Singapore and Germany are working on an enhanced Defence Cooperation Agreement, and yesterday signed a Joint Statement on Cybersecurity Cooperation.

They are also embarking on new areas of cooperation - including research and development for Industry 4.0, fintech and sports, Prime Minister Lee Hsien Loong said after meeting Chancellor Angela Merkel.

PM Lee said he is very happy that both countries have strengthened their cooperation since his last visit in 2015, for their 50th anniversary of diplomatic relations.

The close partnership is underpinned by broad and deep collaboration, he said. "Most importantly, we are both like-minded on many issues with a shared strategic outlook. We are both strongly committed to an open international trading system, the rule of law and sustainable development."

Speaking before him, Dr Merkel said both sides agree on the need to strengthen multilateral ties, and keep trade flows open.

"As far as our bilateral ties are concerned, it is fair to say they are very close, very friendly indeed. We have been pursuing an open dialogue on foreign policy and security issues, we have excellent economic and trade ties, and we have a very intensive research cooperation," the Chancellor said in German.

Both leaders exchanged views on regional and global developments, and instructed their ministers to conduct a comprehensive review of the bilateral partnership, identify new opportunities for cooperation and report back to the leaders.

Singapore's Cyber Security Agency and Germany's Federal Foreign Office also signed a joint declaration of intent on cyber security cooperation. They will have regular information exchanges, joint training and research, and share best practices to promote innovation.

PM Lee said Singapore is grateful to Germany for letting the Singapore Armed Forces train in the country, and looks forward to stepping up close defence cooperation in many areas of mutual interest.

On trade, Singapore greatly appreciates Germany's support for the European Union-Singapore Free Trade Agreement (EUSFTA), and both leaders hoped it will go into force soon. "It will bring significant benefits to Singapore, to Germany and in fact the whole of the EU, and signal clearly our support for international trade," said PM Lee, adding that it will be "a pathfinder" for an EU-Asean FTA, and help draw the two regions even closer together.

The EUSFTA hit a roadblock in May when the European Court of Justice ruled it had to be ratified by the EU's 38 national and regional authorities to go into force. The path is now clear for that process to be completed, PM Lee said.

He noted that Singapore and Germany also have strong ties in trade and investment - Germany is the Republic's largest trading partner in the EU, while Singapore is Germany's largest trading partner in Asean. Foreign direct investment from Germany was about $18.4 billion at the end of 2015.

Singapore companies are making inroads into the aerospace and hospitality sectors in Germany, and there are more than 1,600 German companies based in Singapore.

Major German corporations and Mittelstand - small and medium- sized enterprises - are using Singapore as an innovation hub for the advanced manufacturing and digitalisation sectors, PM Lee noted.

He will launch electronics giant Siemens' Singapore Digitalisation Hub from Munich next week. The hub, the first of its kind globally, will undertake research and development into digitalisation and the Internet of Things.

In welcoming PM Lee, Dr Merkel said: "I will never forget that you happened to be my first official visitor and guest when I took office."

PM Lee said he is visiting again to "take our relationship another step forward". "The Chancellor is a good friend, and I greatly value her advice, and her friendship and her insights," he said, before being hosted to lunch by Dr Merkel.

PM Lee also invited Dr Merkel to visit Singapore, and she agreed to reciprocate his visit.