Singapore’s approach to free trade and constantly striving to upkeep its preeminent position as a business hub in the region is one of the far-sighted policies that would stand test of the time.
Needless to say that successive policies would eventually change the environment in which they were originally implemented, compelling governments to constantly update and renew policies to suit the rapidly changing socio-economic atmosphere.
Given the island-state’s strong trade and logistic links to China, Singapore can play a vital role in the external part of China’s new “dual circulation” economic strategy, and can be a base for Chinese companies looking to expand into South-east Asia.
China’s dual circulation strategy is aimed at spurring domestic consumption and self-reliance while at the same time enhancing and encouraging foreign investment aiming at export markets.
“As a key regional financial hub, Singapore is also able to support China’s opening up of its financial and capital markets. ”, said Foreign Minister Vivian Balakrishnan in an interview with Chinese official news agency Xinhua ahead of his visit to Wuyishan in Fujian province in south-eastern China.
China’s largest foreign investor
Singapore has been China’s largest foreign investor over the past seven years, and Singapore companies can continue to tap the large Chinese market in areas where its expertise best matches the needs of China’s domestic economy, said Dr Balakrishnan in the interview.
“We are well positioned to serve as a gateway for Chinese investors to access Asean markets and opportunities, as well as a key node to channel investments into China from the rest of the world,” he said, adding that a quarter of all Chinese outward investments to Belt and Road countries flowed through Singapore.
Despite the pandemic, China and Asean have also continued their economic cooperation and are working on upgrading their free trade agreement so that it “remains ‘fit for purpose’ in a post-pandemic world”, said Dr Balakrishnan.
Chinese data shows that Asean has become its largest trading partner last year.
According to the Minister, the restructured FTA will have new priorities areas emerged out of the Covid outbreak, such as the digital economy, public health and the reduction of non-tariff measures.
Recently Asean also signed the Regional Comprehensive Economic Partnership (RCEP) with China, Australia, New Zealand, Japan and South Korea. Thus it has become the worlds’ biggest trade bloc, claiming for 30 per cent of global GDP.
“When RCEP comes into force, it will send a strong signal that our region remains committed to free and open trade. At the same time, the door remains open for other like-minded partners to join us,” he said.
Foreign Minister in no uncertain terms stressed the Singapore’s commitment to free and open trade while welcoming other like-minded parties to join in. In other words, what matters is to promote free trade and de-regulation throughout the region, which, certainly, is the harbinger of prosperity.
