Deep and strong ties with China

By Teo Chee Hean, Published The Straits Times, 29 Jul 2014

N EXT year, Singapore and China will celebrate 25 years of diplomatic relations. Our ties are deep and our cooperation is broad.

Last year, Singapore became China's top source of foreign investment with a total investment of US$7.33 billion (S$9.1 billion). China became Singapore's largest trading partner with bilateral trade amounting to US$73.1 billion. These figures are testament to the strength of our economic ties, and demonstrate Singapore's support for China's development and confidence in China's future.

Our bilateral engagement took off from the days of Mr Lee Kuan Yew and Mr Deng Xiaoping. Since then, generations of Singapore and Chinese leaders have built strong friendships. When Mr Deng visited Singapore in 1978, China was in the early stages of reform and opening up; industrialisation and economic development were major priorities.

In Singapore, Mr Deng saw a society that focused its energies on tackling these developmental challenges and found our experiences to be a useful reference for China. Singapore was most willing to share our experiences, as we wanted China to succeed.

Thus, by the time formal diplomatic relations were established in 1990, relations were already very strong. Chinese officials were making frequent visits to Singapore to exchange notes with their Singapore counterparts. Realising that mutual learning would be best achieved through direct, hands-on cooperation, Mr Lee proposed that our two governments undertake a joint project of unprecedented scale and ambition - the Suzhou Industrial Park (SIP).

In the two decades since, the SIP has become a tremendous success. Today, it serves as a useful model of urban and industrial development that has been replicated in other cities across China, such as Nantong (Jiangsu), Suqian (Jiangsu), Chuzhou (Anhui) and Korgas (Xinjiang).

In 2008, Singapore and China embarked on a second major project in Tianjin with a focus on sustainable development. The objective of building an eco-city was to seek out a balanced approach to address social and environmental concerns while supporting economic growth. The Tianjin Eco-City (TEC) also focuses on software, on the economic, social and environmental policies that make a city sustainable, vibrant and liveable. Our goal is to build a city that fulfils three harmonies: social harmony, economic vibrancy and environmental sustainability.

The SIP and TEC are two flagship projects undertaken by the Singapore and Chinese governments. In addition, there are a few other major projects established under the "private sector-led and government-supported concept". These include the Sino-Singapore Guangzhou Knowledge City, which aims to be a model and catalyst for economic upgrading and transformation; the Jilin Food Zone, which combines Singapore's experience in food safety and logistics with China's fertile natural resources and capabilities in agriculture; and the Singapore-Sichuan Hi-Tech Innovation Park, which supports China's Western Development Policy.

We continue to expand into new areas of economic and financial cooperation. Last year, Singapore became the first country outside Greater China to be designated as an offshore renminbi (RMB) clearing centre. As a major financial centre, we are pleased to play a role to support China's efforts to internationalise the RMB.

Recently, the People's Bank of China and the Monetary Authority of Singapore reached an agreement to introduce a pilot policy package that will facilitate cross-border RMB transactions. This will give a boost to China's RMB internationalisation efforts, while adding a new dimension to our cooperation in the SIP and TEC.

Singapore-China relations go beyond economics. Though we may differ in size and have different political systems, we share a unique friendship founded on deep cultural linkages and strong people-to-people ties. Our two countries highly value the development of our human resources. In line with this common priority, we have embarked on extensive human resource development cooperation. Over the past 20 years, close to 50,000 Chinese officials have visited Singapore to learn about our experiences.

There is also a growing stream of Singapore officials visiting China to learn from China and gain a better understanding of China.

Apart from bilateral cooperation, Singapore has always been a strong supporter of closer ASEAN-China relations. We have contributed to this in many ways.

The Singapore-China free trade agreement (FTA) concluded in 2008 paved the way for the subsequent China-ASEAN FTA, which has brought substantial benefits to the region. We are also working closely on the Regional Comprehensive Economic Partnership.

ASEAN and China share deep relations and multi-faceted interests which transcend any single issue. While there are differences between some ASEAN countries and China over territorial claims, we encourage all parties concerned to manage the differences through dialogue and to resolve the disputes peacefully, in accordance with international law.

ASEAN looks forward to working with China to expeditiously conclude a Code of Conduct in the South China Sea. This will help to enhance mutual trust and promote peace and stability in our region, paving the way for another golden decade in ASEAN-China relations.

This is an excerpt from an article published in Cankao Xiaoxi, a Chinese-language paper published by China's state media agency Xinhua.

S'pore, China looking at possible third joint project
Invitation to join new Asian bank might also be accepted
By Rachel Chang In Beijing, The Straits Times, 29 Jul 2014

SINGAPORE and China are exploring the possibility of a third government-to-government project after the Suzhou Industrial Park (SIP) and the Tianjin Eco-city.

