Keynote address by Deputy Prime Minister and Minister for Finance Lawrence Wong at the 17th Asia-Pacific Conference of German Business (APK) on 14 November 2022.
Chancellor Mr Olaf Scholz and Vice-Chancellor Robert Habeck
My Cabinet colleague Dr Vivian Balakrishnan,
Co-Chair of the APK Dr Roland Busch,
Excellencies and Distinguished Guests,
Ladies and Gentlemen
I am happy to be here at the 17th Asia-Pacific Conference of German Business, or the APK in short. Let me start by extending a very warm welcome to all our German visitors and friends here today. I am glad to have the chance to meet quite a number of you last night at our Singapore Evening; I hope you had a good time there.
I want to, in particular, thank Chancellor Scholz for his strong support and commitment in engaging Singapore and the Asia-Pacific region, illustrated no less by your presence here at this conference. Thank you very much.
This is the second time Singapore has had the privilege of hosting the APK. The previous occasion was in 2010. Similar to today, it was a sizable gathering then.
There was considerable optimism in 2010, because the world, as many of you would remember, had just emerged from the deep and painful recession caused by the Global Financial Crisis.
In Asia, the mood was especially buoyant. We were set for a strong growth trajectory after rebounding swiftly from the Financial Crisis. And many businesses, including German businesses, were coming to Asia to be part of that growth story.
We all shared a common objective – to take advantage of globalisation and trade to jump-start growth, and work to deepen economic ties with one another. In fact, the EU and Singapore started negotiations for the EU-Singapore FTA around that time – an agreement which has since entered into force.
Driving all this was an abiding belief that economic interdependence would enhance peace and stability, and help all of us to grow and prosper together.
12 years later, we are gathering once again to explore opportunities between our two countries, Germany and Singapore, and our two regions, EU and ASEAN. But our circumstances could not be more different. Because now, we find ourselves on the cusp of a new era in history. Indeed, in Germany, I believe the Chancellor has spoken of a “zeitenwende” – a major turning point in history. I understand that the literal translation in English means a turning point, but the nuance of it is sometimes lost a little bit in translation, as it means more than that.
And indeed, it is so. A geopolitical rivalry, contestation, and the erosion of strategic trust have taken centre stage in the world and are fast reshaping the world around us.
In Europe, the war in Ukraine has had many consequences, disrupting energy and food supplies worldwide; and it has also forced European countries to reassess their security priorities.
Here in Asia, we are bracing ourselves for a more complicated and unpredictable future, driven by heightened US-China tensions.
Unlike its relations with the former Soviet Union, the US today is much more economically interdependent with China.
Unfortunately, these interconnections have not prevented relations from worsening.
Paradoxically, they may even make heightened tensions more dangerous,
Because we have seen how interdependence in strategic areas like critical technologies can be used as an instrument of geopolitical contest.
There are so many interlinkages between US and China today that it is hard to imagine how they can completely decouple their economies; but even selective decoupling in technological areas will not be easy or painless – it will have a devastating impact on the global economy.
So from Singapore’s point of view, we encourage better diversification. We are all for greater resilience but we would caution against moves that will lead us towards a more fragmented or Balkanised world, because that would leave all of us worse off.
Increasingly for all of us in Asia, we too must confront the risk of confrontation, conflict or worse, possibly even war, happening in the region. No one wants these to happen, but amidst mounting tensions and a lack of strategic trust, we know that accidents can happen, leading to unintended consequences. There are many flashpoints in Asia where miscalculations can happen – not just the Taiwan Strait, but also the South China Sea, and the Korean Peninsula.
All of these global developments will have profound implications for all of us in the world, and for countries like Germany and Singapore.
Both of us are export-oriented economies which have long thrived on the principles of free trade and a rules-based international order.
Amidst this changing environment, what can we do to continue to thrive in this new era?
Ultimately, key to peace and stability in Asia and the world is the state of the US-China relationship. Both powers have legitimate interests across Asia. While we can expect more intense and vigorous competition between the two powers in the years ahead, we hope they will eventually be able to find a way to co-existtogether, so that we have an environment that is stable and inclusive – one where countries big and small can compete and cooperate peacefully together.
The leadership on both sides will set the tone for this important bilateral relationship. Both President Biden and President Xi have talked on the phone five times in the past 16 months. But they will soon have their first face-to-face meeting in Bali – in fact, later today. We hope that through such interactions, both sides can better understand each other, and build a more stable relationship.
While the US-China relationship is the most consequential, it does not mean that the rest of us in the world are simply passive bystanders. We too have agency and collectively, we have the ability to shape developments in the region and the world. The reality is that we are moving toward a multi-polar world, one characterised by a wide diversity of overlapping interests.
Take Germany for example. As Chancellor Scholz had said recently, with its unique experience during the Cold War, Germany has no interest in seeing new blocs emerge in the world. Therefore, Germany does not want to decouple from China, which remains an important business and trading partner for Germany and Europe. And that, very much, is Singapore’s view too, as well as the views of many countries in ASEAN.
There are other players in this evolving Asian configuration.
India, for example, is rapidly emerging. It is seeing the fruits of its digitalisation and reform efforts, and it is set to become the third-largest economy in the world by 2030. India will play a larger role in regional and international affairs, and will make its own calculations independently on how to advance India’s interests in the world.
And then we have the Southeast Asian countries of ASEAN, which is also becoming a growth centre in our own right. We have a combined population of 660 million people, and a GDP of about US$3 trillion, which is projected to double, if not quadruple over the next two decades.
