Sunday, 8 November 2015

25 years of Singapore-China diplomatic relations

Low-key start to flourishing friendship
Singapore's pragmatic approach has guided its relations with China since ties were formalised in 1990
By Kor Kian Beng, China Bureau Chief In Beijing, The Straits Times, 6 Nov 2015

When Singapore and China formalised diplomatic relations on Oct 3, 1990, it was a no-fuss affair held in a function room at the United Nations complex in New York.

After signing a communique within two minutes, their foreign ministers Wong Kan Seng and Qian Qichen shook hands and made a "toast to our friendship".

This year, the two countries mark the 25th anniversary of diplomatic relations with a series of events and activities, capped by the exchange of state visits by President Tony Tan Keng Yam and his Chinese counterpart Xi Jinping, who arrives in Singapore today.

That day in October 1990 was the fruition of two important visits - the first by then Prime Minister Lee Kuan Yew to China in 1976, followed by Chinese patriarch Deng Xiao- ping's visit to Singapore in 1978.

Though bilateral trade and exchanges had grown healthily in the intervening years, Singapore, keen to dispel any notion of being a third China, made a deliberate decision to hold off formalising ties until all its fellow Asean founding members - Indonesia, Malaysia, the Philippines and Thailand - had done so.

Singapore's pragmatic approach, which reflects its awareness of geopolitical concerns, has guided its relations with China over the years.

Ambassador-at-large Tommy Koh, who led the Singapore side in talks with China, said the signing was kept low-key as "Singaporeans are a very pragmatic people".

"We attach more importance to substance than to form," he told The Straits Times. "The bilateral relationship has expanded in all directions, in depth as well as in breadth. Both sides view this as a very important bilateral relationship."

In fact, Mr Lee was quoted as saying in July 1990 that establishing diplomatic ties was not such a great event as the relationship depended more on whether China would be contributing to peace and stability or to instability by exporting revolution.


Still, the establishment of diplomatic relations gave an early boost to bilateral ties and cooperation. President Wee Kim Wee was Singapore's first head of state to visit China in September 1991. His Chinese counterpart Yang Shangkun visited Singapore in January 1992.

China is now Singapore's largest trade partner, with two-way trade reaching $121.5 billion last year. Singapore's cumulative investments as of last year totalled US$72.3 billion (S$101.9 billion). It has been China's largest foreign investor since 2013, based on figures in the first nine months of this year.

The number of trade and study missions to Singapore hit a record 142 in 1992 from 63 a year earlier. Close to 50,000 Chinese officials have visited Singapore on study tours or training trips so far.

Bilateral cooperation deepened after Deng went on his famous Southern Tour of coastal provinces in 1992 to revitalise China's reforms and cited Singapore as a model for China's development.

His remarks prompted a flow of officials to Singapore keen to learn about its experiences. Soon after, Mr Lee proposed a joint project to facilitate transfer of knowledge and build ties between younger leaders.

It led to the setting up of the Suzhou Industrial Park (SIP) in 1994 as a model for China's urban and industrial development.

Buoyed by the SIP's success, both sides in 2008 began another government-led project - Tianjin Eco- City - as China sought solutions in balancing environmental concerns and economic growth. In the same year, both countries signed the China-Singapore Free Trade Agreement (CSFTA), the first comprehensive bilateral FTA that China inked with another Asian country.

Since 2010, both sides have launched a new model of collaboration - led by the private sectors and supported by the governments - through various projects such as the Guangzhou Knowledge City.

The arrival of pandas Kai Kai and Jia Jia from China in 2012 was another high point in bilateral ties.

Singapore-Sino expert Sun Jing- feng of Henan Normal University said that because they share similar cultures and traditions, the two countries have a unique relationship.

"We were lucky that Lee Kuan Yew and Deng Xiaoping were leaders at the time that their countries had complementary needs. China was eager to learn governance expertise from others and Singapore was keen to tap the Chinese market," Professor Sun told The Straits Times.

Mr Toby Koh, 45, group managing director of Singapore security solutions firm Ademco, said close ties and Singapore's image as a clean, high-tech society were two factors that helped his firm enter the Chinese market in 1995 and set up its first joint venture in the remote north-western Gansu province.

Since 2011, Mr Koh has noticed more Chinese firms seeking out cyber-security services from Ademco.

"Chinese clients say they are more comfortable doing business with Singapore. This trust couldn't have happened overnight," he said.

Closer ties have also led to more people-to-people exchanges.

Mr Tan Ming Jiang, 25, a final- year student at the National University of Singapore's School of Design and Environment, said that taking part in a two-week exchange programme in 2013 led him to apply for a master's programme at Tsinghua University in Beijing next year.

"Interactions with my Chinese peers opened my eyes to their thinking and motivation in life - stuff I would not have learnt from textbooks," he told The Straits Times.


For sure, there have been some low points in bilateral relations.

For instance, Mr Lee, on a visit to China in 1997, publicly lamented the slow progress at the SIP and criticised local officials for diverting investments to a rival business park.

The dispute was resolved after Singapore reduced its 65 per cent majority stake so as to increase the sense of ownership on China's part.

Ties also took a dip in 2004 over a private and unofficial visit by then Deputy Prime Minister Lee Hsien Loong to Taiwan in July - before he became Prime Minister in August - to meet friends he last saw in 1992. The trip angered China, which suspended key bilateral exchanges.


Nevertheless, the relationship that both sides have often described as special, has remained strong.

Apart from commemorating 25 years of formal ties, Mr Xi's visit is expected to mark progress on new areas of cooperation, such as a third government-led project in western China with a theme of modern connectivity and modern services.

Financial cooperation has become a key area as well. Singapore is now the largest offshore renminbi centre outside China. Singapore has also backed Beijing-led initiatives such as the Asian Infrastructure Investment Bank and its plans to revive two Silk Road routes.

But there are challenges, such as maintaining the value of Singapore's branding amid cooperation with China.

Singapore-based analyst Hoo Tiang Boon of the S. Rajaratnam School of International Studies said Singapore also faces the challenge of striking a delicate balance between China and the United States.

