minister: Well, he came round to it. The next time I met him, I repeated it. He said, “You must be the only one.” I said, “No, no, no, we are not the only one.” So, for us now, to be subjected to 10% tariffs when we, in fact, have had a free trade agreement with the US since 2004 and the US has a trade surplus against us, obviously, as far as we are concerned, it does not quite compute.

But actually, the problem goes far deeper than this, because you could say, well, 10% is the baseline and universal; this is just a revenue raising measure on the part of the US, and after all, the US does have a deficit [with many countries]. You could say, it is not such a big issue. But it is far, far more than that. Because it is, in fact, a repudiation at a very fundamental level of this principle called Most Favoured Nation (MFN) which is Article One of the General Agreement on Tariffs and Trade (GATT), a foundational Article of the WTO. And if the US of all superpowers, abrogates this, it gives ideas to everyone else in the room. So, my point is, instead of a rules-based global system that promotes trade, you now have a system where every trade agreement becomes a bilateral arm-wrestling match. And can you see how hostile that would be to a tiny city-state with trade three times our GDP? So, we are worried at that level.

But there is another level in which what is happening now is deeply worrying, because if you impose tariffs, there is going to be strong temptation from the other side to impose reciprocal tariffs, and you end up in an escalatory spiral. So far, not there yet, but if things really get off the skids, we are back in the 1930s and we all know that was not a glorious period for economics, for globalisation, and for peace and stability. So yes, we are deeply worried.

We will have to see what happens now, and obviously, the real big contest in the room is  between China and the US. Well, I was in Washington D.C. and Beijing in June. The Chinese side are in a confident mood. Why? Because one, the trade tensions just turbocharges their efforts at self-reliance. It is a spur to their people that you cannot be complacent, you cannot take the world for granted, and they need to speed up this journey for self-reliance. So, making virtue out of a necessity. Two, and I think this has become clear even to the US, is that China has leverage. Take rare earths, critical minerals, for instance. So, it is not as if your counter party has no agency. And third, China has a much higher threshold for pain than others. Whatever criticisms you have on their political system, China has a system which is capable of a long-term outlook.  So, it is in a state of confidence. Now, that does not mean that China actually wants to wreck the global trading system, because – I mentioned Singapore and the other Asian Tigers were beneficiaries of Pax Americana– but actually the biggest beneficiary of the last 80 years has been China, especially after reform and opening up. So, China is not a revanchist power from an economic perspective. They would still much prefer a modus vivendi with America. That requires respectful, candid, constructive conversation in the room.

Demetri Sevastopulo: I want to come back to China specifically in a minute, but before that, I am going to do something very unfair. I am going to ask you something that your former boss, Lee Kuan Yew’s son, former Prime Minister Lee Hsien Loong said in 2018, at the Shangri La Dialogue, if I am not mistaken. He said, “It would be better or desirable if ASEAN countries did not have to choose between the US and China. But the day may come when it has to.” So, my question is – are we closer to that day?

Minister: Let me give you a Southeast Asian view. When we look at Europe, and I know there was discussion of the war in Ukraine just now, it seems to me – and Nick can correct me if I am wrong— that the fundamental strategic question in Europe is, where is that line? The Iron Curtain, the Warsaw Pact, the eastward expansion of the North Atlantic Treaty Organisation (NATO), Ukraine? And where does Russia fit into Europe? Where is that line? And unfortunately, that question still results in ongoing bloodshed. In Southeast Asia, we do not want to be trapped in that same paradigm of ‘where is that line?’.

The preferred strategic model for all of us in Southeast Asia is to make sure that the two superpowers – the United States and China— and the middle powers, including India, Australia, the Middle East, have skin in the game and have a stake in our continued peace and prosperity. We do not want Southeast Asia to become an arena for proxy wars. So, can you see that we are operating on a completely different paradigm? What my former Prime Minister said – in Southeast Asia, we believe in overlapping circles of friends, which means your circle may be different from mine, but there are overlapping circles, and we truly believe in win-win arrangements. We are champions at negotiating free trade agreements. I mean, from a Singapore perspective, over 90% of our trade is covered in some free trade agreement or the other. We are strong proponents of the WTO. We engage in multilateral, plurilateral arrangements, but we still make all these stepping stones to ultimately, a free trade area for the world.

It is a completely different paradigm. So, when you pose the question, do we want to be forced to choose sides? Of course, we do not. That goes against our organising principle. But having said that, we do not control the agenda in Beijing and Washington. What I can say from direct experience over a decade is that so far, both sides have reassured us they are not forcing us to choose sides. Now, I will take that at face value, but it is a delicate balancing act.

Demetri Sevastopulo: But do you feel like it is becoming harder to do that delicate balancing act?

