Lee said he personally delivered the warning to the Taiwanese leader years ago, Taiwan's Commonwealth magazine reported.

The former prime minister, who now holds the Cabinet title of minister mentor, said that a lot of pressure is on Taiwanese President Chen Shui-bian to improve relations with China.

"If (Chen) takes the wrong direction, he could bring a tragedy to himself ... and Taiwan would have to pay a price," he said in the interview last week in Singapore.

Lee, prime minister of the city state until 1990, had maintained friendly ties with Chen when the former Taiwanese opposition leader took power in 2000.

But relations between them strained after the independence-leaning Chen took a harder line on China.

Lee has long urged Taiwan to have direct air links with China and give up any attempts to declare formal independence - a move China has said would spark a war. The two sides split amid civil war in 1949.

"China and India will become the first and second largest economies in the world toward the end of the 21st century," Lee said in the magazine that hit newsstand on Wednesday.

"By 2050, the center of the world will definitely move to the Pacific, and it will be a situation beneficial to Taiwan and to Singapore," he added.

"But if Taiwan doesn't make changes, doesn't face the reality of the competition from China, Taiwan would lose in this race," Lee warned.

Lee noted Taiwan cannot decide on its future unilaterally but must heed the attitudes of Washington and Beijing. The US does not support Taiwanese independence for fear it could trigger a conflict that might involve American troops.

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