"This is not a new factor, but Singapore must constantly be alert to 'new' dynamics that point to the development of a serious rivalry between the US and China," he added.

As for Singaporean businesses, Mr Wu Hsioh Kwang, 65, executive chairman of Straco Corp which entered the Chinese market in 1980, said they need to view China with a new perspective as it has become stronger and its enterprises are raring to expand overseas.

"We need to stop asking what we can do in China and start asking what we can do and identify the opportunities as China steps out," the vice-president of the Singapore Chinese Chamber of Commerce and Industry told The Straits Times.

Strategically, both sides will need to continue building mutual trust at all levels and expanding economic cooperation, said Prof Sun.

"If both sides maintain the principle of mutual understanding and respect for each other's core interests, even on the Taiwan and South China Sea issues, the relationship will continue to produce win-win outcomes," he added.

Key milestones over the years
By Esther Teo, China Correspondent, The Straits Times, 6 Nov 2015

Singapore and China mark 25 years of close diplomatic relations this year. The Straits Times China Correspondent Esther Teo traces the significant milestones in the bilateral relationship.

May 1976: Mr Lee Kuan Yew makes his maiden visit to China as Prime Minister. He meets Chinese leader Mao Zedong and Premier Hua Guofeng.

November 1978: Chinese paramount leader Deng Xiaoping makes his first and only official visit to Singapore - the last stop of his three-nation tour of South-east Asia that includes Thailand and Malaysia.

At a Communist Party gathering held the following month, Mr Deng gives his backing to reforms that lead to 30 years of rapid economic growth for the country.

Dec 29, 1979: Singapore's Finance Minister Hon Sui Sen and Mr Deng sign a trade agreement to set up respective trade representative offices in 1981 to strengthen economic links between the two countries.

May 15, 1985: Commercial air services between China and Singapore commence. All seats on the first two Singapore Airlines flights to Beijing via Shanghai in the week are taken up.

Oct 3, 1990: China and Singapore officially establish diplomatic ties. Thereafter, both countries proceed to upgrade their trade representative offices into embassies.

December 1990: China's first ambassador to Singapore, Mr Zhang Qing, assumes his post.

July 1991: Singapore's first ambassador to China, Mr Cheng Tong Fatt, assumes his post.

Jan 7 to 10, 1992: Chinese President Yang Shangkun makes a four-day state visit to Singapore, the first by a Chinese head of state.

January to February 1992: Mr Deng makes his famous Southern Tour of China's coastal provinces to push economic reforms further. His favourable impressions of Singapore lead him to hail the Republic as a model of development for China to emulate.

April 27, 1993: Singapore plays a key role as a facilitator of cross- strait ties. It is the venue of the first high-level meeting between the two sides, with Mr Wang Daohan, the head of China's semi-official Association for Relations Across the Taiwan Straits, holding talks with his Taiwanese counterpart Koo Chen-fu of the Straits Exchange Foundation.

Feb 26, 1994: Senior Minister Lee Kuan Yew and Chinese Vice-Premier Li Lanqing sign an agreement in Beijing for the joint development of the Suzhou Industrial Park, the first government-level flagship project.

Jan 1, 2001: Singapore's majority stake and management control over the Suzhou Industrial Park are officially transferred to the Chinese side to incentivise the local government to support the project. Singapore's share in the venture is reduced to 35 per cent from 65 per cent.

May 14, 2004: The first Joint Council for Bilateral Cooperation (JCBC) meeting kicks off in China, with Deputy Prime Minister Lee Hsien Loong and Vice-Premier Wu Yi as co-chairs. The JCBC remains the highest-level mechanism for bilateral cooperation.

Nov 18, 2007: Prime Minister Lee Hsien Loong and Premier Wen Jiabao sign a framework agreement for Singapore and China to jointly develop the Sino-Singapore Tianjin Eco-City. This is the second government-to-government-level project.

Aug 17, 2008: Singapore's women's table tennis team comprising Li Jiawei, Feng Tianwei and Yang Yuegu ends the Republic's 48-year Olympic medal drought, winning a silver at the Beijing Olympics. Singapore's second Olympic medal comes after weightlifter Tan Howe Liang's Olympic medal, also a silver, at the 1960 Olympics in Rome.

Oct 23, 2008: China and Singapore sign their free trade agreement (FTA) after eight rounds of negotiations over two years. It is the first comprehensive bilateral FTA that China has inked with another Asian country.

May 2010: The first Chinese-language programme offered by the Lee Kuan Yew School of Public Policy commences. Targeted at senior Chinese government officials and business leaders, the 10-month Master in Public Administration and Management programme starts with its first batch of 57 students.

May to October 2010: Singapore builds a 3,000 sq m music box-like structure with the theme "Urban Symphony" at the Shanghai World Expo. This is the Republic's largest pavilion in its 10-year history of participating in the World Expo. Some 190 countries participate in the six-month-long Shanghai expo.

June 30, 2010: The ground-breaking ceremony kicks off for the Sino-Singapore Guangzhou Knowledge City, which is meant for high-value industries and creative talent.

The project, which has Temasek unit SingBridge in a 50-50 joint venture with the Guangzhou provincial government, marks the dawn of the new "private sector- driven, government-supported" model.

Sept 9, 2010: The ground-breaking ceremony begins for the first project in the Sino-Singapore Jilin Food Zone, another private sector- led project. The project in north- eastern Jilin province aims to diversify food sources for Singaporeans.

Sept 6, 2012: Pandas Kai Kai and Jia Jia arrive in Singapore on a 10-year loan. China's President Hu Jintao announced in November 2009 that they would be given to the Republic to mark 20 years of close diplomatic ties in 2010.

January 2014: Singapore earns the title of China's largest foreign investor for the first time with US$7.3 billion (S$10.3 billion) worth of investments in 2013, official data shows.

July 28, 2014: Singapore and China announce that they are exploring the possibility of a third government-to-government project after the Suzhou Industrial Park and the Tianjin Eco-City.

