Speech by DPM and Minister for Finance Heng Swee Keat at the 1st Singapore-Shanghai Comprehensive Cooperation Council Meeting on 24 May 2019 at the Xijiao State Guest Hotel, Shanghai.
Mr. Ying Yong, Mayor of the Shanghai Municipal People’s Government,
Ladies and Gentlemen
I am very happy to be here in Shanghai with Mayor Ying Yong to launch the Singapore-Shanghai Comprehensive Cooperation Council (SSCCC).
This is my second visit to Shanghai in a year. I was here in June last year to better understand the science and innovation scene in Shanghai. I was impressed by the pace of growth and dynamism. I met entrepreneurs, and also visited one of Shanghai’s established educational institutes, ShanghaiTech University.
Singapore-China relations are strong, multifaceted and longstanding. It is underpinned by regular high-level exchanges.
Over the last few months, our President Halimah Yacob, Prime Minister Lee Hsien Loong, Senior Ministers Teo Chee Hean and Tharman Shanmugaratnam have all visited China. Last year, Premier Li Keqiang, Vice Premier Han Zheng, and Vice President Wang Qishan visited Singapore.
I have also just met Premier Li Keqiang, Vice Premier Han Zheng, and other Central leaders in Beijing.
Bilateral relations have strengthened to an all-round cooperative partnership progressing with the times (与时俱进的全方位合作伙伴关系).
Our three Government-to-Government projects, the Suzhou Industrial Park, Tianjin Eco-city, and China-Singapore (Chongqing) Connectivity Initiative (CCI), are all doing well.
Trade links between our countries are strong. China is Singapore’s largest trading partner, while Singapore is China’s largest foreign investor for six consecutive years.
Cooperation under the Belt and Road Initiative (BRI) through the four platforms of infrastructural connectivity, financial connectivity, third country collaboration, as well as professional and legal services is another highlight of our bilateral relations. The BRI opens up new frontiers of connectivity, and new possibilities for growth and development. It is a strategic and forward-looking initiative launched by President Xi Jinping.
Singapore is an early supporter of the BRI and is also the largest destination for Chinese investments out of China into the Belt and Road countries.
We have also made progress on a number of bilateral initiatives over the past year.
First, we upgraded the China-Singapore Free Trade Agreement. This sends a strong signal on our commitment to a free and a rules-based trading system.
Second, we signed the MOU on the CCI-New International Land-Sea Trade Corridor, which connects the land-based New Silk Road Economic Belt and the 21st Century Maritime Silk Road.
Third, we upgraded the China-Singapore Guangzhou Knowledge City to a state-level bilateral cooperation project. This will further our cooperation in the development of the Guangdong-Hong Kong-Macao Greater Bay Area.
Today marks another milestone in our deepening relations with the launch of the SSCCC. It has been less than a month since we signed the MOU to establish the Council, which was witnessed by PM Lee and Premier Li. I would like to express my appreciation to Mayor Ying Yong and the Shanghai government for your warm hospitality, and your efforts in making this inaugural meeting possible within such a short time.
Milestone in Singapore-Shanghai relations
Singapore and Shanghai have always enjoyed strong economic relations. Shanghai is Singapore’s second largest direct investment destination amongst China’s provinces and municipalities.
2019 is a special year for Singapore-Shanghai relations. It marks the establishment of this Council, as well as Singapore being the Country-of-Honour at the Pujiang Innovation Forum.
This Council is a reflection of Singapore’s and Shanghai’s shared international outlook, and the strategic role of our cities as international gateways to our respective regions. This Council will strengthen Shanghai’s role as the “dragon head” of the Yangtze River Delta (YRD) integration (长三角一体化), and also Singapore’s position as a Global-Asia Node for Technology, Innovation and Enterprise.
Singapore and Shanghai have a “complementary” (互补性) relationship.
Both are undergoing economic transformation and moving up the value chain as our economies mature. As the global economic center of gravity shifts towards Asia, it is timely for us to explore how Singapore and Shanghai can ride on this wave of growth and deepen our cooperation.
As both Singapore and Shanghai tackle challenges arising from our economic transformation, there is much room for Singapore and Shanghai to exchange experiences with one another (互学互鉴), and find synergy in each other’s strengths.
The potential for collaboration between Shanghai and Singapore is huge. On the one hand, we can strengthen existing cooperation and continue to deepen trade and economic ties. On the other, we can further explore new opportunities in a comprehensive manner, where more government agencies and companies can come together to pilot new initiatives. I fully agree with the six areas of cooperation Mayor Ying Yong outlined earlier. We are exploring these areas of cooperation under SSCCC and it may grow over time.
Let me share some ideas on these areas:
First, the BRI is strategic and forward looking, with tremendous potential not only for Singapore and China, but around the world. Singapore established the Infrastructure Asia Office in October last year to better connect the demand and supply side for infrastructure projects. Infrastructure projects are long term and capital intensive.
