SECRETARY OF LABOR CHAO MEETS SINGAPORE LEE KUAN

C O N F I D E N T I A L SECTION 01 OF 03 SINGAPORE 001016 SIPDIS DEPT FOR EAP/MTS DEPT PASS DOL - FOR IAB AND OSEC DEPT ALSO PASS USTR FOR KARESH, ROSENBERG STRATFORD AND LEE TREAS FOR OASIA/ISA-CUSHMAN AND RAND USDOC FOR 4420/ITA/MAC/MCQUEEN AND DAS KASOFF E.O. 12958: DECL: 09/18/2018 TAGS: ELAB PREL PGOV OVIP SN SUBJECT: SECRETARY OF LABOR CHAO MEETS SINGAPORE LEE KUAN YEW, SINGAPORE MINISTER MENTOR, AUGUST 29, 2008 Classified By: AMBASSADOR PATRICIA L. HERBOLD FOR REASONS 1.4 (B) AND ( D). ¶1. (U) August 29, 2008; 5:00 PM; the Istana (the Palace) ¶2. (U) Participants: United States: Secretary of Labor Elaine L. Chao Ambassador Patricia L. Herbold Dr. James Chao Associate Deputy Secretary of Labor Anna Hui E/P Chief Ike Reed (notetaker) GOS: Minister Mentor Lee Kuan Yew Principal Private Secretary Chee Hong Tat MFA Americas Assistant Director Jasmine Tan (notetaker) ¶3. (C) Summary: Secretary of Labor Elaine Chao and Singapore Minister Mentor (and founding father) Lee Kuan Yew discussed in an August 29 meeting China's development and the future of its relations with the outside world. MM Lee applauded China's success in hosting the Olympics, but said that if China "believes they've arrived, it's a big mistake," as it would take several more decades to address internal problems and develop a fully competitive workforce. MM Lee said China has no interest in exporting its political values and warned that rising trade protectionism in the West could slow, but not stop, China integration with the rest of the world. MM Lee also discussed with the Secretary and Dr. Chao their family history and the challenge of mastering the Chinese language in an overseas environment. End Summary. China's Competitiveness -------------- ¶4. (C) Secretary Chao discussed with MM Lee her impressions from her August visit to China, where she represented the President at the Olympics closing ceremony, noting that it was her first visit there for some time. She observed that China's rapid development and its ability to galvanize its people for the Olympics called into question assumptions that its political system would limit its economic competitiveness. China's rapid rise was leading many to wonder when it would embrace Western political values, while others worried that it would begin to impose its own. Noting that MM Lee was an early advocate of blending Asian and Western values, the Secretary sought his views on whether and how China would adapt and how it might seek to exert its influence. ¶5. (C) MM Lee responded that the pace of China's integration with the rest of the world in part would depend on how the world reacts to China. He suggested that if protectionist rhetoric in the West were translated into policy, there is a risk the world would break into regional blocs and limit interaction. Even so, MM Lee predicted integration would resume within 8-10 years. Today, a country could only protect its markets at the cost of its own competitiveness, he said. Assuming "rationality prevails" elsewhere, China would increasingly integrate as more of its people were Western educated, traveled abroad and had access to the internet and modern communications. MM Lee noted that China's current leaders learned Russian as their first foreign language; by 2030, he predicted, almost all would have advanced degrees from the United States or Europe. Such people would know where China lagged and how to catch up. Their goal would be to preserve order and, within that order, find ways to be more competitive. ¶6. (C) China's leaders had studied the experience of Japan, South Korea, Taiwan and Singapore, MM Lee continued, and figured out that China's backwardness was due to its isolation. They would not fall into the trap of protecting SINGAPORE 00001016 002 OF 003 native industries, as Japan and Korea had done, but rather use Singapore's openness as a model. Today, MM Lee noted, China does not have just one national car company, but rather hosts operations from all of the world's major car companies. MM Lee recalled that Deng Xiaoping had observed during a 1978 visit how Singapore encouraged multinational companies to establish themselves here and then used the revenue they generated to build infrastructure and invest in its people. What China wants now is to educate its people, "and it is doing so furiously." China's leadership wants their students to get an education overseas, gain know-how, and then come back. Chinese Are "Not Evangelists" -------------- ¶7. (C) MM Lee dismissed the notion that the Chinese had an interest in imposing their political values on others, saying "they are not evangelists." Rather, the Chinese just want to be left alone so they can focus on development. For political models they did not look to others in Asia but rather studied Singapore, because they want to know "how we can hold elections and still win." They had observed how Singapore's ruling party stays connected to the grass roots and how its MP's stay focused on providing services to their constituents, a system MM Lee described as rooted in Confucian values, but with a "Western approach." ¶8. (C) Even so, MM Lee suggested Chinese leaders had a long way to go to overcome their "mandarin mentality." He recalled that during his first visit to China in 1976, his hosts were deeply uncomfortable when he would try to open the curtains in his car. Even today, China's leaders prefer cars with