June 1, 2015: Singapore extends the validity of visas issued to Chinese nationals to a maximum of 10 years. This makes it more convenient for Chinese tourists to visit Singapore.

Nov 6 to 7, 2015: Chinese President Xi Jinping visits Singapore to mark 25 years of diplomatic relations, his first to the Republic since he became China's leader in November 2012. The third government-to- government project is expected to be announced during his visit.

Conditions for partnership even better now
To mark the 25th anniversary of ties between Singapore and China, Prime Minister Lee Hsien Loong sat for an interview with Lianhe Zaobao. He spoke in Mandarin about the "Singapore brand" in China, territorial disputes in the South China Sea and the prospects for the bilateral relationship.
The Straits Times, 6 Nov 2015

On Singapore's third government-to-government project with China

We are embarking on this project at a time when China is undergoing institutional reform. What Singapore could do, and which also lay at the heart of our bilateral cooperation, was to help China pursue the developmental path that it has decided for itself.

When we started the Suzhou Industrial Park (SIP) in 1994, the project addressed a particular set of challenges specific to a particular era. China no longer needs another SIP. What China faces now is the issue of institutional reforms. China has already built up its cities and basic infrastructure. What they need to do is to reform their institutions and link up the transportation networks across the country.

Compared to other countries, the cost of domestic logistics within China is rather high. The logistics network is not very accessible and there are many barriers. If China intends to reform and invest in this area, we are willing to work with China and undertake a project together, with the aim of helping China pursue the developmental path that it has decided for itself.

Singapore takes government-to- government collaborations seriously. They should be of value to both parties and not be a burden. We do not take a purely commercial view on such projects but neither can these projects lose money indefinitely.

If your only goal in this collaboration is to profit in monetary terms, you would be missing the point. This project should not only be commercially viable, but also support the development of China. Through policy innovation and pilot-testing of new policies, the project can catalyse the overall development of the western region. So we should not focus on the short-term commercial benefits. Rather, we should take a long-term view and take advantage of the opportunities and innovative measures to break new ground.

Singapore enterprises can draw on their experience doing business with multinational corporations, and use this as the basis for working with Chinese enterprises in this project. This project will strengthen the "Singapore brand" in China.

Of course, we cannot expect Singapore enterprises to make losses indefinitely, so we must achieve a good balance between commercial interests and strategic interests.

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Posted by Lianhe Zaobao on Thursday, November 5, 2015

On the Tianjin Eco-city, Singapore's 2008 bilateral project with China

The cost of building an environmentally friendly city is high, and especially so for the Tianjin Eco-city because it was built on a site with harsh conditions, such as saltpans and polluted water-bodies. There is also competition for human resources because the Eco-city is quite close to more developed cities such as Tianjin city and Beijing.

So we need the Chinese authorities' continued investment and attention to create favourable conditions for the project to succeed, such as by improving its transport connectivity. The development of Binhai New Area must also be taken into account, due to its large area - several thousand square kilometres. The Eco-city is only a small part of it, so it is a challenge to stand out, maintain demonstration value and ensure commercial viability. But, overall, the Tianjin Eco-city has done well, and its development beyond the Start-Up Area is highly anticipated. There are growth opportunities arising from the Beijing-Tianjin-Hebei integrated development.

On the 'Singapore brand' in China

Some have described the impact of SIP as being similar to Daqing and Dazhai, the model industrial and agricultural projects initiated by Chairman Mao Zedong. I would be cautious about overstating SIP's impact. That said, many officials hailing from different parts of China have visited SIP (and) many want us to set up similar industrial parks in their provinces and cities.

While many provinces would like Singapore to set up industrial parks, we must be judicious with the "Singapore brand" and not dilute it, otherwise, it will soon lose its value.

The reality is that China already has the resources, capability and experience to initiate its own development programmes. But local governments see the value of the "Singapore brand" in attracting foreign investments, and in their relationship with the central government.

For the project to be successful, Singapore must leverage on our strengths. We have to do our homework and research carefully, discuss with stakeholders, and select projects that play to our strengths.

Most importantly, Singapore must be successful. If we were not successful, we would lose relevance and value.

As China deals with its domestic challenges, it may find Singapore's experience and ideas useful as a reference.

Our officials have observed how China's interest in Singapore has changed over the years. In the beginning, the officials wanted to know how we attracted businesses and investments, and built modern industrial parks. In recent years, the interest has been in social management. While it is impossible to transplant Singapore's model into China, the Chinese officials are studying our system closely.

On territorial disputes in the South China Sea

Singapore is not a claimant state. We do not take sides. However, we are part of Asean. As a regional organisation, Asean has its views on the South China Sea issue and has an interest in regional peace and stability. As a small country highly dependent on trade, we regard the right of freedom of navigation and overflight as well as the upholding of international law seriously.

The territorial and maritime disputes in the South China Sea are not just an issue between a few countries, as they affect all Asean countries. Asean, as the regional organisation, cannot turn a blind eye. Hence, Singapore supports Asean's goal of concluding a Code of Conduct in the South China Sea with China as soon as possible

Singapore has just taken over the role of country coordinator for Asean and China Dialogue Relations. Asean and China already have a comprehensive and substantive agenda for cooperation, and we hope to continue making progress and build closer relations.

On the more difficult issues, such as the South China Sea dispute, Singapore will be a fair and objective coordinator, in order to help China and Asean reach a consensus, and continue supporting peaceful development in the region.

On prospects for bilateral relations

In the 25 years since we established formal diplomatic ties, the relationship between Singapore and China has greatly strengthened. We have far surpassed the economic cooperation and trade volume targets that we set out 25 years ago.

Currently, the conditions for a continued partnership are even better than before. China has undergone drastic change and Singapore too is very different from 25 years ago. Whether in culture, tourism, business, economy or in tertiary education, there are many opportunities for us to continue enhancing our cooperation.

Bilateral trade and investment going strong
Business community hoping to learn about upgrades to free trade pact, details of third proposed joint project
By Chong Koh Ping, The Straits Times, 6 Nov 2015

Trade and investment between Singapore and China have shot up since formal ties were established 25 years ago, with even more growth tipped once the free trade agreement is upgraded and the next joint project gets under way.