These are expected to last a long time, and we have to get many aspects right. One, we have to plan our projects properly to ensure both economic viability and social impact. Second, we have to engineer these projects well. Three, our new infrastructure must also be resource efficient. Four, we must work on structuring the projects well.
This is why we are very happy that the World Bank has set up their infrastructure hub in Singapore, to look at training officials from the Asian region. This will enable them to learn more about infrastructure planning and ensuring that the infrastructure meets its purpose.
On the supply side, the demand for infrastructure around the world, or even within Asia, is very large – in the trillions of dollars. No government can sustainably meet their infrastructure needs using only public funds. Private sector is needed to finance these projects.
We need risk capital from multilateral development banks to catalyse private funding, especially for developing countries where resources are limited. China started the Silk Road Fund and the Asian Infrastructure Investment Bank (AIIB). These complement the World Bank, the International Finance Corporation (IFC), the World Bank’s Multilateral Investment Guarantee Agency (MIGA), as well as the Asian Development Bank.
We welcome more Chinese companies – with experience in building high-speed rail projects, airports and sea ports – to take part. China can play a part in the development of infrastructure around the world. We look forward to the strong participation of Chinese companies, and Shanghai can play a leading role here.
Second, Shanghai and Singapore are both key financial gateways to China and Southeast Asia and the region. We can deepen financial connectivity with one another.
Singapore can partner Shanghai in developing RMB cross-border solutions to better meet financing and hedging needs of companies. We can also strengthen capital markets connectivity as Chinese bonds and equities grow in importance to global investors, and to explore new ways in which we can structure bond offerings and assets.
Real Estate Investment Trusts (REIT) is another area where we can work together to turn long-term assets into a stream of earnings. If these REITs are properly structured, many investors – including pension funds and insurance companies – will be keen to take them up as these are safe assets with reasonably good returns. In Singapore, we have listed a number of REITs, and we can continue to explore new possibilities.
The participation of our financial institutions in each other’s ecosystems will also help open additional sources of financing to support our enterprises. Our three major banks in Singapore have the headquarters of China in Shanghai. Such mutually beneficial moves will strengthen our positions as key financial nodes in Asia and the world.
Yet another area of collaboration is in Financial Technology (Fintech). Fintech is a big and growing area. Fintech opens up many new areas of cooperation and also competition. As we can see from developments in China, non-bank institutions can also become “banks”. In this regard, we welcome our Shanghai friends to participate in the Singapore Fintech Festival and Singapore Week of Innovation and Technology from 11 to 15 November this year.
Third we can work together to apply science, technology and innovation to tackle common challenges, including ageing, climate change and urban livability. Singapore is honoured to be invited as the Country of Honour at the Pujiang Innovation Forum. I hope that through this and many other activities, we can facilitate greater exchanges between our entrepreneurs and our start-ups, as well as deepen existing research collaboration. Here, I would like to invite the entrepreneurs and innovators based in Shanghai to take part in the Singapore Week of Innovation and Technology, that is also happening in the same week of the Singapore Fintech Festival.
Fourth, to improve the ease of doing business. Singapore can exchange experiences with Shanghai on best practices in government-to-business interactions. I hope that companies from both sides will provide constructive feedback and suggestions.
Fifth, to co-create solutions in urban governance to address current and future urban challenges. Shanghai is a very well developed city, with a good blend of old and new. Since my first visit to Shanghai, Shanghai has grown significantly. For Singapore, we are investing in making Singapore greener, smart, sustainable and liveable for our people. We have to make the best use of our limited land, while preserving our culture and heritage. This is an area of urban governance where we can learn from one another.
Last but not least, to deepen people-to-people exchanges, be it in training of cadres, student and tourism exchanges, or exposing more Singapore officials, businesses and our young people to China through Shanghai. This is the “heart-ware” that binds us together. We should promote more exchanges across different groups from both sides, including academia, research, business, and students.
I am glad that we are off to a good start. We will be witnessing the signing of five MOUs among our government agencies and companies in the areas of collaboration that I have just mentioned. I hope that SSCCC will grow from strength to strength and see more of such collaborations in future.
Spirit of Openness and Staying at the Forefront
Singapore and Shanghai share an important trait – the spirit of openness. Being open allows us to take in a diversity of ideas and help us grow from strength to strength, keeping us at the forefront of developments and innovation.
Shanghai is at the forefront of piloting and implementing China’s economic reforms. In 1990, China’s first stock exchange, the Shanghai Stock Exchange, was set up in Shanghai. In 2013, the Shanghai Free Trade Zone was established, where the first negative list was piloted. This year, Shanghai will also see the launch of the Shanghai Technology & Innovation Board.
As a country that is highly reliant on trade, Singapore stays open and connected to the global markets for development and success. We have a shared interest in one another’s prosperity.
Through this spirit of openness, I hope that many “firsts” will be piloted through our council. Building on the strong foundation of business cooperation between Singapore and Shanghai agencies and companies, we can do more together, pilot new collaboration initiatives, and bring the Singapore-China progressive partnership to a new level.
I look forward to exchanging ideas between the two sides and to the success of our collaboration in the years to come.
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