DPM Heng Swee Keat at the FutureChina Global Forum 2021

DPM Heng Swee Keat | 12 July 2021

Speech by Deputy Prime Minister and Coordinating Minister for Economic Policies Heng Swee Keat at the FutureChina Global Forum 2021 on 12 July 2021.


Mr Lee Yi Shyan, Chairman of Business China,

Mr Tang Liang Zhi, Mayor of Chongqing,

Mr Liao Guo Xun, Mayor of Tianjin,

Distinguished Guests,

Ladies and Gentlemen,

A very good morning.


I last spoke at this forum in September 2020, where we discussed how to build a more resilient future, post-COVID-19.

Today, as we meet again, the pandemic is far from over. In Southeast Asia, we are battling new waves of the virus. We must be prepared to live with an endemic COVID-19 for years to come.

Before the crisis, no one could have predicted the length and devastating trajectory of the pandemic. Nor how COVID-19 has accelerated structural shifts, and created new ones. The global switch to digital is dramatic, with many activities moving online like today. COVID-19 has also reminded us of the urgency of addressing global challenges like climate change. But of even greater concern is that the pandemic has accentuated geopolitical tensions, especially between US and China.

We are living in a world of growing uncertainty, with changes occurring ever more swiftly. So the theme of today’s conference – that we are in a state of “never normal”, is most appropriate. We cannot predict the future, but we can, and must, seek to create a better future. How do we do so? The top priority now is to tackle COVID-19 together, through continued vigilance and sustaining the momentum on vaccination. Beyond COVID-19, we must tackle the structural challenges that are reshaping the global economy, seek new sources of growth, and forge new collaborations.

Three Decades of ASEAN-China Relations

This year, we mark three decades of ASEAN-China Dialogue Relations. Thirty years ago, economic cooperation was minimal. But as China’s ‘reform and opening up’ policy accelerated, China’s trade with the world, and especially with Southeast Asia flourished. Trade has boomed, growing by more than 60-fold. ASEAN and China are now each other’s biggest trading partners.

While COVID-19 has set back the global economy, the fundamentals in the region remain sound. There are 2 billion people in Southeast Asia and China, with one of the fastest growing middle classes in the world. There is large potential for catch-up growth, as most parts of Asia are still emerging. Beyond catch-up, we must seek to ride on the fourth industrial revolution. But to realise the region’s potential, each country must undertake the difficult task of economic restructuring, and find new ways to complement one another.

New Building Blocks for Regional Prosperity

Looking ahead, we must fortify the foundations of existing partnerships, and nurture new areas of complementarities. One important way is to strengthen the rules-based multilateral framework for trade and investments. The ASEAN-China FTA is a cornerstone agreement that has benefited all members. Let us work towards upgrading this Agreement, to reduce non tariff measures and address new priorities, especially for the digital economy. As we prepare to resume cross-border travel, we should rebuild our aviation links and further liberalise the ASEAN-China Air Transport Agreement to boost our region’s connectivity.

Beyond ASEAN and China, we must maintain the momentum for global trade liberalisation, and build confidence in multilateralism. RCEP, which was signed between ASEAN Member States, China, and four other major trading partners is an important next step. Covering one-third of the world’s population and one-third of global GDP, this is the biggest trade agreement in history. When the RCEP comes into force, it will further strengthen economic integration in the region. And we look forward to welcoming India to join the RCEP when they are ready. Closer economic integration in Asia will better enable us to realise the potential of the region, and contribute to global economic development.

Beyond FTAs, we should explore new building blocks to strengthen cooperation, to seek new sources of growth and address global challenges. Let me cite two – digital collaboration and sustainable development.

Digital collaboration will be a key building block for the future. COVID-19 has accelerated the global shift to digital, and we must move swiftly to respond to this shift. Let us further strengthen collaboration. One way is to pilot more city-to-city projects. The Smart City Initiative between Singapore and Shenzhen is an example, where we are digitalising end-to-end trade financing. We welcome collaboration with more interested partners. At the country level, we can establish Digital Economy Agreements. Singapore concluded such agreements with Australia, Chile, and New Zealand. We look forward to signing more. Over time, these agreements can contribute towards the development of common global frameworks and standards. This will ensure that cross border transactions and digital exchanges, including e-payments and data flows, are safe, secure, and efficient. This will enable us to better reap the potential of the digital economy.

