SINGAPORE - With the world in a flux, Asean and China would do well to stick to three time-tested principles to navigate global security and trade challenges and bolster cooperation, Deputy Prime Minister Teo Chee Hean said on Monday (Aug 27).
These involve committing to: an interconnected multilateral system; free and open trade; and a rules-based international order.
DPM Teo was speaking at the opening of the Future China Global Forum and Singapore Regional Business Forum at The Ritz-Carlton, Millenia Singapore. It is the first time these two flagship events, organised by Business China and Singapore Business Federation respectively, have come together.
“The world is now too interconnected for us to retreat into isolationism. We live in an increasingly multipolar world,” said Mr Teo, who is also Coordinating Minister for National Security.
“We need to strengthen the multilateral system, improve it where we need to, and not sideline it,” he said.
Asean and China have always been interconnected and interdependent, because of geography and historical ties, he said, adding that economic cooperation is a key pillar of that relationship.
China, for instance, has been Asean’s top trading partner eight years in a row, while Asean has been China’s third biggest trading partner for the last seven years.
China was also Asean’s third largest source of foreign direct investment last year, while Asean in its entirety was China’s biggest foreign investor.
Building on these strong ties, the two sides can work to integrate and connect more in new areas in infrastructure development and in the digital domain, said Mr Teo.
Asean requires investments of around US$210 billion (S$287 billion) a year until 2030 for its infrastructure-building, according to the Asian Development Bank, and Asean’s current implementation of the Master Plan on Asean Connectivity 2025 will mean plenty of investment opportunities for businesses, Mr Teo said.
The plan maps out a comprehensively-linked Southeast Asia involving infrastructure, innovation, logistics and skilled-labour mobility.
He cited the examples of the Kunming-Singapore Rail Link, which will connect Kunming in China’s southern Yunnan province to Southeast Asia; and the Chongqing Connectivity Initiative Southern Transport Corridor, which will link southwestern China to this region, and allow Asean countries to reach new markets in Western China and Central Asia faster.
Mr Teo also said the two sides are in the midst of upgrading the Asean-China Free Trade Area agreement, and working to conclude negotiations for the Regional Comprehensive Economic Partnership, which brings together the 10 Asean member states and Australia, China, India, Japan, South Korea and New Zealand.
These two accords, plus the 11-member Comprehensive and Progressive Trans-Pacific Partnership, will “send a strong message of our region’s commitment to trade liberalisation and growing the rules-based trade architecture” when they come into force. They will also act as building blocks to an eventual Free Trade Area of the Asia-Pacific, said Mr Teo.
As for committing to a rules-based order, he said Asean is working towards harmonising its trade and investment laws so that the grouping is fully integrated economically. The “constructive management” of the South China Sea issue has also put Asean-China relations on a positive track, he said.
“Singapore is not a claimant state, and we do not take sides on the merits of the respective territorial claims. However, we have an interest in the freedom of navigation and overflight, peace and stability in the region, and peaceful resolution of disputes in accordance with international law, including UNCLOS (United Nations Convention on the Law of the Sea),” said Mr Teo.
While there is still much work to be done on the Code of Conduct in the South China Sea which sets out rules and norms related to the disputed waters, “all parties must strive to enhance mutual trust and confidence, strengthen practical cooperation, and refrain from actions that could undermine the process as well as peace and stability in our region”.
Asean and China agreed early this month on a single text to negotiate the Code of Conduct.
Optimism over opportunities presented by China’s Belt and Road Initiative featured big on the first day of the two-day forum, as did fears over the US-China trade war and a global trend of protectionism.
“Protectionism always ends badly,” Britain’s international trade minister Liam Fox said in a panel discussion. “Trade is a means to an end. It enables us to spread prosperity... and underpins social cohesion.”
OCBC Bank’s chief economist Selena Ling said the urgency is for Asean to step up and “grow local champions” – countries that can go global rather than be stuck in being a basic manufacturing base.
The Singapore Business Federation also launched an Infrastructure Committee at the forum that aims to help local firms plug into regional infrastructural opportunities. The committee is made up of 15 key players from infrastructure-related sectors, such as in construction, utilities, urban planning and legal and financial services.
Several Memorandums of Understanding and initiatives were launched to promote business, networking and collaboration between Asean and China.