BEIJING, April 2 — Bilateral ties between Singapore and China have gone up a level, which could create more opportunities for Singapore businesses as well as for their Chinese counterparts to do business in Singapore too, said Prime Minister Lee Hsien Loong today.
“The Chinese do see the black clouds which all of us see,” Mr Lee said to Singapore media in Beijing at the end of his first official trip to China in four years.
“They see of course from the Chinese perspective, what problems it causes them and what the dangers are to them,” he said, without stating what he meant by dangers.
Mr Lee said despite this, China still wants friends and would particularly like to have stability and cooperation with the other Asian countries, including Singapore.
Given the black clouds China face, Mr Lee said this is an environment for Singapore to work on its relationship with China and go into “new areas”.
“(These are) all areas where there is potential for growth and also the need for us to maintain linkages, at the time when international linkages cannot be taken for granted,” he said further, giving examples of opportunities in digital, green economy, financial markets, and food security.
During his six-days in China, Mr Lee visited Guangzhou city, delivered a speech at the Boao Forum Asia in Hainan Island, and met Chinese President Xi Jinping and other high profile members of the Chinese leadership.
Yesterday morning, Mr Lee was welcomed by Chinese Premier Li Qiang at the Great Hall of the People in Beijing.
There, the two leaders witnessed the signing of seven memorandums of understanding to further cooperation on a range of issues, such as food security, technological research and environmental conservation.
Both leaders also announced an “upgrade” in bilateral relations between Singapore and China with a new “All-Round High-Quality Future-Oriented” partnership.
“The new government of China would like to work with Singapore to...bring our bilateral relations and cooperation to a new level, so that together we can bring more benefits to our peoples and contribute to...(the) peace and stability, development and prosperity in the region and beyond,” said Premier Li in Mandarin.
Ministry of Foreign Affairs said on Saturday that Premier Li updated Mr Lee on his priorities for China.
This included “continuing with China’s reform and opening-up and ensuring high-quality development”.
Mr Lee also expressed in-principal support for China’s interest in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and welcomed China’s application to the Digital Economy Partnership Agreement.
‘Win-Win for Both Sides’
Speaking to the media at the China World Summit Wing Hotel after his meeting with Premier Li, Mr Lee said that with the upgrade in relations between Singapore and China, both countries are going to “take the next step forward”.
When asked why there was a need for Singapore to elevate relationships with China, and what it would mean for citizens of both countries, Mr Lee said that because the world and the economy moves, so too do interests.
“When (you) have good relations (with another country), you have to keep on working at it. It doesn’t just automatically stay fine. You have to keep on making it better and better,” said Mr Lee. “We are never satisfied.”
He cited how Singapore and China have previously “worked very hard” to make some collaborations, in areas such as financial services, happen.
“And that has meant that we’ve got more financial businesses, more financial activities, more people investing in Singapore, making use of our banks and (financial institutions),” he said.
Now that Singapore has that, he said the country is considering how it too can use the e-CNY, also known as the digital Chinese yuan, which Mr Lee said the Chinese have been experimenting with.
He also spoke about the possibility of the Chinese developing their bond markets, and whether there could be a “link-up” between the Singapore Exchange and the Shenzhen Stock Exchange that will allow people to trade in the Chinese market from Singapore.
“It’s not just the trading which grows, but when the trading grows, more firms will...come to Singapore, make use of Singapore and the facilities we offer. I think that’s a win-win for both sides.”
Beyond the financial services sector, Mr Lee said there are other areas that Singapore is looking to collaborate with China in, such as the digital and green economies, sustainability and food security, among others.
Restoring Post-Covid Civilian Flights
He said Singapore is in the process of restoring both civil aviation services and connectivity back to where they were pre-Covid.
China, noted Mr Lee, “is not quite there yet” as it has yet to reach 40 per cent of its pre-Covid levels in these two areas.
“In the process of getting there, we are talking to the Chinese to encourage them to move faster, so that we will be able to get more people to flow,” said Mr Lee.
Mr Lee added that part of the problem is due to a lack of flights, though there are other factors at play such as visa requirements for tourists on the mainland, which China has yet to fully lift.
“I mentioned this with the Premier. Premier (Li) says he will look at it. I think the Chinese people will want to travel too and we’re looking forward to seeing them at Marina Bay and the Merlion is looking forward to taking pictures with them,” he said.
China and the World
As for the tensions between the United States and China, Mr Lee said that the increasingly frosty relations with both superpowers is “very worrying”.
And while both the US and China may not end up at war, the consequences of such sour relations “will be very regrettable”.
“The American government, they say they do not want the decoupling of the economies. But...the trends presently mean that the trade is going to be much less unfettered than it used to be,” he said.
And if that trend continues, Mr Lee said it would mean less trade, investments and economic opportunities.
He then referenced a speech made by International Monetary Fund managing director Kristalina Georgieva at the Boao forum, in which Ms Georgieva said the long-term cost of trade fragmentation could reach up to 7 per cent of global gross domestic product (GDP).
But beyond the impact on trade and investment, Mr Lee said there is also an impact on innovation, technology and creativity.
Said Mr Lee: “So the cost is very high.”
However, he also pointed out that trade between China and the US last year hit a record high of US$700 billion (RM3 trillion), despite their differences.
“There will still be the need to do business and to interact with one another. But it will be much less flat, even-playing field with no unnecessary obstacles,” he said.
When asked if there is any concern about the increasing attention from China and the US in the Association of Southeast Asian Nations (Asean) region, Mr Lee responded that it depends on one’s perspective.
“I think it is very nice to have people pay attention to us. But, of course, we would like the tensions and difficulties between them not to get referred into the relationship with us,” he said.
Instead, both China and the US should take their relations with Asean countries on its own merits.
“We find value in them (US and China), they find value in talking to us, just because we are productive, we have something to add...Not just because they want us on their side, and not on the other side.”
Significance of Partnership
Dr Benjamin Ho, an assistant professor for the China Programme at the S Rajaratnam School of International Studies, said the partnership signifies both countries’ “ongoing commitment and willingness to build win-win bilateral relationship” with one another.
Unlike the strategic partnerships that Singapore has with countries like the US and Australia, Dr Ho said the latest partnership is “different” in that they do not involve security or defense arrangements.
Noting that China is Singapore’s biggest export market, Dr Ho said: “We certainly need China’s doors to be opened to ensure our ongoing economic well-being and vibrancy.”
As to whether the partnership might be viewed negatively by others given today’s geopolitical climate, Dr Ho said it is typical for countries to build relationships with one another based on their own calculated national interests, which other countries may not always agree with.
“In any case, so long as our interactions with China do not compromise other areas of cooperation that we have with Western countries, I think Singapore should have the right to decide what is best for ourselves,” he said. — TODAY