Besides digital collaboration, a second key building block for the next phase of ASEAN-China cooperation is sustainable development. Climate change is an existential challenge. I hope that the 26th UN Climate Change Conference, or COP 26, later this year will achieve good global outcomes. Both ASEAN and China understand the urgency of the challenge – we have designated 2021 as the ASEAN-China Year of Sustainable Development Cooperation. As we seek to emerge from this crisis, we can focus on catalysing a green recovery – from investing in buildings that are more energy-efficient, to exploring cleaner energy sources such as solar and wind. Given the large infrastructure funding needs, we will need to improve the flow of cross-border capital and crowd in private funding. China’s Belt and Road Initiative or BRI is an important initiative, and a ‘Green BRI’ will be a major step in catalysing green infrastructure. Within ASEAN, the Catalytic Green Finance Facility was established to provide loans and technical assistance for green infrastructure projects. Singapore is also contributing to this green recovery effort through Infrastructure Asia to facilitate the flow of funds and expertise to bridge the infrastructure gap. We will also be issuing up to US$15 billion in green bonds for public infrastructure projects. Besides reducing carbon emission at source, we must also explore carbon sequestration – the long-term capture of carbon dioxide from the atmosphere. Nature-based solutions can provide one-third of the global mitigation necessary to stabilise warming to below 2 degree Celsius. With more than one-third of the world’s mangroves, and up to 120 million hectares of land for re-forestation, Southeast Asia has significant potential to contribute to nature-based solutions for carbon capture. Again, to realise this potential, we need to catalyse investments. One important building block is to set common standards, improve traceability, and create vibrant exchanges for the trading of carbon credits. Singapore will be launching one such global carbon exchange – “Climate Impact X” – later this year. This will allow large-scale, high-quality carbon credits to be sold through standardised contracts, and crowd in more investment.

To realise the promise of these building blocks, all stakeholders – governments, businesses, workers and communities – must be part of this effort. Business China has a valuable role, by providing platforms and opportunities for stakeholders to deepen collaborations, and forge new partnerships. If we can all work together, the ASEAN-China economic relationship will continue to deepen and broaden.

Managing Differences Constructively

But ASEAN-China relations are not confined to economic relations. There is a broader strategic context. Even as we deepen the ASEAN-China economic relationship, we must also manage the friction and disputes well. Otherwise, the progress could be undermined.

Relations between neighbours are often more complicated than relations between distant countries. Beyond specific issues, tensions and anxieties are often exacerbated by the disparity of size. These dynamics are further accentuated when Southeast Asian countries are concerned about being caught up in the intensifying strategic competition between the US and China.

Relations between all countries – big and small – must be conducted within the framework of international law. And this includes the resolution of disputes. There are important issues to be resolved between China and some Southeast Asia nations. These include competing claims in the South China Sea, and concerns over environmental degradation in the Mekong region. The key is to manage these disputes in a rational manner, in accordance with universally recognised principles of international law, including the 1982 UNCLOS, and with guardrails to ensure that tensions do not escalate out of control.

As much as we have made good progress on trade, we can make similar progress to resolve difficult issues. For instance, the South China Sea dispute is difficult to resolve, as various stakeholders are locked into entrenched positions. But we can and we must do all we can to reduce the risk of miscalculations. I am glad that ASEAN Member States and China are in negotiations on a Code of Conduct in the South China Sea, with the second reading of the Single Draft Negotiating Text underway.

Within ASEAN, we must also continue to forge stronger unity and stability. ASEAN has made good progress since its founding in 1967. But the continuing crisis in Myanmar is a grave problem. It is disappointing that the Five-Point Consensus that was secured at the ASEAN Leaders’ Meeting in Jakarta in April this year has not been implemented expeditiously. We continue to call for an immediate cessation of violence by all parties, the release of all political detainees, and meaningful negotiations and dialogue amongst key stakeholders to achieve a durable political solution that is in the interest of Myanmar’s people. ASEAN must stand ready to help, and to support mediation if possible.

Open and Inclusive Regional Architecture

I have touched on the new building blocks of ASEAN-China cooperation, and the importance of managing differences that may arise.

But just as importantly, stability and prosperity in Asia depends on our continued openness and engagement of all major partners.