The new joint venture was one of the topics discussed by Deputy Prime Minister Teo Chee Hean and Chinese Vice-Premier Zhang Gaoli here yesterday at a meeting that lasted more than an hour.

Mr Teo also "expressed Singapore's intent to accept China's invitation" to be a founding member of the Asian Infrastructure Investment Bank (AIIB), said the Singapore Ministry of Foreign Affairs (MFA) in a statement.

Mr Teo is in China for the second Singapore-China Social Governance Forum and to meet Chinese leaders.

Mr Zhang suggested a third joint venture last October, during a meeting of the high-level Joint Council for Bilateral Cooperation, which he and Mr Teo co-chair.

The new project would be in a yet-to-be-decided site in the western region of China. While less developed than the country's coastal east, it is the focus of a big urbanisation and modernisation push by the Chinese government.

No other details of the new joint venture were available; the Singapore MFA would say only that Singapore officials have been visiting China's western cities in exploration of the proposal.

Singapore's first government- to-government project with China was the SIP, which marks its 20th anniversary this year. It was set up in eastern Jiangsu province in 1994.

Envisioned as a magnet for foreign investment and high-tech industries in Singapore's mould, the 288 sq km park now boasts investments from close to a hundred of the world's top 500 companies.

The 30 sq km Tianjin Eco-city, which broke ground in 2008, was conceived as a model of ecologically conscious urban design. It has 10,000 residents and the aim is to grow this to 350,000 by 2020.

But the two joint ventures have not been without controversy. The SIP's early years were marred by the Suzhou government (which had only a 35 per cent stake in it) promoting an alternative park to foreign investors. The situation improved after the Singapore Government reduced its stake from 65 per cent to 35 per cent in 2001.

Tianjin Eco-city has grown more slowly than expected, Singapore officials have acknowledged. The building of its transport infrastructure, essential in attracting residents, has been delayed.

During their meeting yesterday, Mr Teo and Mr Zhang discussed "how the AIIB can complement existing multilateral development banks, stay open and inclusive, and draw upon the best practices of existing multilateral development banks in terms of governance and operations", said MFA.

The China-led bank, which is expected to have an initial fund of US$50 billion (S$62 billion) mostly from China, is meant to finance infrastructure building in the region. Analysts have said China's aim is for the new lending agency to rival the Japanese-controlled Asian Development Bank and other multilateral financial institutions such as the World Bank.

Mr Teo, who is accompanied on his trip by Minister for Social and Family Development Chan Chun Sing, Senior Minister of State for Trade and Industry and National Development Lee Yi Shyan and Parliamentary Secretary for Social and Family Development Low Yen Ling, will meet Chinese Communist Party Organisation Department chief Zhao Leji today before leaving Beijing for Chongqing.

S'pore social governance 'inspires China'
By Rachel Chang In Beijing, The Straits Times, 29 Jul 2014

CHINA has been greatly inspired by Singapore's social governance, be it the way the ruling party seeks out interaction with the people, or how the Government promotes a harmonious relationship between employers and workers, said top Chinese official Meng Jianzhu yesterday.

Speaking at the second Singapore-China Social Governance Forum, Mr Meng - who oversees China's judicial and domestic security apparatuses as secretary for the Chinese Communist Party's Political and Legal Affairs Commission - said he attributes Singapore's success in managing social challenges to its strict adherence to the rule of law.

"People's reverence towards the law and (their) compliance are established social behaviour," he said, citing observations from a 2011 visit to Singapore.

"Fair and strict law enforcement and judicial process make sure that violations come at a high price. These effective practices are very helpful for China in its efforts to promote the rule of law in social governance," he told an audience of 200 Chinese and Singaporean public servants who were gathered in Beijing for the biennial event.

Deputy Prime Minister Teo Chee Hean, who spoke after Mr Meng, said Singapore's laws set the outer boundaries of what constitutes acceptable behaviour between different groups.

But, he emphasised, with the exception of corruption, the Singapore Government tries not to tackle social issues through prosecution and penalties.

Rather, it crafts policies to shape interactions between groups and creates "common spaces" for them to mix easily and freely with one another. These include racial quotas in public housing estates to prevent ethnic enclaves from forming and setting up inter-racial and inter-religious community groups.

Minister for Social and Family Development Chan Chun Sing, delivering the keynote address for the Singapore side, said the common characterisation of Singapore's approach as one prizing "fa" (law) above "qing" (sentiment) is an overly simplistic one.

"While the rule of law backs us with the legal framework to enforce our social harmony, we only employ it as a last resort," he said.