Much will be riding on Chinese President Xi Jinping's trip as he arrives today on his seventh visit to Singapore, and his first as President.

The business community is hoping to hear more about upgrades to the China-Singapore free trade agreement that came into force in January 2009. Others are awaiting details of the third proposed joint project, which is tipped to be in either Chengdu, Chongqing or Xi'an. This could help Singapore firms tap the new wave of growth in the western region of China.

DBS economist Irvin Seah notes that Singapore's economic relationship with China will "only continue to strengthen and not diminish in the near term". China is an important driver for the local economy, a point underlined when it overtook the United States to become Singapore's largest non-oil export destination in 2010, he adds.

In terms of total trade, China surpassed Malaysia to become Singapore's largest trading partner in 2013. Trade volume between the two countries reached $121.5 billion last year, a 23-fold increase from $5.2 billion in 1990, according to IE Singapore data.

While Singapore has benefited from China's burgeoning growth, the close relationship also has its challenges as seen by the drag on the economy here due to a slowing China, says Mr Seah.

However, he maintains that Singapore will remain an important financial hub for Chinese companies and their regional operations as more of them make forays into South-east Asia.

This is evident in the growing volume of yuan transactions and the rising size of yuan deposits here.

Both countries have stepped up cooperation in the financial sector. Singapore's central bank doubled the size of its bilateral currency swap facility with its China counterpart to 300 billion yuan (S$66.2 billion) in March 2013 to promote financial stability and trade.

Singapore also became the first offshore yuan hub outside Greater China that year with the Industrial and Commercial Bank of China (ICBC) being designated as the only bank to clear offshore yuan transactions in the country.

Within a year, Singapore overtook London to hold the largest share of the world's yuan payments outside Greater China last year.

Both countries took the financial cooperation a step further last month when they inked a deal to broaden the cross-border yuan channels to Suzhou and Tianjin.

Under the new rules, companies in the two Chinese cities can now borrow yuan from banks in Singapore. The companies are also able to repatriate 100 per cent of the funds raised through issuing yuan bonds in Singapore.

These are seen as significant moves for Singapore as a financial centre as banks here can now play a bigger role in trade and investment flows between China and the region and beyond.

In addition to trade and financial cooperation, Singapore's deep economic ties with China are also underscored by the size of its investment in the country. Last year, Singapore was China's largest foreign investor for the second consecutive year, with investments totalling US$5.8 billion (S$8.2 billion) in more than 700 projects, says IE Singapore.

Many attribute Singapore's large investments in China to the two flagship government-led projects - the Suzhou Industrial Park and the Sino-Singapore Tianjin Eco-city - which helped pave the way for Singapore businesses to expand their operations in China.

Local companies have been attracted to invest in coastal provinces such as Jiangsu, Zhejiang, Shandong and Guangdong.

Singapore has set up seven bilateral business councils in these provinces, where more than 70 per cent of its investments from here are concentrated, to promote greater cooperation at the regional level.

Each of these business councils is represented by a minister from Singapore and a top provincial official from China. The councils usually meet once a year.

Since 2010, Singapore firms have also been encouraged to invest in "private investor-led, government-supported" industrial park projects in different parts of China. These include the Guangzhou Knowledge City, the Jilin Food Zone, the Singapore-Sichuan Hi-Tech Innovation Park and the Nanjing Eco High-Tech Island.

Mr Yew Sung Pei, assistant chief executive of IE Singapore, says there is a trend of more Singapore companies venturing into the services industry in China, in sectors such as education and healthcare.

He sees "increasing opportunities" spurred by China's new growth strategies spelt out by President Xi's "One Belt, One Road" initiative and Premier Li Keqiang's "Internet-plus" digital drive.

New joint project will boost Singapore's yuan-hub status
By Chong Koh Ping, The Straits Times, 6 Nov 2015

Singapore's fast-growing yuan links with China will only deepen and further boost the country's role as a leading offshore centre for dealing in the currency, said Industrial and Commercial Bank of China (ICBC).

The bank believes a major impetus will come during Chinese President Xi Jinping's visit today.

It is expected that the visit will include the announcement of the location of Singapore's next joint project with China, with one of three western cities - Chongqing, Chengdu and Xi'an - in the running.

While the exact details of this third government-to-government project are yet to be announced, it should still promote increasing currency links between the two countries, said Mr Zhang Weiwu, general manager of ICBC Singapore.

He pointed out that the two bilateral projects already under way - the Suzhou Industrial Park and the Sino-Singapore Tianjin Eco-city - have underpinned the expansion of yuan channels between Singapore and the cities of Suzhou and Tianjin.

Mr Zhang hopes the central banks of China and Singapore will roll out "innovative yuan policies" for the new project, which is based on the theme of "modern connectivity and modern services".

"I'm only guessing but, for a start, they could extend the new rules to the third area, which will mean an even more widespread use of the yuan," said Mr Zhang in Mandarin.

New monetary rules already allow firms in Suzhou and Tianjin to borrow money from Singapore banks and to transfer funds back home from yuan bonds issued here.

ICBC is the only yuan-clearing bank in Singapore, so a new project will present opportunities for it to leverage on its competitive advantage to provide yuan liquidity and expand its range of yuan-denominated products. Last year, it was the first bank to complete cross-border yuan loans from Singapore to the Shanghai Free Trade Zone, Suzhou Industrial Park and Guangxi Financial Reform Pilot Zone.

Mr Zhang said China's "One Belt, One Road" initiative will also present many opportunities for using the yuan in Singapore and across the region.

The initiative seeks to build better connectivity along the maritime route that links South-east Asia to China and, in turn, bring a new wave of Chinese companies looking to invest in major infrastructure and development projects in the region.

"Singapore serves as a base for these companies to expand into South-east Asia, given its many competitive advantages, including being one of the most liveable cities, having the best business environment, as well as being a leading wealth-management hub and financial centre," said Mr Zhang.

