Wednesday, 4 November 2015

Singapore's bid to sustain its unique ties with China

It must keep adapting and tap its soft power in public administration and governance
By John Wong, Published The Straits Times, 3 Nov 2015

As Singapore is part and parcel of South-east Asia, its relations with China have inevitably been influenced by China's changing relations with the region. Historically, China's overall relations with the region, traditionally called Nanyang (South Sea), have been extensive and deep-rooted on account of geography and migration.

Chinese historians can trace China's early relations with the region back to the Tang Dynasty (6th-10th centuries). China had operated maritime activities along its coast and in Nanyang well before Admiral Zheng He's expeditions (1405-1433). Such may well be the origins of today's Maritime Silk Road. Its burgeoning ties with Nanyang were subsequently boosted by successive waves of migration, particularly in the 19th century.

Following the establishment of the People's Republic of China in 1949, the relationship assumed new dimensions, with complex political and ideological factors coming into play. This gave rise to more than two decades of Cold War relations between the two sides.

Of the 10 South-east Asian nations which today constitute ASEAN, Indonesia was the first country to establish formal diplomatic relations with the People's Republic of China but these were disrupted after the 1964 coup. It was soon followed by Burma (Myanmar).

Brunei, Malaysia and Singapore were then still British colonies, while the three Indochinese states of Vietnam, Cambodia and Laos were under French rule. The Philippines and Thailand, both independent nations, were members of the American-led anti-communist South-east Asian Treaty Organisation (SEATO). The Cold War thus froze most of the normal contacts and exchange between China and the region.

Following US President Richard Nixon's visit to China in 1972, international detente finally spread to the region, thereby removing the Cold War obstacles to their conduct of normal relations. Individual South-east Asian states soon started to chart their own course of normalising ties with China. The "ping-pong diplomacy" also played a positive role in the initial phase, as China, then, often sent its table-tennis teams to individual ASEAN states as a vanguard to thaw relations.

In May 1974, Malaysia, under Prime Minister Abdul Razak, became the first ASEAN state to normalise diplomatic relations with China. A year later, President Ferdinand Marcos of the Philippines and Prime Minister Kukrit Pramoj of Thailand separately also made their historical journeys to Beijing to formalise their diplomatic relations.


Singapore soon had de facto ties with China, following their exchange of trade representatives in 1981. Subsequently, Singapore declared that it would be the last ASEAN country to establish full diplomatic relations with China, in deference to Indonesia's diplomatic suspension.

However, Singapore's "half-relations" with China had actually not hampered the normal progress of economic links. Their two-way trade grew rapidly, in part because of China's economic reform and open-door policy. Politically, their relationship also picked up very fast, especially after then Prime Minister Lee Kuan Yew's first official visit to China in 1976. Mr Lee was the second last foreign dignitary who was given an audience to meet with ailing Chairman Mao Zedong. A few months earlier, Singapore's then Foreign Minister S. Rajaratnam, in Beijing to pave the way for Mr Lee's visit, also had a short audience with then Premier Zhou Enlai on his sick bed.

What was even more remarkable was that Singapore was the only country in the region whose trade and business with China had never been disrupted, not even at the height of the Cold War. For many years, bilateral trade was carried out in the absence of a formal diplomatic framework. This clearly attests to the pragmatic attitude that prevailed on both sides from the very start and endures to this day.


Singapore-China relations grew by leaps and bounds after Mr Deng Xiaoping's economic reform in 1978. Singapore, as a multiracial society and an industrialised city-state, stood to enjoy certain political and economical advantages that were not available to its neighbours.

To start with, several ASEAN states had many built-in discriminatory policies against their ethnic Chinese minorities, which often caused Beijing missions a lot of "political headaches" in dealing with local Chinese. A case in point is the recent incident of the Chinese ambassador to Malaysia raising the highly sensitive issue of racial discrimination against local Chinese.

By comparison, Beijing's diplomatic mission and Chinese officials have all along been socially and culturally much more comfortable in Singapore. They can easily deal with any racial group, and Chinese state concerns can do business freely with anybody and any corporation.

Of far greater importance is the fact that the Singapore economy is highly complementary with China's on many fronts, from manufacturing to services. Singapore as a city-state can easily do business with any city in China or any sector of the Chinese economy.

