China's rise as an economic power will be a long-term plus, but in the near-term it will bring "pain" to much of Asia, Singapore's Deputy Prime Minister Lee Hsien Loong said Thursday.
China was "the biggest new variable" in the globalisation equation, he told delegates at a New Economy conference.
Asian countries, particularly those heavily dependent on the information-technology (IT) market are already "feeling the heat."
Lee said that as countries jostled for pole position in the information age, 70 percent of foreign direct investment in the region was now being channelled into China and its Special Administrative Region of Hong Kong.
"Lured by low costs, abundant talent, industrious workers ... and the hope of a huge domestic market, tech manufacturers worldwide are expanding their operations in China," he said.
"China is already a global centre for hardware manufacturing. It is also rapidly building up its capability in the more knowledge-intensive areas of software development and services."
Lee cited the issue of Microsoft placing one of its four global support centres in Shanghai where costs were one-third of those in the US.
"China's rise is without doubt a plus," he said.
"A more properous China will mean a bigger market, more investment opportunities, and a bigger trading partner. As China exports more, it will also import more."
But Lee said that was a long-term result, and in the short term an emerging China will mean dislocation as industries restructure and trade patterns change.
"Some workers will lose jobs while other industries will need workers, but with different skills," he said.
"Countries which are in the same market, competing head-on with China, may suffer painful adjustments."
Lee, expected to be Singapore's next prime minister when Goh Chok Tong steps down within the next six years, said he favoured a free market approach to seize opportunites and create business.
"The way to promote enterprise is through less government intervention rather than more, he said.
"Silicon Valley depends on venture capital, not government grants. The attrition is ruthless, but the survivors are formidable."
(Chinadaily.com.cn 08/02/2001)
