Singapore needs to build on its already strong trading links to ensure that it remains an attractive trans-shipment point for global business, said Senior Minister of State for Trade and Industry Chee Hong Tat.
He noted yesterday that it is cheaper and more efficient to move goods to a trading hub like Singapore for further distribution, rather than deliver them directly from A to B.
But if Singapore wants to continue in such a role, it must build stronger links with China and Asean.
While many Chinese companies use Singapore as a launch pad to venture into South-east Asia, this relationship is "not automatic" and Singapore has to maintain its relevance, he said.
Mr Chee told a forum at River Valley High School: "Talent is at the heart of our competitiveness."
Chinese companies are expanding internationally, presenting significant opportunities for Singapore and its businesses, he added, noting that while China is highly centralised in planning and policy, its different regions have varying industry focuses and developmental priorities.
Mr Chee cited the rapid industrialisation of its less developed western region as businesses shift inland to capitalise on lower labour costs.
As we engage China as a country, we also need to be plugged in ... at the local level.
SENIOR MINISTER OF STATE FOR TRADE AND INDUSTRY CHEE HONG TAT, on the varying priorities of China's diverse regions.
"As we engage China as a country, we also need to be plugged in... at the local level," he said.
China has been Asean's largest trading partner for eight consecutive years, and its investment in the region rose nearly 40 per cent in 2017 compared with 2016, added Mr Chee.
These developments suggest Asean can do more as well.
He said Asean needs to keep driving economic integration and removing market barriers while boosting ties with China through the Regional Comprehensive Economic Partnership. Asean must also maintain its relevance to its network of global partners.
Singapore, for its part, needs to deepen its understanding of its Asean neighbours in order to capitalise on the region's potential.
Already Singapore is working with China on a New International Land-Sea Trade Corridor, which will be a shorter link between western China and South-east Asia, said Mr Chee at the forum entitled Asean and China: Cooperation or Competition?, organised by the non-profit Business China group and River Valley High School.
Fellow speaker, Associate Professor Gu Qingyang of the Lee Kuan Yew School of Public Policy, said the new trade corridor is where Singapore can play a unique role, adding that the country's advantage is in its global trading networks despite a small domestic market.
Dr Tang Siew Mun, head of the Asean Studies Centre at the ISEAS - Yusof Ishak Institute, told the forum that a recent survey by the centre found that even as the region views China as having much economic, political and strategic influence, few trust it and many have reservations over how it will use its power.
A student at a question-and-answer session asked if Asean countries are taking sides between China and the United States, prompting Dr Tang to note that cooperation remains strong and that there is no anti-Sino sentiment at the regional level.
He added that he also identified stress points in both parties' relationship. These include China's approach to international law, the impact of its expanding influence on Asean's diplomatic space and autonomy, and its use of economic instruments for political-strategic objectives.