In contrast, China's overall economic relationship with most ASEAN economies has had both complementary and competitive aspects, especially in the early phases of China's economic reform. While China had great import demand for the region's primary commodities and natural resource products, its exports of labour-intensive products tended to compete head-on with similar goods from ASEAN, not just in their home markets but in third-country markets. More seriously, the opening up of China had diverted much foreign direct investment from South-east Asia to China.

Beyond these economic fundamentals, Singapore's unique and special relationship with China, from the very start, owed a great deal to the foresight and determination of their political leadership, especially the two political giants of the times: Singapore's founding father Lee Kuan Yew and China's architect of economic modernisation Deng Xiaoping.

Mr Lee and Mr Deng had established strong rapport since Mr Deng's first state visit to Singapore in 1978. They shared the same chemistry for being pragmatic and straightforward. Mr Deng's famous adage: "It does not matter if the cat is white or black, it is a good cat so long as it can catch mice" would no doubt be shared by Mr Lee. Hence their mutual respect for each other and also their strong common bonds.

Mr Lee had made no bones about his admiration for Mr Deng, having described Mr Deng as "a giant among world leaders" and "the most impressive leader I have met". Mr Deng had also shown his trust and admiration for the Singapore system and its leadership. In his Nanxun (Southern Tour) speech during the most critical phase of China's economic reform, Mr Deng singled out Singapore as a model for China's economic and social development, saying: "We must learn from Singapore." This immediately sparked off a great leap forward in China's all-round relations with Singapore.

Since then, almost 50,000 Chinese officials at different levels have been sent to Singapore for training or for observation field trips. China would not trust any other country to train so many of its officials.

Even more unusual was the setting up of the two large government-to-government development projects: the Singapore-Suzhou Industrial Park and the Tianjin Eco-City; a third one in western China is expected to be announced soon. This has been unprecedented for China as it has never partnered any other country for such large-scale industrial projects on Chinese territories.

Not surprisingly, trade and investment between the two countries have since boomed. In recent years, Singapore has become China's largest investor (not counting Hong Kong and Taiwan), with a cumulative total of US$72 billion (S$101 billion).

Singapore and China have already signed a free-trade agreement. Last year, China overtook Malaysia as Singapore's leading trade partner. In finance, Singapore has become the second largest offshore market for the renminbi after Hong Kong. For tourism, China is Singapore's second largest source of tourist arrivals. Even more amazing, for a country with a total population of only 5.6 million, Singapore sent one million tourists to China last year.


Singapore-China relations over the past 25 years having grown rapidly to become so substantive and so broad-based, the hard part is clearly how to keep them so. There are new obstacles and uncertainties.

From the start, the match between a small city-state of 5.6 million people and a continental power of 1.3 billion was already an asymmetrical one. In 1990, China's GDP was only 10 times larger than Singapore's. Today, it is more than 30 times larger. The future will clearly be even more asymmetrical as China's relentless growth is compounded by speed and scale.

In the early days, Singapore could be a catalyst for China's trade relations with the region as Singapore was a convenient base for China's regional operations. Today, China has developed its own linkages and conduits across many continents. In fact, China is already operating regionally and globally in pursuit of its "big-power" game. It would be unwise for small countries to stand in China's way and far better for them to capture some benefits from China's overseas expansion such as the One Belt, One Road projects.

How will Singapore position itself to meet a rising China in future? Admittedly, this is a big challenge post-Lee Kuan Yew for Mr Lee was highly respected in Beijing, and Chinese leaders would eagerly seek wise counsel from him on regional and global affairs. Unfortunately, there is no comparable successor to fill his shoes. That means the loss of an experienced and steady hand to guide future endeavours in China.

Accordingly, Singapore needs to adjust its strategies and tailor its aspirations for its China ventures. To be sure, Singapore still has a lot of soft power and comparative advantage pertaining to its public administration, social governance, legal experiences as well as certain technological niches that can meet China's demand, especially at the local and provincial levels. So long as Singapore continues to adapt, it should stay relevant to a rising China.

The writer is a professorial fellow at the East Asian Institute, National University of Singapore.

