Speaking Of China

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

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.

BILATERAL BENEFITS

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.


ST ILLUSTRATION: MIEL

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.

MULTILATERAL BENEFITS

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.

REGIONAL DYNAMICS

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.

CHALLENGES

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.

A version of this article appeared in the print edition of The Straits Times on November 13, 2015, with the headline 'A Sino-Singapore partnership with multilateral impact'. Print Edition | Subscribe