Singapore is already the biggest offshore yuan hub outside of Greater China, so more economic activity, whether in the form of the new project or from other initiatives, will only cement its position, he added.

ICBC has seen sustained growth in its yuan-clearing volumes here. It cleared 47.1 trillion yuan (S$10.4 trillion) of transactions in the first nine months of this year, up 97 per cent from the same period last year.

Yuan deposits in Singapore rose 27 per cent year-on-year to 322 billion yuan in the three months to June 30, according to the Monetary Authority of Singapore.

"Singapore has risen to become China's second-biggest investment destination in the first eight months of this year," said Mr Zhang, referring to statistics from the Chinese Embassy. "I'm full of confidence that the depth and breadth of Singapore's bilateral trade and economic ties will grow deeper in the next 25 years."

One Belt, One Road, many opportunities
CapitaLand says it can contribute and benefit from China's new growth strategy
By Chong Koh Ping, The Straits Times, 6 Nov 2015

Property giant CapitaLand is well- poised to ride on the new growth strategy that China is building around two of its ancient trading routes.

Chinese President Xi Jinping proposed the "One Belt, One Road" initiative in 2013. This seeks to improve connectivity across 65 countries over three continents via an overland belt that links China with Europe and a sea route that passes through South-east Asia, Africa and the Middle East.

CapitaLand president and group chief executive Lim Ming Yan said the firm, which first ventured into China about 21 years ago, will be able to "contribute and benefit" from this growth driver, both within and outside the country.

The developer has a presence in several major cities such as Chengdu, Chongqing and Xi'an in western China, where the overland belt begins.

It plans to work with Chinese companies to invest in major markets on the sea route, as well as in Australia, Europe and the United States.

"Development of China is not just in the coastal region, eventually it will go to central China and the western part of China," said Mr Lim.

The "One Belt" strategy will stimulate growth in the western region, creating demand for real estate and serviced apartments and increasing overall consumer spending, noted Mr Lim, who added that CapitaLand is well-positioned to take advantage of opportunities.

China is one of its two core markets and the group's largest outside of Singapore. Its business in China comprised 45 per cent, or $20.7 billion, of the group's total assets of $45.6 billion as at June 30, excluding treasury cash.

CapitaLand has built up a diverse portfolio in the country, including serviced residences and mixed-use developments, since 1994.

It is the largest foreign real estate player in China by gross floor area. It owns or manages more than 160 properties in 48 Chinese cities worth $31.9 billion.

Mr Lim thinks that China's foray into South-east Asia through its "One Road" thrust bodes well for the group's businesses in the region.

The Chinese initiative calls for improving connectivity through infrastructure building. This will help uplift the economies in the region which, in turn, will create more demand for real estate development.

Opportunities can also come in the form of partnerships with Chinese companies in these markets.

Mr Lim pointed out that CapitaLand has already started working with a number of Chinese construction companies in Vietnam, which had previously done "good work" for it in China.

"We are now quite happy to work with them outside of China."

It is also in talks with Chinese companies to collaborate on a pilot project in Jakarta.

Mr Lim, who spent nearly a decade developing CapitaLand's business in China, said that many Chinese companies are starting to look at investing in real estate projects outside the country.

"This is where CapitaLand really differentiates (itself) from many other companies. We have a significant presence globally.

"Going forward, we'll also be happy to work with partners from China to invest in the other regions, whether in Australia or Europe or the US."

While some of these Chinese developers may not yet be ready to commit to large-scale projects outside the country, some smaller players such as retailers have made the move to partner CapitaLand to go overseas.

Haidilao, the immensely popular hotpot chain from China, is one such retailer that CapitaLand has brought out to Singapore.

"They were in our malls in China, and they are now doing good business here in Singapore," said Mr Lim.

He conceded that not all the Chinese retailers are interested in expanding overseas as the domestic market is already big enough for them. But for those that are ready to do so, CapitaLand will be able to help them penetrate markets through its network of malls in key gateway cities in South-east Asia and other parts of Asia.

"This will give us a network, and offer value to the Chinese retailers and to the Singapore retailers, for example, if they want to go to China," Mr Lim said. "We can also offer value to international retailers who are able to offer something different to the Chinese consumers."

Chance to tap China's shift to consumer-led growth
By Chong Koh Ping, The Straits Times, 6 Nov 2015

Singapore firms should capitalise on China's shift to consumer-led growth by investing in its services sector, said the Singapore Chinese Chamber of Commerce and Industry (SCCCI).

The chamber hopes the upgraded version of the free trade agreement (FTA) that is under discussion will remove more barriers for companies in the financial, logistics and healthcare services sector when they enter the Chinese market.

"We hope that the revised FTA could expand its scope, and lift more restrictions in the modern services sector," said SCCCI president Thomas Chua.

Since Singapore's FTA with China took effect in January 2009, bilateral trade and investments have grown steadily. In 2013 and last year, Singapore was China's largest foreign investor and fourth-largest trading partner in Asia. China remained Singapore's largest trading partner and export destination last year.

Mr Chua pointed out that Singapore has a competitive advantage in services, where the emphasis is on "solutions and knowledge".

Investing in services differs from that in manufacturing and it is an area where Singapore companies could do well in China.

Mr Chua said: "We have been developing our financial sector as well as other related sectors such as insurance and legal services over the past few decades, especially in supporting the multinationals that are investing in Singapore to build their regional operations."

He wants Singapore companies to take advantage of their expertise and further build on the country's branding to expand in China. "This is different from having to compete with countries and regions such as Taiwan and South Korea, which are traditionally strong in manufacturing. This could be an important trend (for Singapore's investments in China), going forward."

Time for rethink of Singapore's position
By Wang Gungwu, Published The Straits Times, 6 Nov 2015

It may only be a happy coincidence but Chinese President Xi Jinping's visit today after Washington and London confirms that Singapore is not only the Red Dot of South-east Asia but also a city in a powerful global system.

At the same time, Singapore is a member of Asean, and a rising China is interested in restoring its historic position in the region. This may be a good moment to ask, how does all this fit together?

