Outlook for Asia bright despite worst recession in a century: DPM Heng Swee Keat

Beijing's central business district. China is the second-largest economy in the world.
Beijing's central business district. China is the second-largest economy in the world.PHOTO: AFP

SINGAPORE - The global economy may be going through its worst recession in a century, but Asia is well positioned to contribute to global growth, said Deputy Prime Minister Heng Swee Keat on Tuesday (Sept 15).

Noting that China is the second-largest economy in the world, and the 10 Asean economies grew at around 5 per cent last year, Mr Heng said the outlook for Asia remains bright.

Its economic fundamentals are strong, too, having undertaken reforms after the Asian and global financial crises, he added.

"Many Asian economies have a large and growing middle-class, providing a strong base for production and consumption. Asia is home to a vibrant start-up ecosystem and to many innovative companies."

He further said that all countries and businesses will have to make adjustments in a post-Covid-19 world, which is likely to place a bigger premium on supply chain resilience, digitalisation and innovation, as well as new areas of growth.

Mr Heng, who is also the Finance Minister, was giving a keynote address at the FutureChina Global Forum, whose theme is A Resilient Future: Post-Pandemic Transformation And Opportunities In China And Asean.

The annual forum, now into its 11th year, brings together government and business leaders as well as leading thinkers on a wide range of China-related issues.

It runs from Tuesday to Thursday, and is held virtually this year owing to Covid-19.

Mr Heng said there are three things countries can do to contribute to the region's growth and build a more resilient future.

First, they need to stay open and connected to the world, while reforming their economies so that globalisation works for all.

In this regard, Singapore is reviewing its work pass policies, strengthening fair consideration, upskilling workers and strengthening social safety nets for those affected by economic disruption, he said.


"But we must not undermine what has made us successful by closing ourselves off from the world... We must continue to signal our commitment to multilateralism, and to free and open trade."

China, too, he said, is continuing to reform its economy under a new economic model of "dual circulation" - defined as "taking the domestic market as the mainstay while letting internal and external markets boost each other".

Since it was first mentioned in May at a meeting of the Politburo - China's top decision-making body - Chinese President Xi Jinping has repeatedly talked about a new economic development strategy that relies less on global integration and more on expanding domestic commerce.

Mr Heng said that while China's reliance on its domestic market will grow, "international circulation" will not diminish in importance, and the two types of circulation must reinforce each other.

Second, Singapore has to strengthen its connectivity with the region and the world.

It is facilitating the movement of goods, data and people in various ways, from working with like-minded partners to keep trade lines and supply chains open to smart cities initiatives with Asean and China as well as opening its borders for essential business and official travel with China, Malaysia, Brunei, South Korea and Japan, he added.


Third, Singapore must build partnerships among businesses.

Examples he cited include: the Emerging Stronger Taskforce, to find new bright spots in Singapore and the region; industry-led Alliances for Action, to prototype new solutions quickly in areas such as smart commerce and sustainability; and cross-border collaborations in areas like infrastructure.

To ensure their activities benefit the wider society, businesses must work with a wide range of stakeholders, including workers and local communities, the DPM added.

"In this way, we make economic growth inclusive and sustainable."

He also noted that while this year marks 30 years of Singapore-China diplomatic relations and next year, 30 years of Asean-China dialogue, the ties go back more than a thousand years when a vibrant trading network already existed between China, South-east Asia and the world.

"This trading network and the bonds of our people have been resilient, ebbing and flowing over the last 10 centuries."

Mr Heng said he received Mr Yang Jiechi, a Politburo member and head of the Chinese Communist Party's foreign affairs office last month when he visited Singapore: "He was my first foreign visitor since the Covid-19 outbreak."


He added that he looks forward to hosting Chinese Vice-Premier Han Zheng in Singapore later this year when they co-chair the 16th Joint Council for Bilateral Cooperation.

The DPM stressed that while Covid-19 has added to the stresses and anxieties of globalisation, Singapore must stay open and connected to Asia and the world.

"(We must) believe in our ability to adapt, evolve our approaches, and forge new partnerships with one another.

"Only then, can we contribute to and benefit from Asia's growth."