Asia has prospered because of the favourable strategic context underpinned by US presence in the region after the Second World War.The US provided the foundations for global trade to flourish - through its efforts to champion an open, integrated, and rules based global order. Its security presence also contributed to regional security, ensuring that sea lines of communication remain safe and open. American companies have invested extensively in the region, bringing with them not just capital, but ideas and technology. This has benefited the region as a whole, including Southeast Asia and China.

US presence in the region will continue to be an important stabiliser. We welcome the US’ renewed focus on Asia under the Biden Administration. The TPP would have further strengthened the US’s ties with the region. Their withdrawal was regrettable, but we welcome the US to re-join the CPTPP when it is possible to do so.

It is not just US or China that have significant influence in the region. Japan has made major contributions, and stepped up in pushing for the completion of the CPTPP after the US withdrew. India too has been an engine of growth for the region, with its large market and fast-expanding middle class. Australia, New Zealand and South Korea also have important roles to play, as do European countries such as France, Germany, the UK and Switzerland.

So even as we create new building blocks between ASEAN and China, we must bear in mind that - an open, transparent, inclusive, and rules-based region ultimately benefits all countries – ASEAN, China, US and all major trading partners.

But the biggest challenge that the region faces is the strategic competition between US and China. Relations between the two major powers have become less volatile under the Biden Administration, but the underlying tensions remain. In the US, there is a strong bipartisan consensus, backed by growing public support, that China is the US’ main strategic competitor. The US has rallied its allies and partners by re-energising its ties with the G7, NATO in Europe, and the Quad in Asia. On China’s part, it wants to stake its rightful position in the world. The Chinese Communist Party celebrates its centennial this month, a significant milestone. Next year, it will hold the 20th Party Congress. We can expect that China will continue to take a firm stance on issues that it deems as its “core interests”, such as Taiwan.

For the foreseeable future, tensions are unlikely to abate. But despite their differences, it is in the interest of both the US and China to cooperate on common challenges. For a start, there is common interest between both parties to tackle COVID 19, coordinate global economic recovery, and address the long-term challenge of climate change. I am glad that both sides have acknowledged that there are areas of shared interests that they can work on together, and have stepped up bilateral exchanges. The key to stability for Southeast Asia and the world, is for the two major powers to focus on expanding common ground while preventing tensions from boiling over, as they settle into a new modus vivendi.

For ASEAN, we do not expect to change the course of the strategic competition, but we must do all that we can to keep the region open and inclusive. It is not a question of choosing sides, but of retaining our ability to make choices for ourselves, to advance our collective interest and do what is best for our peoples. Our region must remain firmly anchored on ASEAN’s own interests, and continue to build a regional architecture that is open, transparent, inclusive, and rules-based.

This is what ASEAN Centrality is about. I am glad that both the US and China have expressed their support for ASEAN Centrality. This shows an appreciation for the notion that a strong and stable ASEAN is not just good for ASEAN Member States, but also good for the world. We should also look out for areas where ASEAN can collaborate with both the US and China, especially in areas where we all have common interest.

Let me now say a few words in Chinese.


在这坚实的基础上,双方应该不断寻求新机遇,进一步深化未来合作。突如其来的冠病疫情加快了不同领域的变化步伐。其中,数码化和可持续发展是全球两大趋势。亚细安和中国应该探索如何加强这两方面的合作,把握新机遇。通商中国也扮演着重要的角色,提供一个企业之间交流与合作的平 台。

在携手合作的同时,我们也应该以大局为重,冷静处理任何的分歧。这需要通过多层次的沟通对话机制,协商妥善处理分歧。我们也必须继续加强亚细安在区域合作中的中心地位,并且构建一个 开放包容的地区架构。我们欢迎世界各国,包括美国,日本,印度等伙伴,与本区域实现 互利共赢的合作。这样一来,本区域就能够海纳百川。

承前启后,继往开来 - 我相信未来30年,亚细安和中国的关系将会更上一 层楼!




In conclusion, Southeast Asia’s relationship with China has come a long way since formal dialogue relations began three decades ago.

To further deepen this relationship, we should continue to strengthen the foundational building blocks of our relationship, such as the ASEAN-China FTA, whilst creating new building blocks of cooperation, in new areas such as digital collaboration and sustainable development. At the same time, we must manage any differences in a constructive manner. And even as we strengthen ASEAN-China cooperation, the region must remain open to all partners.

In this way, I am confident that our region will continue to remain a vibrant node of economic activity, and key engine of growth for the world for years to come.