Pointing to the way that institutions like national service throw young people of different backgrounds and social strata into close co-existence, allowing for mutual understanding to grow, he said "targeted social mechanisms" can encourage individuals to treat one another kindly and generously.

Political and Legal Affairs Commission secretary-general Wang Yongqing gave the keynote speech for the Chinese side, focusing on the way that social development has lagged behind economic development in China.

To achieve social fairness, he said, China's judicial system must be reformed and strengthened. It is only when the Chinese public can see that the justice system works that they will have faith in the authority of the law and turn to legal solutions for their problems, thus kick-starting a virtuous circle, he said.

Third Sino-S'pore venture 'must have impact across China'
DPM Teo says it should break new ground and serve as a model
By Rachel Chang In Chongqing, The Straits Times, 1 Aug 2014

THE third Sino-Singapore joint venture must be one that breaks new ground and has a nation- wide impact in China, and not just one that offers economic benefits on the local level where it is located, said Deputy Prime Minister Teo Chee Hean yesterday.

Speaking at the end of a four- day visit to China, DPM Teo told reporters it was premature to narrow down where it would be located, saying only that Singapore officials have visited Shaanxi and Sichuan provinces, Chongqing municipality and Xinjiang, and the Guangxi and Ningxia regions to explore the proposal first mooted by Vice-Premier Zhang Gaoli last October.

They will report back to Mr Teo and Mr Zhang at the next meeting of the high-level Joint Council for Bilateral Cooperation, which the two men co-chair.

One thing was clear, Mr Teo said. The third joint venture must be in an area that is important to the Chinese government in its broad development journey, and in which Singapore has expertise and so can contribute.

This would allow it to be a model for developments across China, like the first two Sino-Singapore projects were, Mr Teo stressed.

The Suzhou Industrial Park (SIP) in 1994 and the Tianjin Eco-City in 2008 "were executed at a local level (but with) an impact beyond the immediate pro- ject itself".

"In the early 1990s... the Chinese were interested in developing well-planned, integrated industrial parks. Of course, China is now able to develop such industrial parks... on its own and has done so very successfully," he said. "The Tianjin Eco-City is... in response to China's desire to develop their cities and new areas in an eco-friendly and sustainable way. It breaks new ground."

Social and Family Development Minister Chan Chun Sing said the two projects showed that Singapore was not just looking for short-term commercial benefits in its joint ventures with China.

The next one "will be a long- term project and demonstrate our confidence and commitment in China". It will also be a platform for the new generation of leadership in China and Singapore to solidify ties, he added.

Mr Teo and Mr Chan met one such Chinese leader yesterday: Chongqing party boss Sun Zhengcai, widely seen as a rising star with the potential to become the next premier or president. Mr Chan called Mr Sun "a dynamic man" who clearly knows what he wants to achieve.

Chongqing, with a population of 30 million, has ambitions to be the economic centre of the vast, western inland region. But its rapid development took a hit when its former party boss Bo Xilai was abruptly sacked and later jailed for corruption.

In discussing the third joint venture, Mr Teo stressed the gain to Singapore businessmen.

Singapore is already the second-largest foreign investor in Chongqing and the third-largest in Sichuan.

"In the same way that Singaporean companies have benefited from the positive atmospherics and demonstration of (their) capability in Suzhou and Tianjin, I think it will bring benefits to Singapore businesses as well."

He added that both those projects got an unexpected boost recently in becoming the ground zero of China's efforts to internationalise its currency.

It is now possible for firms in SIP and Tianjin Eco-City to conduct cross-border transactions in yuan.

China-backed bank to work with other lenders
By Rachel Chang, The Straits Times, 1 Aug 2014

THE Asian Infrastructure Investment Bank (AIIB), the nascent China-backed institution that will finance Asian countries' building needs, will work hand-in-hand with other multilateral lending agencies such as the World Bank and the Asian Development Bank (ADB), Deputy Prime Minister Teo Chee Hean said yesterday.

He and Chinese Vice-Premier Zhang Gaoli agreed on this during their meeting earlier this week, he said, when he expressed Singapore's intention to accept China's invitation to be a founding member of the bank.

The AIIB is widely seen as part of China's efforts to dilute the influence of existing multilateral financial institutions like the International Monetary Fund (IMF), World Bank and the ADB, which it believes is too dominated by the United States, Europe and Japan. Last month, China set up the New Development Bank with its Brics partners Russia, India, Brazil and South Africa. Beijing is pushing for the AIIB to be realised this year.

Asked about the geopolitical implications of Singapore joining the AIIB effort, Mr Teo said that he and Mr Zhang agreed that the bank should have an inclusive membership, work with other agencies like the World Bank and ADB, and adopt good governance standards.

"(These are) principles which all member nations would want to see as well," he said.