Xi Jinping’s Singapore visit to cement another 25 ‘glorious years of cooperation’
By Albert Wai, TODAY, 3 Nov 2015

President Xi Jinping’s first state visit here later this week will provide a platform for Singapore and China to look at how to boost bilateral ties and chart the way forward for another 25 “glorious years” of cooperation, said Chinese Ambassador Chen Xiaodong today (Nov 3).

“Both sides have agreed that it is now the time to look at how to reposition the relationship, give it new meaning and to reflect how the relationship is comprehensive and has moved with the times,” said Mr Chen in Mandarin at a press conference at the Chinese Embassy, ahead of the state visit from Friday to Saturday.

Agreements on the start of a third Government-to-Government (G-to-G) project in Western China and the upgrade of a bilateral free trade agreement are expected to be signed during the visit to “demonstrate the latest successes and areas of convergences” between the countries, said Mr Chen, who noted that this would be the first state visit here following the swearing in of the new Cabinet last month.

The envoy added that President Xi will be visiting Singapore at a “historic moment” to commemorate the 25th anniversary of bilateral relations and SG50, and that Mr Xi will be meeting “old friends”, including President Tony Tan Keng Yam and Prime Minister Lee Hsien Loong.

Singapore-China relations are deep and broad-based. China is Singapore’s largest trading partner, while Singapore is the largest investor in China.

Both countries have have been in discussions on upgrading the Singapore-China Free Trade Agreement signed in 2008.

“As the global economic climate and the economic conditions in Singapore and China change, the free trade agreement should also be upgraded. This will enhance bilateral economic cooperation,” said Mr Chen.

The third G-to-G project was proposed by China in 2013, after the Suzhou Industrial Park set up in 1994, and the Tianjin Eco-City in 2008.

Three cities — Chongqing, Chengdu and Xi’an — have been shortlisted for the new project, which would focus on “modern connectivity and the service economy”.

Prime Minister Lee had earlier expressed hope that the decision on the final location will be reached this year.

TODAY understands that an agreement that sets the framework for the new project will be signed during Mr Xi’s visit, but it is unclear if the final choice of the city will be announced.

Mr Chen said that the project would have a positive effect on Mr Xi’s ambitious “One Belt, One Road” initiative to drive China’s future economic growth. With the plan’s scope stretching from Hungary to Indonesia, Beijing estimates that the initiative will add another US$2.5 trillion (S$3.5 trillion) to China’s trade in the next decade. China has committed US$40 billion to its Silk Road Fund to finance infrastructure projects in the region.

Other agreements on educational exchanges, customs, finance and urban governance are also in the works during the state visit.

China and Singapore signed a slew of agreements last month to further strengthen economic and cultural ties after talks between Chinese Vice-Premier Zhang Gaoli and Deputy Prime Minister Teo Chee Hean. Key among the agreements signed was a Memorandum of Understanding (MOU) between the Suzhou Industrial Park Administrative Committee and International Enterprise (IE) Singapore to establish an Overseas Investment Services Platform to help Chinese companies internationalise.

The Chinese ambassador pointed out that the Singapore government “has paid great attention to the keenly anticipated state visit”, with several “meticulous and considerate arrangements” even though Mr Xi is in Singapore during a weekend.

Mr Xi will be hosted to a state banquet at the Istana by President Tan, who himself had visited China for a state visit in July. 

Mr Lee and his wife Madam Ho Ching will host a private lunch for Mr Xi and his wife Madam Peng Liyuan during the visit. A new orchid hybrid will be named after Mr Xi and Madam Peng.

As part of the itinerary, the Chinese President will also speak at a Singapore Lecture organised by ISEAS-Yusof Ishak Institute, where he is expected to touch on bilateral relations, Association of Southeast Asian Nations (ASEAN)-China cooperation and other regional issues including the situation in the South China Sea.

Mr Xi and Emeritus Senior Minister Goh Chok Tong will also officiate the opening of the China Cultural Centre. “This visit will inject new directions and momentum into bilateral relations and open up a new chapter for the relationship … It will underline Singapore-China cooperation and friendship. The people of China and Singapore, as well as people all over the world, will be able to witness the warmth of the relationship,” said Mr Chen.

“We will look at how to move towards another 25 glorious years of cooperation,” he added.

