By Tom McGregor, freelancer based in Beijing
Singapore gained its independence five decades ago and at that time; most Singaporeans were poverty-stricken. Yet, the City-state’s founding father, Lee Kuan Yew, had a long-term visionary plan to enact drastic reforms to transform Singapore into a powerhouse of trade and finance in the Asia-Pacific.
The so-called Singapore growth model has set the standard for its fellow Asian countries to emulate. Beijing has also sought strong ties with Singapore ever since establishing diplomatic relations 25 years ago.
This weekend, Singapore will celebrate its 50th anniversary of independence and the Chinese send their highest regards. Chinese Foreign Minister Wang Yi visited his Singaporean counterpart, K Shanmugam, on Monday to praise the close cooperation between both countries.
Boosting stronger connectivity in Western China
In recent years, China and Singapore have engaged in joint projects through the ‘One Belt, One Road,’ initiative. Singaporean investors have helped build the Suzhou Industrial Park and Tianjin’s Eco City, which have already been completed.
Now, the two countries are setting the stage for a flagship project to develop full-scale connectivity – IT (information technology), transportation links and logistics – in Western China and centralizing operations either in, Chongqing, Chengdu or Xian.
"We want this project to draw on Singapore’s strengths and also serve China’s needs," FM Wang told Today news. "We want to improve physical connectivity and logistics in central and western China."
Both foreign ministers hope the project could jumpstart better business deals between both nations in the future.
Singapore keeps faith in Shanghai Stock Market
China has good reasons to encourage more cooperation with Singapore. The Shanghai Stock Exchange has stumbled in the past few weeks.
Nevertheless, Singaporean investment firms have not lost hope. The Singapore sovereign wealth fund, GIC, which manages over $US 344 billion in assets, has vowed to keep buying into China’s volatile stock market.
According to its July 21 filing, the world’s eighth largest sovereign wealth fund holds 52 listed stocks in China, valued at over $US 7 billion.
"It did open up some opportunities for people like us, who take a longer term view and we don’t have such kinds of liquidity constraints," Lim Chow Kiat, GIC chief investment officer, told CNBC business news. "That’s a clear positive."
Singapore’s Temasek Holdings also announced last month that its fund managers will continue to bet on China.
Spearheading good relations with ASEAN
On the diplomatic front, Singapore seeks goodwill with Beijing to raise China’s standing in ASEAN (Association of Southeast Asian Nations). Singapore has long played a crucial role as a neutral mediator to balance power among different countries in the region.
Singapore prefers to avoid taking sides amidst bitter diplomatic disputes. The City-state is small in land-size but serves as the regional hub for finance and trade. Singapore succeeds when its neighboring nations favor security, stability and peace above all else.
Additionally, Singapore sees major diplomatic advantages by reaffirming its support for ‘One Belt, One Road’ connectivity projects in Western China.
"It is not so much Singapore’s capital or technical know-how is needed," Singapore FM Shanmugam told ChannelNewsAsia. "But it will have a demonstrative effect with Singapore and it is something of deep importance to China."
Forging a long-term partnership
50 years ago, much of the world saw Singapore as an underdog. Back then, few had expected the City-state would prosper as it does today. Currently, it’s the economic engine driver of growth for the entire Southeast Asian region and a premier place to conduct business.
And China too was a poor country just a few decades ago. China and Singapore have deepened economic and diplomatic ties to maintain strong GDP (Gross Domestic Product) growth rates. These two former underdogs have grown up to become the big dogs of Asia.
( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )
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