On Singapore's third government-to-government project with China

We are embarking on this project at a time when China is undergoing institutional reform. What Singapore could do, and which also lay at the heart of our bilateral cooperation, was to help China pursue the developmental path that it has decided for itself.

When we started the Suzhou Industrial Park (SIP) in 1994, the project addressed a particular set of challenges specific to a particular era. China no longer needs another SIP. What China faces now is the issue of institutional reforms. China has already built up its cities and basic infrastructure. What they need to do is to reform their institutions and link up the transportation networks across the country.

Compared to other countries, the cost of domestic logistics within China is rather high. The logistics network is not very accessible and there are many barriers. If China intends to reform and invest in this area, we are willing to work with China and undertake a project together, with the aim of helping China pursue the developmental path that it has decided for itself.

Singapore takes government-to- government collaborations seriously. They should be of value to both parties and not be a burden. We do not take a purely commercial view on such projects but neither can these projects lose money indefinitely.

If your only goal in this collaboration is to profit in monetary terms, you would be missing the point. This project should not only be commercially viable, but also support the development of China. Through policy innovation and pilot-testing of new policies, the project can catalyse the overall development of the western region. So we should not focus on the short-term commercial benefits. Rather, we should take a long-term view and take advantage of the opportunities and innovative measures to break new ground.

Singapore enterprises can draw on their experience doing business with multinational corporations, and use this as the basis for working with Chinese enterprises in this project. This project will strengthen the "Singapore brand" in China.

Of course, we cannot expect Singapore enterprises to make losses indefinitely, so we must achieve a good balance between commercial interests and strategic interests.

On the Tianjin Eco-city, Singapore's 2008 bilateral project with China

The cost of building an environmentally friendly city is high, and especially so for the Tianjin Eco-city because it was built on a site with harsh conditions, such as saltpans and polluted water-bodies. There is also competition for human resources because the Eco-city is quite close to more developed cities such as Tianjin city and Beijing.

So we need the Chinese authorities' continued investment and attention to create favourable conditions for the project to succeed, such as by improving its transport connectivity. The development of Binhai New Area must also be taken into account, due to its large area - several thousand square kilometres. The Eco-city is only a small part of it, so it is a challenge to stand out, maintain demonstration value and ensure commercial viability. But, overall, the Tianjin Eco-city has done well, and its development beyond the Start-Up Area is highly anticipated. There are growth opportunities arising from the Beijing-Tianjin-Hebei integrated development.

On the 'Singapore brand' in China

Some have described the impact of SIP as being similar to Daqing and Dazhai, the model industrial and agricultural projects initiated by Chairman Mao Zedong. I would be cautious about overstating SIP's impact. That said, many officials hailing from different parts of China have visited SIP (and) many want us to set up similar industrial parks in their provinces and cities.

While many provinces would like Singapore to set up industrial parks, we must be judicious with the "Singapore brand" and not dilute it, otherwise, it will soon lose its value.

The reality is that China already has the resources, capability and experience to initiate its own development programmes. But local governments see the value of the "Singapore brand" in attracting foreign investments, and in their relationship with the central government.

For the project to be successful, Singapore must leverage on our strengths. We have to do our homework and research carefully, discuss with stakeholders, and select projects that play to our strengths.

Most importantly, Singapore must be successful. If we were not successful, we would lose relevance and value.

As China deals with its domestic challenges, it may find Singapore's experience and ideas useful as a reference.

Our officials have observed how China's interest in Singapore has changed over the years. In the beginning, the officials wanted to know how we attracted businesses and investments, and built modern industrial parks. In recent years, the interest has been in social management. While it is impossible to transplant Singapore's model into China, the Chinese officials are studying our system closely.

On territorial disputes in the South China Sea

Singapore is not a claimant state. We do not take sides. However, we are part of Asean. As a regional organisation, Asean has its views on the South China Sea issue and has an interest in regional peace and stability. As a small country highly dependent on trade, we regard the right of freedom of navigation and overflight as well as the upholding of international law seriously.

The territorial and maritime disputes in the South China Sea are not just an issue between a few countries, as they affect all Asean countries. Asean, as the regional organisation, cannot turn a blind eye. Hence, Singapore supports Asean's goal of concluding a Code of Conduct in the South China Sea with China as soon as possible

Singapore has just taken over the role of country coordinator for Asean and China Dialogue Relations. Asean and China already have a comprehensive and substantive agenda for cooperation, and we hope to continue making progress and build closer relations.

On the more difficult issues, such as the South China Sea dispute, Singapore will be a fair and objective coordinator, in order to help China and Asean reach a consensus, and continue supporting peaceful development in the region.

On prospects for bilateral relations

In the 25 years since we established formal diplomatic ties, the relationship between Singapore and China has greatly strengthened. We have far surpassed the economic cooperation and trade volume targets that we set out 25 years ago.

Currently, the conditions for a continued partnership are even better than before. China has undergone drastic change and Singapore too is very different from 25 years ago. Whether in culture, tourism, business, economy or in tertiary education, there are many opportunities for us to continue enhancing our cooperation.