China will never match US in innovation: Lee Kuan Yew; “America’s creativity, resilience and innovative spirit will allow it to confront its core problems, overcome them, and regain competitiveness,”

China will never match US in innovation: Lee Kuan Yew

Staff Reporter


In a new book about the relationship between China and the United States, Singapore’s former prime minister Lee Kuan Yew says China will never be able to compete with the United States in terms of creativity, reports the Australian.

In The Grand Master’s Insights on China, the United States and the World written by Graham Allison, Robert Blackwill and Ali Wyne, Lee says Beijing is trying to restore China’s historical position as the Middle Kingdom while the United States is also trying its best to maintain its superiority. Countries in Southeast Asia are still wary of what China may be like if the country becomes the dominant power in the Western Pacific.

“They are uneasy that China may want to resume the imperial status it had in earlier centuries, and have misgivings as being treated as vassal states.” While Beijing tells its neighbors that countries big or small are equal, Lee points out that China also tells them that they have made 1.3 billion people unhappy when they do things it doesn’t like. For this reason, Lee pointed out that a rising China is likewise concerned and insecure about the actions of small Asian nations.

Lee said it would be extremely unwise for China to enter an arms race with the United States. “The Chinese must avoid the mistakes made by Germany and Japan. Their competition for power, influence and resources led in the last century to two terrible wars.” Beijing must likewise avoid the fate of the Soviet Union. “The Russian mistake was that they put so much into military expenditure and so little into civilian technology that their economy collapsed.” For this reason, Lee says he believes China will keep its head down for at least another 40 or 50 years rather than risk asserting dominance too soon.

Conceding that China is set to replace the United States to become world’s largest economy, Lee said however that China will never overtake the United States in innovation. “America’s creativity, resilience and innovative spirit will allow it to confront its core problems, overcome them, and regain competitiveness,” he said, while suggesting on the other hand that China’s creative development will be stifled by a traditional culture which does not permit a free exchange and contest of ideas.

China is also unlikely to become a liberal democracy, Singapore’s founding father suggested. “To achieve modernization, China’s Communist leaders are prepared to try every method except for democracy with one person and one vote in a multi-party system.” The party needs a monopoly on power to maintain the stability of the nation. If it launched liberal democratic reforms, the central government may lose its power over different provinces. “If it did, it would collapse,” said Lee, “If you believe there is going to be a revolution of some sort in China for democracy, you are wrong.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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