Minister: It will become, let us put it this way, a period where you have reached an end of an era and the rules are no longer underwritten. And any student of history will know that the most dangerous phase is the interregnum between one world order and an inchoate new world order. Are we in that interregnum? Yes, we are. Are we witnessing hot wars in Europe, hot wars in the Middle East? Yes, we are. Are we anxious about potential rising tensions in the Pacific, in the South China Sea, in the Taiwan Strait? Yes, we are. So, I am concerned. On a macro level, this is a very dangerous time geopolitically, this is a very unconducive time for trade because of the profound damage to an architecture which has served us well for 80 years, and, I may add, the United Nations and the Security Council is essentially paralysed. So, there are enough reasons for amber lights to be going off, and it is not just because of [developments in] Washington and Beijing. I am trying to take a broader and longer term view of what is happening in the world.

Demetri Sevastopulo: So, I wanted to ask you about China. One of the interesting, slight differences of opinion last night between former US Ambassador to China Nicholas Burns and The Economist Editor-in-Chief Zanny Beddoes and their talk —

Minister: Yes, I replayed his session twice last night.  Nick, you deprived me of an hour of sleep.

Demetri Sevastopulo: So, the one area where they had a slight disagreement was that China and the US have been essentially in a game of economic chicken over the last few months. I think Zanny’s view was that China came out on top. Nick's view was not necessarily, actually the US had measures that it used. How do you see it?

Minister: I do not think China sees it as a game of chicken. I think their posture has been to stand firm, and they have a high threshold for pain. They have a longer term perspective, and they have leverage. But at the same time, they would still much prefer that the system continues with appropriate reform. So they are still holding up. And it is not just China. Frankly, the rest of the world still holds out hope that a reformed global architecture, politically and economically, will emerge.

For Singapore and our Southeast Asian neighbours, we have ASEAN. Within ASEAN, we are focused on systematically and comprehensively bringing down not just tariff barriers, but non-tariff barriers, because, in fact, intra-ASEAN trade, can and should expand. We are also members of overlapping multilateral free trade agreements. For instance, we have the Regional Comprehensive Economic Partnership, which is the 10 ASEAN countries plus five other countries – Australia, New Zealand, China, Japan, South Korea. Singapore and three ASEAN states are also members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Now the TPP, its predecessor, is worth unpacking. The predecessor to the TPP was the P4. In fact, the P4 started off as Singapore, Brunei, Chile and New Zealand – four little minnows. It was only after Japan and US became interested that the TPP became a big deal.

Now, I know you said earlier on that President Trump pulled the US out of the TPP, but it is worth remembering that, even before the election, former Secretary of State Hillary Clinton had also backed off. The point here is, again, not to personalise it, but to understand that within the domestic politics in America, there has been a pushback against globalisation, free trade, due to its impact on industrialisation, and so on. What we are now trying to explore is whether we can do some sort of partnership between the CPTPP and the EU, which makes quite a natural partner for globalisation and rules-based trade integration. And there are others: for instance, the CPTPP had 11 countries because America pulled out, but there are now 12 members because the UK joined, and there are other parties in the queue. So, you can see that what we are trying to assemble is a coalition of the willing, who still believe in globalisation, economic integration, and free trade. But we still hope that America will come back in some form or the other, and we leave that door open.

Sevastopulo: So, I am going to ask one final question, and then I think we will have time for one question from the audience. On Taiwan. [Commander of the US Indo-Pacific Command] Admiral Paparo, sadly, is not here this week, but he has said over the last few months that the Chinese military exercises around Taiwan are not just exercises, they are rehearsals for an attack on Taiwan at some point in the future. Does Singapore share that view?

Minister: Singapore has a long and complicated relationship across both sides of the Strait. You need to understand that Singapore is the only political entity outside Mainland China and Taiwan, where 74% of the population has Chinese ancestry. This gives us both a special vantage point and a special understanding, but also sometimes adds additional stress. Let me put it to you this way, we have longstanding friendships with both sides. To answer your question, specifically, we do not believe that kinetic action is inevitable and I do not believe that it is the Mainland’s first choice, either.

But having said that, strategic ambiguity has prevailed now for 53 years. America did enough to deter Mainland China from embarking on kinetic action, but it also projected enough ambiguity to deter Taiwan from declaring independence. But over 53 years, the relative power has shifted, and although everyone proclaims that they are maintaining the status quo, you know as well as I do that everyone is salami slicing, slowly but surely. So that is why this is a moment of danger. But if you accept my hypothesis that kinetic action is not inevitable, then the question becomes how you are going to avoid that and how you can reduce the chances of accidents and miscalculations, spiralling and escalation. The standard diplomatic answer, which I think Nick and I will certainly agree, you need to sit down and talk and arrive at a modus vivendi. You need to make sure that you deploy forces in a way that they do not even accidentally get into collisions. And mind you, there was a collision. In 2001, a Chinese plane crashed with loss of life. The American plane was severely damaged, but managed to land in Hainan, and there were intense negotiations and a solution was found. Can you imagine a similar incident today, and you cannot even pick up the phone and be sure that someone on the other side is going to listen? It is far more dangerous.

