And changing the economic model would mean radically altering the social and political framework as well. This time, the national consensus for reform, and the will to change, has proved elusive. But given Japan's past ability to remake itself, it would be hasty to conclude that it will not do so again. China China offers an interesting contrast to Japan's experience of modernisation. In the 18th century, at the zenith of the Qing Dynasty, Emperor Qian Long promulgated a "closed door policy" to restrict foreign trade to the single port of Canton, cutting China off from Western technology and influence. In 1793, Britain sent Lord George Macartney on a diplomatic mission to request for broader trading opportunities and diplomatic representation in Beijing. The request was refused. The Emperor declared in his reply to King George III that China "possesses all things in prolific abundance and lacks no products within its own borders". The shiploads of manufactured products from the ongoing Industrial Revolution in Britain failed to alert China to the technological progress beyond its shore. Within 50 years, China's weakness and backwardness became painfully obvious. China was forced open by the western powers, and compelled to sign unequal treaties with them. Amidst internal unrest and foreign invasions, the Qing dynasty made repeated attempts to reform and modernise itself, but all these efforts failed. China was in political disarray, and the turmoil continued into the 20th century. Under the Communists, China established a centrally planned economy, rejected free markets and the profit motive, and emphasised egalitarianism.

We have thrived by being nimble and efficient, and by doing what is in the long-term interest of our people. These attributes have taken us from third world to first in one generation. In the process, we have remade ourselves at least twice. Third World to NIE The first phase of our take-off, from third world to NIE, started at the time of independence. Our success despite great uncertainties and dangers was the result of several paradigm shifts. The first shift was to industrialise our economy. Our entrepot trade had reached its limits, and going forward, the only way to create more jobs was to build a manufacturing sector. We started industrialising even before we joined Malaysia. Indeed, one major reason for Merger was to create a Common Market, so that our factories could sell to all the states of Malaysia. Such an import-substitution strategy was then the conventional wisdom for developing countries. Our factories produced mosquito coils, cosmetics, toys and garments, and we protected locally assembled cars, refrigerators, air-conditioners, and even a sugar factory with tariffs and quotas. But this vision of a Common Market of 10 million people did not materialise. Singapore never succeeded in getting its products into the rest of Malaysia tariff free. For this and other reasons, Singapore separated from Malaysia in 1965. We were now left with a domestic market of less than two million people. An import substitution strategy had become patently unworkable. We made another paradigm shift, to re-orientate our industries towards serving world markets.