darkened glass; "they don't want to be seen, whereas we want to be seen." A noted exception was Premier Wen Jiabao, whom MM Lee described as "a natural." Wen visited the scene immediately after the Sichuan earthquake and it was clear even watching on television that he spoke with genuine sympathy for the victims. Later, when the entire Party Standing Committee turned up, it was clear they were "playing a part." It will be difficult for China to "find more Wens." But a new generation of leaders with exposure to the world and PhDs from the Europe and the United States will have a different "sense of place in the world," MM Lee predicted, and will want China to be comparable to the West both in terms of the comforts of life and norms of civilized behavior. ¶9. (C) Secretary Chao noted that she participates in forums all over the world and often hears expressions of fear over China's rapid resurgence. The cultural differences were obvious. Secretary Chao wondered how it would be possible to bridge the gap and asked whether MM Lee was concerned about rising nationalism in China. MM Lee responded that it was natural for others to worry about China, given its size; after all, a single province in China can be the size of two large European countries. Nationalism was a natural stage for China to go through, but it would need to guard against overconfidence. China had done well staging the Olympics, he said, but "if they believe they've arrived, it's a big mistake." It would be another 30 to 40 years before China had a workforce that could compete with Japan's. ¶10. (SBU) MM Lee predicted that over time, Chinese leaders would become "more bilingual and more bicultural. He said it was worthwhile to compare the current generation of Japanese and Koreans with that of the 1950's and 1960s, who were nationalistic and xenophobic. Today their leaders have advanced degrees from the West and are conversant in world affairs, even if those characteristics have not fully permeated through their societies. China suffers from a "big country syndrome" and the interior of the country is nowhere near as sophisticated as the coastal areas. It could take "100 years," MM Lee said, to develop the interior of China. The railway China had built to Lhasa reflected its SINGAPORE 00001016 003 OF 003 determination, but also highlighted its problems. The Tibetans would never be convinced it had been built for their benefit, and the influx of Han Chinese to Tibet was setting the stage for an enormous problem. U.S. Future -------------- ¶11. (C) Asked for his thoughts on the future of the United States, depending on the outcome of the Presidential election, MM Lee said that if United States followed the ideological direction of Europe, "you are done for." There will always be a "tussle" within societies as "underachievers want more support," but addressing their needs must be done in a way that does not kill incentive. It would be impossible in the future for countries to sell to China while at the same time blocking their exports, he added. Maintaining Chinese Language Overseas -------------- ¶12. (C) MM Lee asked the Secretary and her father, Dr. Chao, about their family history and their preferences regarding use of the Chinese language. Dr. Chao described his upbringing in China, education in Shanghai and the circumstances that brought him to the United States. Noting that her father had been a sea captain and "self-made man," the Secretary described the efforts of her parents to establish the family in the United States as "inspiring." She said that she and her five sisters had worked hard to learn both English and Chinese while growing up. The Secretary said she usually spoke Chinese with her father, but acknowledged that sometimes it was easier to use English. ¶13. (C) MM Lee said it was very difficult to learn Chinese under such circumstances. He recalled that Chinese, English, Malay and Tamil had all played an important part in Singapore's history. At the time of Singapore's independence from Malaysia, the new government which MM Lee led faced pressure from the majority ethnic Chinese to replace Malay as the national language with Chinese. However, given Singapore's history and the political sensitivity of such a move, the government instead kept Malay as the national language, recognized all four languages as official languages, and allowed parents to choose whether to place children in vernacular schools, where English was taught as a second language, or in public schools, where English was the language of instruction and vernaculars were taught as the second language. Within about ten years, parents realized the advantages of the latter, PM Lee said, because a command of English was necessary to get good jobs. ¶14. (C) MM Lee said that maintaining a relatively competent standard of Chinese in Singapore today is a challenge. Many Singaporeans speak Chinese well but have trouble reading and writing it. He noted that his son (apparently referring to Prime Minister Lee Hsien Loong) went through Chinese vernacular schools for twelve years, but after attending an English-language university, got out of the habit of reading and writing Chinese. Today, before delivering speeches in Chinese, his son notates the Chinese-language text heavily in order to ease delivery. ¶15. (U)Secretary Chao's party cleared this message. Visit Embassy Singapore's Classified website: http://www.state.sgov.gov/p/eap/singapore/ind ex.cfm HERBOLD