Mr Xi's London-Washington visits remind us that the British imperial order of the 19th century placed Singapore in a key position in its war and trade framework, enabling the British to be strategically poised for action in Asia for more than 100 years.

When World War II ended, that order was inherited and extended by the United States. Lodged in the United Nations but divided by Cold War rivalries, the new world order was seen by many in the US as an American responsibility when the Soviet Union collapsed in 1991.

During all that time, Singapore was an important link in the global chain that the Anglo-American order had constructed in Asia and one that was vital to the South-east Asian sub-order. Singapore's leaders after independence understood that and the city-state paid close attention to its place in that structure.

Following the rise of the People's Republic of China and the emergence of Asean as a regional community, Singapore has responded to both with sensitivity. When more protagonists came forth and became assertive, Singapore continually reassessed its position in the Anglo-American order it has grown under. With Mr Xi's visit coming so soon after visits to Washington and London, this is time for a rethink.

Behind the ideal of international order, Singapore developed to become the global city that would serve the region as a commercial hub. It has also acted as a financial centre for multinational companies, and even as an Asian haven.

Comparisons with Switzerland are no longer wishful thinking. Given the economic shift eastwards to Asia and the US' military rebalancing, the recent talk of China and the United Kingdom building a global partnership may have a new relevance. London's financial institutions and those in Singapore will provide further global range to the city-state's position, something that the Asean economic community is likely to value. The region would be interested to know if Mr Xi's visit will give further lift to Singapore's financial networks.

Asean and several of its member states are going through a testing time. Where China's plans and intentions are concerned, Singapore can continue to play the communication and explanatory role that it has done well in the past. The role demands considerable political skills.

At present, deep fissures over territorial claims in the South China Sea have caused relations with China to be unusually confrontational. Mr Xi has visited many countries in South-east Asia in the past two years, so the other states may not have high expectations of this visit to Singapore. Nevertheless, it will be in Singapore's interest to do what it can to push for some reassuring arrangements, for example, the Code of Conduct that many have been waiting for.

When Mr Xi comes to Singapore after Washington and London, there will be many who wonder what this set of meetings - two along the Atlantic seaboards and the third in the heart of the Indo-Pacific Ocean - might mean for our region. Given the shift of global economic development towards Asia, the initiative of late seems to lie with China. It would be natural for South-east Asian nations to ask what China's plans are for its nearest neighbourhood.

China's history has a very different trajectory from those of the UK and the US.

The nature of the Chinese state had been shaped by traumatic attacks for millennia, almost all coming from overland. Strong centralised institutions were created to fight off its powerful enemies and teach the conquerors to respect its distinct civilisation. Over the centuries, the people who became Chinese were willing to learn what they wanted from those they came into contact with. This capacity to do so has always strengthened their faith in the resilience of their inherited values.

China is conscious that, whenever it was unified, it was the region's superpower. Its precipitous decline and fall after 1800 had shamed its people. Three generations of leaders then struggled to recover from threats to undermine the civilisation's core values, in recent times coming mostly by sea.

They went through two costly revolutions to rebuild structures that would enable the country to safeguard its future development and security. They have taken hundreds of millions of people out of poverty, mastered the tools of modernisation, and made the world look to China's economy for future development. All this they have done in less than 40 years. Thus the country has moved past the century of victimhood, and can now claim the right to have its say in world affairs.

Furthermore, their history had taught them that change is always to be expected and that the rules of political behaviour are man-made. Their recent experiences confirm that this is still true. For example, the British maritime order of empires in the 19th century was replaced by a world order dominated by the US. Since 1945, this has been anchored by a system of modern nation-states working through the UN.

But nothing has stopped decisions being made by a variety of protagonists that have changed the status quo. Events since 1945 confirm that nothing can be taken as God-given and sacred.

This reality makes for an uncomfortable world in which there can always be surprises. It is, therefore, every country's duty to be alert and prepare for the worst.

Recent developments suggest that China is looking to produce a regional order that flows with deep historical currents, something that those concerned would agree is normal and natural. In that context, Mr Xi's visit leads to the question, how does he view Asean and the role of Singapore?

As a region, South-east Asia has grown important as part of an Anglo-American global order that successfully survived the war of ideologies. Asean today seeks to construct its own community of interests that connects the neighbouring regions of East Asia, South Asia and Oceania. This is new and China does accept that this goal is beneficial to regional order. What is not clear is the residual links that such an order will have with the global chain that was once anchored in London and Washington.

Here, the three visits to Washington, London and Singapore in a row may lead to some clarification.

Singapore is a key link in the global chain and could also be a pillar of future regional order. If these two roles remain important for Singapore's safety and prosperity, China would want to know how it intends to play them.

China has lately come to feel that it has been widely portrayed as an outsider who is elbowing into areas where it has no right to be.

It may wonder if this global city-state is in a position to help dispel that image and make contributions towards the emergence of a regional order that is appropriate for a rising Asia.

Wang Gungwu is University Professor, National University of Singapore, and chairman of the East Asian Institute and the Iseas-Yusof Ishak Institute.

China on my mind
By Tommy Koh, Published The Straits Times, 7 Nov 2015

I join Singaporeans of all races in warmly welcoming President Xi Jinping and Madam Peng Liyuan to Singapore.

Their state visit reciprocates the successful visit by President and Mrs Tony Tan Keng Yam to China in July this year.

The exchange of visits by the two Presidents is part of our celebration of 25 years of diplomatic relations between China and Singapore.


I last met President Xi in November 2010 in Singapore. He was then Vice-President of China.

The National Heritage Board, of which I was the then chairman, had put up a marker to and a bust of Mr Deng Xiaoping in front of the Asian Civilisations Museum.

We invited our founding Prime Minister, Mr Lee Kuan Yew, a friend and admirer of Mr Deng, and Mr Xi to unveil the marker and the bust at a simple ceremony. We were overjoyed that both Mr Lee and Mr Xi accepted our invitations. I will always treasure the memory of that happy occasion.


China's seat at the United Nations had been occupied by the Republic of China (Taiwan) from 1945 to 1971.