So, our hope is that there will not be a war, since it is not inevitable and it is unnecessary, but that everyone can calm down and talk. There are many situations in diplomacy that cannot be resolved overnight. Territorial disputes, for instance, and I know something about that in Southeast Asia. Sometimes diplomats need to understand that you need to leave it to future generations. But do not prematurely push because sometimes, instead of putting things together, you get a rupture, and that is not in anyone's interest, so I am making the plea for strategic patience and engagement and to organise the prospect of a modus vivendi between the US and China.

If that happens, bear in mind, the biggest thing that is happening in town now is the technological revolution – AI, quantum, biotech, and energy – and our greater anxiety looking forward is that, for two to three centuries, the world has essentially been working on a common scientific application stack, which means we make a discovery, you publish it, you patent it, and you get a temporary monopoly. But the world benefits from it, and others get to work on it. This common stack has been a formula for rapid advances in science and tech innovation, and we have been beneficiaries of it. If you get a hard attempt to bifurcate that stack, three things happen. One, you will cause inflation because you are no longer organised on the principle of comparative advantage and efficiency and sharing and competition. Two, you will get more disrupted relations because you have less to lose from just chucking the whole kitchen sink at the other person. Three, you will slow down progress. So again, I am trying to make the argument that if we have to maximise opportunities for the future, you will need a modus vivendi.

The final point that I wanted to make is that foreign policy, economic policy, technological policy, begins at home. If you don't settle the situation back home, you won't be able to embark on all this. In the case of Singapore, we believe that free trade must be complemented by industrial policy and social security. If you do not get this triad settled and instead you get polarised, divided people who feel that free trade has been an exercise in de-industrialisation, unfairness, greater inequality, you will never generate the political consensus to make the necessary compromises internationally, to put ourselves to be ready for our future.

So that is my closing pitch, that if you believe in free trade, globalisation, and a rules-based order, you need to pay attention to your domestic policy and two things, industrial policy and social security. And by the way, on industrial policy, I do not mean thinking about winners and losers. I mean focusing on education, infrastructure, connectivity, and giving your people the skills and the confidence to go out there and harvest the opportunities that the new technological revolution offers. And you need to work on your Gini coefficient. One of the things which we are most proud about – you mentioned my former Prime Minister – is that in the last decade of his term, Singapore was able to reduce our Gini coefficient after taxes and redistribution. It fell from 0.42 to 0.37, and we hope to continue to work on that. But can you see how these things, social policy, industrial policy, and diplomacy, all interlock? And I just want to make this appeal that everyone chills, step back, understand the opportunities of the future, and understand the need to get your foreign, domestic and economic policies in sync. If we can do that, we can have a second wave of another season of opportunity.

Demetri Sevastopulo: One super quick question. Nick Schifrin (PBS NewsHour Foreign Affairs and Defence Correspondent).

Nick Schifrin:Thank you very much. Great session. Can I pick up on the security aspect where Demetri had left off, which is that you may believe that conflict is not inevitable, but what seems to be the reality is an expansionist Chinese policy throughout Southeast Asia, whether it is military, economic or diplomatic. For the last decade or so, the US has prioritised things like minilaterals or constellations around the region to try and get at that, including or in addition to increasing security in the Pacific. What do you believe is the best way to respond to Beijing's expansionist policy?

Minister: Every year, I used to pay my respects to Henry Kissinger in his office right up to his final year. The point that he kept reminding me was that a war between China and the US must never be fought because the consequences are just too catastrophic. I think even now, Henry's admonition is a reminder to all of us and is worth bearing in mind. So, if you start with that as the first line, then next is to understand the domestic politics and self-image of both China and the US. China is a 5,000 year civilisation, and the reason we are both speaking English today is because the Industrial Revolution began in England and then went across to Europe. The ultimate beneficiary or the ultimate heir of the Industrial Revolution was the US. The last time China had a maritime fleet – you have to go back to the Ming Dynasty in the 1400s with Admiral Zheng He – but then China decided that they were a waste of money and they would stop these fleets. China’s view was that it had reached the zenith of civilization and there was nothing else the barbarians could teach them. But China paid a very heavy price for turning inwards, and Europe and America won.

The point is that if you look over millennia, every time China was at peace and intact and running a continental size economy, it constituted about 25% to 30% of global GDP. But the trouble is, if you look across China’s five millennia, the US was mostly not there. The US is 249 years old. What you have now is two superpowers with no historical memory of ever having to engage with one another. So, we are truly in uncharted waters. Having said that, we have to all hope and pray that these two giants work something out because war is not inevitable. And you can sit down and focus on the future and getting your respective domestic houses in order. Frankly, both China and the US have got a lot of domestic homework to focus on. For the rest of us, we need to do the same and check our domestic situation and check our fitness for the future. Try to make common cause, and when the two big boys have sorted their modus vivendi, try to plug them in and make sure that they have a stake in our survival, prosperity, and stability. That is why diplomats have to be somewhat optimistic. Otherwise, you cannot get up and go to work every day. I hope you accept my thesis, coming from a tiny island city state dependent on the world, but having to take the world as it is, and still have enough hope and vision that there is a better tomorrow.

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