SINGAPORE, July 17 -- Singapore wants to see good relations between the United States and a rising China, which makes it possible for it to be friends with both, Prime Minister Lee Hsien Loong said on Thursday.

Speaking at a dialogue session at the Future China Global Forum, Lee said that there has to be an active engagement between the United States and China where third countries, including smaller ones like Singapore, can be friends with both.

"So far we have managed to be friends with both," he said.

Lee said that it is a big challenge to the world order to have a China emerging on such an enormous scale, with some 1.3 billion people going from poverty to almost middle income level within a little bit more than one generation. This means a very big change in economic relationships, the strategic landscape and the power balance, and it is not easy to reach a new equilibrium in a peaceful, stable way.

Nevertheless, he said that there are important shared interests between China and the United States like the U.S. Treasury securities held by the Chinese government and the U.S. investments in China.

"So there are important shared interests. It does not mean that they will definitely prevail but it gives a powerful incentive for the two countries to work together in a constructive way," he said.

"There has to be an active engagement. It cannot be one where one side takes on the role which the other used to play. It cannot be one where you are dividing the world into a G2. I think neither side feels comfortable with the term G2," Lee said.

Lee said that the preoccupations of Europe are primarily economic, and that it is seeing China as an important market after trade frictions that had been seen in the past receded in recent years.

Lee said that he expects increasingly tough challenges as China carries out deep-water reforms that may have an impact on existing interests.

The Singapore prime minister said that the Chinese leadership are aware of the difficulty, adding that he wishes China success in its reforms.

Singapore and China have had more than a good start in their bilateral ties over the past decades, not only in terms of the economic and trade ties but also the people links.

Nowadays 2.3 million Chinese visitors come to Singapore each year, he said.

Lee spoke highly of the Chinese people being open to learning from the development experience of other countries.

He said that he still saw opportunities for bilateral cooperation going ahead such as social management, joint investment in other countries and the growth of offshore Renminbi market.

He said that he "can imagine" China is willing to take part in the Trans-Pacific Partnership talks or eventually joins the trade pact, which is sometimes seen as an effort on the U.S. side to balance the rise of China on the economic front.

The two-day Future China Global Forum is organized by Business China, a bilateral cooperation promotion organization launched by the leaders of China and Singapore in 2007. China's former vice premier Zeng Peiyan, who is currently vice chairman at Bo'ao Forum for Asia, headed a delegation from China at the forum.