In 1971, the People's Republic of China (PRC) defeated the Republic of China in a vote at the UN General Assembly.

Following that vote, the PRC took over the seat at the UN. The first PRC ambassador to the UN was an outstanding diplomat called Huang Hua.

In 1974, I was appointed, for the second time, as Singapore's Permanent Representative to the UN. I was instructed to begin a dialogue with Ambassador Huang on our bilateral relations.

On Oct 7, 1974, I organised a dinner, hosted by our Foreign Minister, Mr S. Rajaratnam, in honour of the leader of the Chinese delegation to the UN General Assembly, Mr Qiao Guanhua, the Vice-Minister for Foreign Affairs.

The dinner was very successful and Minister Qiao invited Mr Rajaratnam to lead a goodwill delegation to China.


With the help of Ambassador Huang, I was able to organise the visit of Mr Rajaratnam to China, from March 13 to 22, 1975. The high point of the visit was a call on the Chinese Premier, Zhou Enlai.

In the following year, Ambassador Huang and I organised the first visit by then Prime Minister Lee to China.

The visit took place from May 10 to 24, 1976. The highlight of the visit was a call by Mr Lee on an ailing Chairman Mao.


Between 1976 and 2015, Mr Lee visited China over 30 times. He spent time in cultivating five generations of China's leaders.

He helped Mr Deng in his revolutionary policy of economic reform and the opening of the Chinese economy to the world by encouraging Singapore's public and private sectors to invest in China.

He personally took charge of the Suzhou Industrial Park project.

He was willing to act as an interlocutor between China and the United States and between the mainland and Taiwan. As a result, China regarded Mr Lee as an old friend and held him in high esteem.

My message to China is that, although Mr Lee is no longer with us, his friendship and goodwill for China are shared by his successors, Mr Goh Chok Tong and Mr Lee Hsien Loong.


Although our relations with China grew steadily after 1976, we did not want to establish formal diplomatic relations until after Indonesia had normalised its relations with China.

In August 1990, I was appointed the leader of the Singapore delegation to negotiate an agreement with China for the establishment of diplomatic relations between us.

After three rounds of negotiations, the two sides agreed on the text of a memorandum of understanding (MOU) to establish formal diplomatic relations on the evening of Sept 18 on the premises of a state guest house called Diaoyutai.

The MOU was signed by Chinese Foreign Minister Qian Qichen and Singapore Foreign Minister Wong Kan Seng at the UN on Oct 3, 1990.

The Chinese chief negotiator, Minister Xu Dunxin, and I had a happy reunion at dinner in Beijing last month.


The past 25 years have been a remarkable period for China, for Singapore and for our bilateral relations.

No one could have foreseen 25 years ago that China would become Singapore's largest trading partner or that Singapore would become China's largest foreign investor. No one could have foreseen that the two governments would have implemented two iconic projects in Suzhou and Tianjin and are about to embark on a third project in western China.

No one could have foreseen that the two countries would have concluded a free trade agreement which would soon be upgraded to a higher level of ambition.

The current relationship between China and Singapore is warm, comprehensive and substantive and rests on a firm foundation of mutual trust. I am confident that President Xi and his Singapore counterparts will agree to raise our relationship to an even higher peak.


In 2005, I was appointed to represent Singapore in the Asean-China Eminent Persons Group. The group was co-chaired by Tun Musa Hitam, a former Malaysian deputy prime minister, and Mr Qian (China).

I believe in the importance of the Asean-China relationship, both economically and politically. I am happy that Singapore is the country coordinator for Asean-China Dialogue Relations for the next three years.

China can have confidence that Singapore will do its utmost to unite the Asean side and will keep the relationship on a positive trajectory.

However, in order to achieve this objective, China will have to play its part in growing our positive agenda and in managing our differences, with wisdom and self-restraint.

The writer is ambassador-at-large at Singapore's Ministry of Foreign Affairs

A Sino-Singapore partnership with multilateral impact
The new level of cooperation could influence regional and global dynamics, and ultimately Singapore's own long-term fortunes
By Kor Kian Beng, China Bureau Chief, The Straits Times, 13 Nov 2015

BEIJING • For many, the highlights of Chinese President Xi Jinping's recent state visit to Singapore were the bilateral outcomes such as the upgrade of a bilateral free trade agreement and a new government- led project in western China.

But the most crucial outcome of the Chinese leader's visit last week is the new partnership established between the two countries that is aimed at charting the future of the Singapore-China relationship and cooperation. This could in turn determine China's larger economic and strategic direction.

In a nutshell, the "All-Round Cooperative Partnership Progressing with the Times" - as the two sides call it - marks China's desire for Singapore to help catalyse its domestic development especially in the inland regions, hasten its integration with external economies and reshape its often-troubled relations with neighbours.

All these efforts, if successful, could have a knock-on impact on regional and global dynamics, and ultimately Singapore's long-term fortunes, which could make the Republic's decision to enter the partnership a far-sighted move.


The new partnership, first reported by The Straits Times last Friday ahead of its unveiling by President Tony Tan Keng Yam and Mr Xi at a state banquet, is aimed at consolidating the foundations of the Singapore-China relationship. Both countries mark 25 years of their ties this year.

Both sides pledged in a joint statement to strengthen the high level of mutual understanding and trust built since the 1970s through friendly exchanges by the pioneer generation of leaders.

Singapore's founding Prime Minister Lee Kuan Yew visited China in 1976 and Chinese leader Deng Xiaoping visited the Republic in 1978.

The joint statement shows China's desire to work with Singapore, outlining as many as 19 initiatives and pledges to deepen cooperation in wide-ranging areas such as finance, transport and infocommunications, social governance, leadership and official training.

East Asian Institute (EAI) assistant director Lye Liang Fook said the scope of cooperation is significant, in the light of China's size and how it has closed the gap on Singapore after over 30 years of economic growth and transformation. "It shows Singapore has continued to move ahead in many areas that China continues to find relevance in," he told The Straits Times.

The key initiatives include the upgrade of the China-Singapore Free Trade Agreement (CSFTA), which took effect in 2009. Talks on the upgrade are expected to end by next year.