ASEAN also has a relatively young population and that means there is a demographic dividend to be harvested and tremendous potential if things go right for the region.
Within ASEAN, no country wants to be in the position to have to choose sides between China or the US. There can be no good outcome for us, if our countries were forced into two camps with a hard line or worse, a wall in between.
Instead, we want ASEAN to be a neutral core, around which we can build a stronger framework for cooperation for the region.
For ASEAN, this means keeping our region open, inclusive, and connected to the world.
It means welcoming all major partners, be it the EU, Japan, South Korea, or India, to build stakes in the region and create a web of interdependencies here.
It also means fostering the conditions for all the major powers to have overlapping circles of friends, so that countries can find it possible to have friends on both sides.
That is why we are very happy that the EU-ASEAN relationship was upgraded to a Strategic Partnership in 2020. We look forward to exploring stronger cooperation between our two regions in security, economic, and socio-cultural fields.
There are also new opportunities for cooperation,
In particular, in sustainability and climate change, for which we have a lot of shared interests.
Green businesses in ASEAN are set to expand further in the coming years. To realise the full potential, ASEAN countries will need capabilities in several key areas.
This includes the development of low-carbon industrial solutions such as in hydrogen and solar;
Carbon management services, such as in inspection and certification; and
Scaling up of blended finance to unlock private capital and help fund more green investments in the region.
Singapore will do our part in all these, by helping connect ASEAN to the world. As an international trade and financial centre, we serve as an important gateway for people and businesses. We will build on the linkages built around Singapore, and deepen our connectivity with other regions and countries.
Importantly, the close ties between Germany and Singapore can help to anchor and bring our two regions – the EU and ASEAN – closer together. Ours is a longstanding relationship built on shared strategic perspectives and mutual trust. We are both staunch supporters of multilateralism and an inclusive rules-based international order.
The bilateral relationship goes back as early as the 1840s, whenGerman merchant from Hamburg, Valentin Lorenz-Meyer, founded Behn, Meyer & Co., the first German trading company in Singapore.
Since then, many German Mittelstands have used Singapore as a base to serve the region, especially in high-growth sectors like electronics, chemicals, and logistics.
So the lesson here, if I may adapt from what the Chancellor said just now, is not just that it is good for people from Hamburg to visit Singapore, but it is good for people from all over Germany to visit Singapore. Good things can happen here.
One example is Rohde & Schwarz, a Munich-based electronics company. The company chose to establish its presence here in 1997, to make use of our hub capabilities, and capture market opportunities in China and South Korea. They have since expanded their market reach to Indonesia in recent years.
And we are starting to see more Germany companies moving into new areas like sustainability. For example, Henkel, an industrial adhesive manufacturer, has established a sustainable Singapore-based Global Supply Chain Hub, and is working with suppliers and business partners to use recycled materials and plastic resin alternatives.
Because of all these, the German presence in Singapore has grown substantially over the years. We now have over 2,100 companies here, including leading global firms like Siemens and DHL. The German community in Singapore is becoming more vibrant. The best gauge of this is that you can get good German food in Singapore now. And this has helped made Germany our largest trading partner in the EU.
Such was the strength of our relationship that it endured, and even grew stronger through the last three years of the pandemic.
Amidst closed borders, travel restrictions, and business disruptions around the world, we continued to see a healthy stream of German investments to Singapore. Most notably, BioNTech, Germany’s leading biotech company, set up its Southeast Asia HQ and manufacturing facilities in Singapore, to better serve the region.
Furthermore, last year, when we decided to open up our borders and launch Vaccinated Travel Lanes, Germany was one of the first countries with which we launched such a Vaccinated Travel Lane, and that helped to facilitate people-to-people exchanges. I am sure many of you were able to make use of that to travel.
So our relationship has really come a long way over the decades. But we believe there is much more Singapore and Germany can do together.
Beyond business, we are also collaborating in many other areas, from R&D to skills development and education.
I am glad that we took another step forward in our relationship last evening, with the signing of the Germany-Singapore Framework for Sustainability and Innovation. This will increase private sector collaboration in areas like advanced manufacturing, mobility, and green technologies.
And we will continue to explore collaboration in new areas, to chart a shared future based on sustainability, innovation, and resilience.
All of these meaningful efforts will deepen and grow our relationship. It will also help Germany build deeper roots in Asia, and in doing so, contribute to stability and prosperity in the region.
Any enduring partnership is only possible if it is built on close people-to-people ties.
This remains key because now, more than ever, we need more avenues for our countries to come together, understand each other’s perspectives and concerns, and find ways for stronger mutual collaboration.
In this regard, the work of international business chambers such as the Asia-Pacific Committee of German Business, the Singapore-German Chamber of Industry and Commerce, and platforms like APK, are crucial to anchoring the close ties between our two countries, and our two regions.
I would like to thank all of you for your efforts and contributions. I would also like to thank the organisers of the APK for bringing us together today.
To conclude, German-Singapore relations have been underpinned by that strong sense of mutual trust and cooperation for many decades. And despite the economic and geopolitical headwinds ahead of us, I am confident that there remain substantial opportunities for us to work together; for us to strengthen mutual collaboration and growth bilaterally, and here in the Asia-Pacific region. I am confident that if we continue to work together, we will flourish and thrive together, and we will maximise the chances for continued stability, peace, and prosperity in Asia and the world for many more decades to come.
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