Chinese President Xi Jinping's visit 'may advance cooperation', says Singapore envoy
It also signals mutual desire to build on 25 years of diplomatic ties, says S'pore envoy
By Kor Kian Beng, China Bureau Chief In Beijing, The Straits Times, 3 Nov 2015

An upgrade of the China-Singapore Free Trade Agreement (CSFTA) and progress on a third government-led project are two potential outcomes from Chinese President Xi Jinping's state visit to Singapore starting on Friday, said Mr Stanley Loh, Singapore's Ambassador to China.

But besides progress in cooperation, the significance of President Xi's two-day trip, which is part of an exchange of presidential visits to mark 25 years of diplomatic relations, also lies in the political signalling by both sides, added Mr Loh.

He said China extended a warm welcome to President Tony Tan Keng Yam on his state visit to China at the end of June, and Singapore is keen to reciprocate with "an equally if not even warmer welcome" to the Chinese leader.

"Given the deep and broad relationship between the two countries, it is important for us to have high-level mutual understanding and communication so that it permeates all the way down," he said.

"It sends an important signal of our mutual desire to build on what we've achieved in 25 years and raise it to a higher level and set a direction of where we want to go for the next 25 years and beyond."

Mr Loh, who took up his post in March 2012, was speaking to The Straits Times in a recent interview about Mr Xi's visit, which also touched on developments in bilateral ties and cooperation, and the opportunities and challenges ahead.

Mr Xi's visit this week would be his seventh - he was vice-president when he visited Singapore in 2010 to mark 20 years of diplomatic ties - and is "quite a large number for a top Chinese leader", said Mr Loh.

On the FTA upgrade, he said it could reap benefits for not only both sides, but also the region.

He noted that the FTA has been "immensely successful", judging from trade and investment relations - China is now Singapore's largest trading partner and Singapore has been its largest investor since 2013.

The FTA has also served as "a test pilot" for China, which is negotiating more bilateral FTAs.

"So we want to make sure that our agreement keeps pace with other agreements," he said.

During Dr Tan's China visit, the two presidents agreed to "positively work" towards an FTA upgrade that is "substantive, mutually beneficial, and with a level of ambition befitting our special relationship".

Both sides have since launched a scoping study on the CSFTA, which took effect in January 2009 and was the first China signed with another Asian country. The launch of formal negotiations could be a likely outcome from Mr Xi's visit.

For Singapore, it would create more opportunities for its investors - through greater market access and investment protection, among others - and also more job opportunities for Singaporeans in China, said Mr Loh.

For China, an FTA upgrade, which will focus more on investments and services, would meet its desire to attract foreign investors in the service sector, he said.

"There's also a signalling effect to all other investors, and not just from Singapore, about China's commitment to reform and to upgrade its economy," he added.

Also, he said, China is still grappling with bigger, regional free trade arrangements despite gaining confidence since inking the CSFTA.

"So Singapore can once again be an interesting and useful test pilot for China and a stepping stone as it prepares for some of these arrangements in the future," said Mr Loh.

Some of the regional arrangements now in the pipeline include the China-Asean FTA and the Regional Comprehensive Economic Partnership, which involves the 10-member Asean group and its six dialogue partners, including China.

Regarding the third proposed government-led project, first broached by China in 2013 to help boost its less developed western region, Chongqing is likely to be announced as the site of the new venture, beating Chengdu and Xi'an.

Unlike the first two government- led projects, Suzhou Industrial Park and Tianjin Eco-City, which began in 1994 and 2008 respectively, the third one will not be confined to one city, given its theme of modern connectivity and modern services. It also has to fulfil three criteria: suit China's developmental needs, break new ground and be commercially viable.

Location is but one of several factors being weighed by both sides, said Mr Loh. Another is room for policy innovation that can spur development in the western region.

"In a way, it should also be used as a test pilot and demonstrative area, because if it's something that the private sector can do entirely on their own, then they should do it. So there must be ingredients for the government to get involved," he added.

#XiJinping's meeting with #Taiwan's leader Ma Ying-jeou in Singapore on Saturday is a "milestone" for cross-Strait...
Posted by China Xinhua News on Tuesday, November 3, 2015

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