Another is the "China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity", which is the third government-to-government (G-to-G) project after the 1994 Suzhou Industrial Park (SIP) and the 2008 Tianjin Eco-city (TEC).

The latest project's theme is modern connectivity and modern services and will focus on four priority areas of collaboration, namely financial services; aviation; transport and logistics; and information and communications technology.

For Singapore, the CSFTA upgrade will provide its businesses with more access to China's growing services sector and better investment protection while the third G-to-G project will allow Singapore companies to share

their expertise in those priority areas and to expand their presence in China.

For China, Singapore's decision to invest in Chongqing will help attract more foreign investors to the western region. This will help narrow the gap between the inland and coastal regions and mitigate against social instability on the mainland.

An unstable China is not good for the region as domestic instability is often viewed as a precursor to a more assertive foreign and military policy.

The new project could also serve as a pilot for policy innovation to deepen China's economic reforms.


The key bilateral initiatives also carry a multilateral dimension, based on remarks from leaders and officials of both sides.

President Tan said at the state banquet last Friday that the CSFTA upgrade would serve as a pathfinder for both countries' participation in regional economic frameworks such as the Regional Comprehensive Economic Partnership - comprising the 10-member Asean and its six dialogue partners, including China - and the Asean-China FTA upgrade.

Observers also believe the CSFTA upgrade is likely to incorporate elements from the United States-led Trans-Pacific Partnership (TPP), of which Singapore is a part but not China. It will hopefully bring China closer to the standards of the TPP. China is often said to be unable to meet the requirements of the TPP, envisaged to be a high-standards FTA for the 21st century.

Similarly, the new project could help fuel the global economy - if it manages to boost China's patchy efforts to develop its western region and to grow its external wing.

Beijing is also seeking out new, bigger markets for its enterprises, an exposure which would shake up the inefficient state-owned firms among them.

The inland region comprising the western provinces and the municipality of Chongqing is counted on to drive domestic consumption, which is a key plank of a new economic model that China is trying to build. The world's No. 2 economy is embarking on an economic transformation from an export-led, labour-intensive model into one driven by innovation and consumption.

Beijing has made the new Singapore-China venture a priority demonstration project under its regional strategies, on par with projects such as the Western Region Development and Yangzi River Economic Belt plans.

The new Chongqing project is also seen as pivotal to Mr Xi's "One Belt, One Road" initiatives to boost trade and investment along the overland Silk Road Economic Belt and the 21st Century Maritime Silk Road connecting China with South-east Asia, Africa and Europe.


The partnership also carries a pledge to strengthen communication and cooperation on regional and global issues - a move that could alter the dynamics between China and Asean, and the big power rivalry in the region between Beijing and Washington.

It could help Singapore do a good job as the coordinating country of Asean-China relations for the next three years from August this year, especially in improving trust amid the South China Sea territorial disputes.

It could also lead to better support in the region for China-led initiatives that could benefit the region, like the Asian Infrastructure Investment Bank. Singapore had helped rally other Asean states into supporting the China-Asean FTA.

A more conciliatory relationship between China and Asean could affect the strategic rivalry for influence in the region between Beijing, Washington and even Tokyo.

The Sino-Singapore partnership also provides a clue to how China plans to engage the region: focusing on cooperation and avoiding conflict. Mr Xi pledged at a Singapore lecture that China wants to build "a new vista of all-round cooperation" with Asean.

Mr Xi's willingness to attend the Apec summit to be held in Manila next week, after months of speculation he might snub the host for its President's remarks comparing Beijing to Nazi Germany, is seen as proof of this intent.


The plethora of benefits explains why Singapore agreed to enter into the new partnership.

Partly as a result of this decision, Singapore has had to reverse a pledge by its leaders in 2010 that the Republic would not undertake more government-led projects with China but stick to a new model of private sector-led, government-backed projects.

Now, with Mr Xi also having inked a government-led project with Singapore as did his predecessors Jiang Zemin and Hu Jintao through the SIP and the TEC respectively, Singapore will need to manage the expectations of incoming Chinese leaders, said Mr Lye.

"It will have to depend on the circumstances and strategic calculations at that point in time," he said, adding that Singapore needs to strike a balance between agreeing to new projects and overstretching its resources.

Singapore also has to maintain its continued success as a nation and the value of the Singapore brand, and, in particular, an independent foreign policy underpinned by its own national interests above all else.

Associate Professor Li Mingjiang of the S. Rajaratnam School of International Studies believes the partnership might have come about due to its growing assessment that the relationship with Singapore should be more comprehensive and cover the short planks in areas such as strategic, military, security and regional policy consultations.

One might even argue that if China wants to use the Global Comprehensive Strategic Partnership, agreed on with Britain during Mr Xi's visit there last month, as a model for its relations with major Western powers, the Sino-Singapore partnership could become the model for China's relations with smaller, neighbouring states.

But, by agreeing to strengthen cooperation with China, Singapore may come under pressure from Beijing to act according to the latter's expectations, he added.

Also, China's growing confidence under Mr Xi in handling foreign relations and dealing with controversial issues means China is more prepared to engage in strategic rivalry and competition with major powers, unlike in the past when it was willing to keep quiet or even make concessions, said Prof Li.

"It is a challenge for Singapore in continuing with its policy of balance of powers," he added.

So, for this partnership to succeed, China also needs to show it is serious about working with small states like Singapore based on mutual respect and benefit, and that it is sincere in fostering a cooperative environment in the region.

Amid concerns arising from Chinese construction of facilities on reclaimed land in disputed waters, Mr Xi's pledge in the Singapore lecture that freedom of navigation and overflight in the South China Sea will never be a problem is an important statement of intent that can hopefully stand the test of times - and nerves - for all sides.

China knows that a stable neighbourhood is vital to its economic and social development as well as its long-term aspirations to play a bigger global role. Asean knows that a prosperous China is beneficial to the region's stability and growth.

One hopes the new partnership between China and Singapore could help all parties to achieve their respective goals.

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