In Singapore, China finds a trusted friend

"All great things start from the beginning," poet-philosopher Lao Tzu said.

Ever since Mr Lee Kuan Yew visited China nearly four decades ago for a meeting with Chairman Mao Zedong , the relationship between Singapore and China has been a unique one.

On the economic front, China was Singapore's top trading partner and export destination last year, with trade totalling $121.5 billion, up from $115.2 billion in 2013. Singapore was also China's largest foreign investor for the second consecutive year in 2014, with investments of US$5.8 billion (S$7.8 billion) in over 700 projects.

Issues of governance also rank highly on both countries' lists, with officials visiting one another regularly for insights and exchanges. Singapore President Tony Tan Keng Yam's recent state visit, hosted by President Xi Jinping to mark 25 years of diplomatic ties, is a testimony to ties at a personal level between the leaderships of the two countries.

Mr Lee, Dr Goh Keng Swee and other Singapore officials of their generation and after have left an intimate relationship built over four decades.

Singapore's President Tony Tan Keng Yam (right) and Chinese President Xi Jinping inspecting honour guards during a welcome ceremony outside the Great Hall of the People in Beijing on July 3.
Singapore's President Tony Tan Keng Yam (right) and Chinese President Xi Jinping inspecting honour guards during a welcome ceremony outside the Great Hall of the People in Beijing on July 3. PHOTO: REUTERS

However, since the 1980s, when the first special economic zones were built with Singapore's help, the dynamics have slowly changed: Singapore is no longer just the teacher and China the keen student. As students of management studies well know, being influenceable holds the key to influencing others.

Singapore has had to adapt to the changing circumstances and mould the relationship into one where both countries participate in an exchange of insights and best practices.

Maintaining goodwill with mutual respect should be a key consideration, along with fostering cooperation in existing and new initiatives. An example of a successful government-to-government project is the Sino-Singapore Tianjin Eco-city, started in 2007 to develop a sustainable model of urban living.

Maintaining the precarious positioning of Singapore on the global stage should be another priority. Singapore has been a trusted bridge between the West and East, and has maintained a neutral stance on global issues, from the South China Sea territorial disputes to the US desire to rebalance to Asia. Being a small nation state, Singapore has the virtue of remaining non-partisan in confrontations.

It also has to continue to find ways to add value to Asia and the world. Singapore is taking steps to increase worker productivity, spearheading thought leadership and leveraging on its networks to help citizens and neighbours reach their potential.

As a member of Asean, it can continue to play a key coordinator role between the Association of Southeast Asian Nations, mainland China and Hong Kong.

Given that mainland China and Hong Kong have been at the forefront of the global economy, it is in Singapore's interest to maintain a good relationship with both, working together to strengthen governance and add value to each other's economy through investments and trade. These exchanges can be effective only with respect and humility.

The Singapore Summit in September is one event that demonstrates Singapore's role in the global arena.

It provides a platform for leaders to discus economics and seek solutions to problems.

Fifty years ago, no one could have predicted that this small country with no natural resources would reach its current state. Nevertheless, we should not rest on our laurels nor shy away from sharing this unique experience with China. As one senior China Securities Regulatory Commission official told me last week: "Why should we waste time learning from the West blindly? We should just watch Singapore, which has digested these learnings in the past and has adapted them well to our unique Asian circumstances."

Indeed, being influenceable is the key to influencing others.

•The writer is an institutional investor and author of Asia Financial Statement Analysis: Detecting Financial Irregularities.

•This article first appeared in the South China Morning Post.

A version of this article appeared in the print edition of The Straits Times on July 13, 2015, with the headline 'In Singapore, China finds a trusted friend'. Print Edition | Subscribe