Transcript of speech by PM Lee Hsien Loong at the DBS Insights Conference China Dialogue on 12 April 2018.
Good morning everybody, 大家早上好。Distinguished guests, ladies and gentlemen, may I just start with a short introduction and a few remarks to set the stage. We will then have a conversation with Mr Robin Hu who will interrogate me.
I am very happy to be here to celebrate DBS’ 50th anniversary as well as the 25th anniversary of DBS’ operations in China.
DBS opened its first representative office in Beijing back in 1993, long before China liberalised its banking sector. Subsequently, it became the first Singaporean bank to incorporate in China in 2007. It was the first foreign bank to commence business in the Shanghai Pilot Free Trade Zone. DBS now employs more than 2,000 people across China.
DBS took advantage of the longstanding and close partnership between Singapore and China. Our two countries established formal diplomatic ties in 1990, but the foundations were laid down by our leaders long before that. This year marks the 40th anniversary of China’s reform and opening up policy (改革开放), as well as the 40th anniversary of Mr Deng Xiaoping’s visit to Singapore in 1978. Two years before that, in 1976, Mr Lee Kuan Yew had visited China for the first time.
As China reformed and opened up, many Singapore businesses seized the opportunities. They ventured into China’s vast market. Today, Singapore companies are present in almost every province in China.
Over the years, we have built up extensive trade and economic links. China is now Singapore’s largest trading partner and source of tourists. We are China’s largest foreign investor and a key offshore RMB centre.
Between the two governments, our partnership has evolved with the changing development priorities and capabilities of both sides, which is reflected in our three Government-to-Government (G-to-G) projects. The first G-to-G project was the Suzhou Industrial Park that facilitated China’s industrialisation efforts. The Suzhou Industrial Park has done very well and is being replicated in other cities. We then embarked on the Sino-Singapore Tianjin Eco-City project to support China’s sustainable and green development. The Sino-Singapore Tianjin Eco-City is celebrating its 10th anniversary this year. The third G-to-G project is the Chongqing Connectivity Initiative that fits in with three of China’s development priorities. It is a key priority demonstration project for the Belt & Road (B&R) Initiative, Western Region Development and Yangtze River Development. The B&R Initiative involves cross-border financing arrangements as well, and this has helped to lower financing and logistics costs for many Chinese companies. Indeed, the first cross-order REITS from Western China was listed on the Singapore Exchange just two weeks ago, and that was arranged by DBS. One important component of the Chongqing Connectivity Initiative is the Southern Transport Corridor. This is a link that connects Gansu to Chongqing, to Guizhou, to Guangxi, to Beibu Gulf, and to Qinzhou Port. From there, it goes down to Singapore and beyond, to the whole world. It is a way to link up the B&R, and to provide a more expeditious and economical link for South Western China and Western China to connect to the world, to export to the world, and to do business with the world. This is an important initiative, which is strongly supported by both governments.
Apart from bilateral cooperation, both sides are also working together on regional initiatives, such as the Asian Infrastructure Investment Bank (AIIB) and the B&R Initiative. Singapore is an early and strong supporter of both. We believe that these initiatives will benefit many countries that need more and better infrastructure. We also believe that these initiatives allow China to play a significant and constructive role in the international system.
Singapore and China have made the B&R Initiative a new focus of our bilateral cooperation. Part of it is the infrastructure connectivity, like the Southern Transport Corridor. But we have also identified additional areas of cooperation including financial connectivity, third-country collaboration, and legal and dispute resolution services.
Singapore’s financial centre is well-placed to support the B&R Initiative. Already in our bilateral cooperation, financial connectivity is a key highlight. Singapore and Chinese banks operate in each other’s markets. Singapore has strongly supported China’s RMB internationalisation efforts. Since June 2016, we have included the RMB as part of the MAS’ Official Foreign Reserves. This reflects our belief in the future development and importance of the RMB.
Singapore can play a more active role in supporting B&R financing needs in third countries. Many Chinese companies use Singapore as a base for their operations in the region. If we go by Chinese figures, Singapore accounts for 85 per cent of total inbound investments to China from B&R countries, and of China’s outbound investments to B&R countries, nearly one-third goes to Singapore. As for Southeast Asian infrastructure projects, two-thirds of them are arranged by Singapore-based project finance teams. Chinese banks in Singapore have committed S$100 billion to finance Singaporean and Chinese companies involved in B&R projects. Singapore, with our financial centre, can help to structure and provide specialised financing as well as insurance coverage for B&R infrastructure projects. This strong record of project financing in Singapore is also supported by our reputable and credible legal system. We have a full suite of mediation, arbitration and litigation services to resolve cross-border commercial disputes.
All these initiatives between Singapore and China will open up more opportunities for our businesses and for our region.
But of course, this is contingent on the overall strategic climate. There are trade tensions which have become acute, particularly between the US and China. There is a real risk that this will undermine the multilateral trading system, a system which has underpinned the growth and prosperity of many countries, including China and Singapore.
China’s continuing progress and development depends on a stable and conducive external environment. There are no winners in trade wars. Everyone loses. We hope the trade conflicts can be resolved amicably. We hope that China will continue to develop and grow, and the region and the rest of the world will develop and prosper with it.
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