14 October 2016
Mr Lee Yi Shyan, Chairman, Business China
Professor Neo Boon Siong, Dean Nanyang Business School
Fellow Business China Board Directors,
Lecturers and Graduates of the Future China Advanced Leaders Programme Distinguished guests, ladies and gentlemen
1. Good evening. I would like to thank Business China and Nanyang Business School for co-organising the Future China Advanced Leaders Programme (FC-ALP), and congratulate the fifth batch of participants who have just graduated from this course.
2. Programmes like the FC-ALP contribute to the excellent and longstanding ties between Singapore and China. Today, China is Singapore’s largest trading partner while Singapore is China’s largest foreign investor country. Our bilateral ties, which started from the previous generation of leaders like Mr Lee Kuan Yew and Mr Deng Xiaoping, are multi-faceted and our two countries collaborate on many projects, including the Suzhou Industrial Park, Tianjin Eco-City and more recently the Chongqing Connectivity Initiative.
3. The FC-ALP and other programmes organised by Business China provide useful platforms for Singaporean businessmen and government officials to enhance our understanding of China and promote greater awareness of its vast potential. And through these interactions, we help Singaporeans to identify new business opportunities in China and facilitate collaborations with their Chinese partners. Singapore welcomes China’s peaceful rise as a responsible stakeholder in the world order. We see this as a positive development, with tremendous potential to create new opportunities and improve lives for countries and people in Asia. Our aim is to enable both countries to benefit from each other’s strengths and grow together.
4. Some people may wonder what a small country like Singapore can offer to China. After all, China is an ancient civilisation with over 5,000 years of history and a population which is more than 250 times larger than Singapore. Prime Minister Lee Hsien Loong once described Singapore as a “bonsai plant” for China to study. Like a bonsai, Singapore is small and petite. Singapore has also done well since our independence in 1965, moving from third world to first in one generation. I was told by my Chinese friends that they are interested to learn how Singapore, as a Chinese-majority but multi-racial democracy, has grown a competitive economy, built a cohesive society and developed a good political system that has worked well compared to the western liberal democracy model which some countries like to advocate. Looking ahead, our relevance and value to China, and other large countries, is contingent on our continued success as a nation – this is the reality in international relations.
5. Singapore’s relevance to China also depends on our ability to add value in areas which they will find us useful, and can benefit by working together with us. So while it is important to help more Singaporeans to speak fluent Mandarin and gain a good understanding of Chinese history and culture so that they can engage the Chinese effectively, I believe these skills alone are not enough. After all, China already has more than 1 billion people who can speak fluent Mandarin and have a good understanding of Chinese history and culture. Our value to China will ultimately depend on whether we can continue to be a vibrant, successful city-state with stable political leadership; whether we can strengthen our position as a hub in Southeast Asia; how we are able to understand and connect with both the East and the West; and how we integrate free and open markets with good social development.
6. Internationally, Singapore’s value to China rests with us remaining as a credible and trusted country, who is respected and whose views are taken seriously. We are old friends with China and we want to continue enhancing this friendship between our leaders and our people. We also want to remain good friends with other major powers, including the US, EU, Australia, India, Japan, Republic of Korea and Russia. Hence, Singapore must protect our hard-earned reputation as an honest broker who mean what we say and say what we mean; as a country which upholds our commitments and adheres consistently with international laws; and as a people who have the courage to stand by our principles without fear or favour. If we lose these attributes, it will diminish our international standing and erode Singapore’s value to our partners, including China and ASEAN. This will adversely affect our security, trade and international space.
7. This evening, I would like to touch on three inter-related areas which I believe are important strengths for Singapore’s continued success and competitiveness, and which will in turn allow us to add value in our collaborations with China. First is our connectivity as a key node in Asia and ASEAN and our role as an effective interlocutor between the East and the West. Second, leveraging on our reputation as a reliable and trustworthy partner and turning this into a competitive advantage. And third, to continue our focus on talent development and for Singapore to remain open to talent and ideas from around the world. Let me elaborate.
Singapore’s Strengths: (i) Connectivity; (ii) Trust; and (iii) Talent
8. First on connectivity. This has been a key success factor for Singapore. Our physical connectivity through our sea ports and airport has been instrumental in enhancing our trade and investments, and these are areas which we will continue to invest in. Our connectivity also extends to other areas such as financial services; data and information; a regional HQ for companies with operations in Southeast Asia; a hub for meetings and conferences; and a launch-pad for growing new ideas and enterprises. Singapore is the port of call for Western companies to expand into Asia, and Asian companies venturing to Western and Southeast Asian markets, including hundreds of Chinese companies which have set up their regional or global headquarters in Singapore.
9. Our emphasis on connectivity is also reflected in the Chongqing Connectivity Initiative, our latest project with China which has generated more than USD6 billion in cross-border financial deals since its launch last November. Together with our existing G-to-G projects in Suzhou and Tianjin, as well as the collaborative initiatives in many other parts of China, I am confident that these channels will continue to facilitate greater two-way trade and investment flows between China and Singapore, and allow both countries to grow and prosper together.
10. As China’s economy develops, we need to move in tandem with its changing needs. One potential area is to facilitate the expansion of emerging Chinese companies into Southeast Asia by using Singapore as a regional HQ and for capital-raising. Another area to explore is for Singapore companies and Chinese companies to collaborate on joint investments to leverage on each other’s strengths. These could be investments in Singapore, China or a third country. We want to grow our economy by focusing not only on what is “made in Singapore” within our shores, but also what is “made by Singapore” through our companies locating part of their operations overseas while keeping their management control and key functions in Singapore. In an increasingly inter-connected world with advancements in technology and supply chain management, we must also embrace the concept of generating growth from what is “made with Singapore”, through our collaborations with others from different parts of the world.
11. Second, Singapore has done well because we have built a reputation over the years for being trustworthy and dependable. Singaporeans have a culture that is based on integrity and trustworthiness. Our system is clean and efficient, and we deliver what we promise. We uphold our contractual commitments and we respect intellectual property rights and the rule of law.
12. Trust takes time to build and can be quickly shattered if we let our guard down. We must continue to protect this hard-earned reputation through our collective actions and practices, so that our companies can benefit from the confidence that people have in our ability to consistently deliver top-quality products and services. Singapore’s trustworthiness allows our companies to have a competitive advantage and to command a premium in certain sectors, whether in financial services, high-end data centres or high-quality food and medical products.
13. When I was with the Ministry of Trade & Industry before joining politics, I visited one Singapore SME called SHE (Seng Heng Engineering). SHE is a family-owned company which specialises in high-quality nuts and bolts, especially for customers with operations in challenging environments such as offshore and deep-sea exploration. For these customers, the cost of nuts and bolts is a small fraction of their total project costs. However, if the nuts and bolts are not well-made, their subsequent failure can become the weak link and cause lots of downstream problems, like what happened to the BP oil rig in the Gulf of Mexico in 2010. Hence, these companies are willing to pay a premium for quality assurance, and this is how a Singapore manufacturer like SHE can carve a niche for itself in the global marketplace despite having higher costs than its competitors from China and India. Their value proposition is built on quality and trust.
14. Trust will remain a critical competitive advantage in the future digital economy. Consumers must trust the credibility of websites and merchants when they transact online. The public need to have assurance that their personal information will be protected when they use digital services. Without trust, the digital economy cannot take off. This is why Singapore is paying attention to developing capabilities in areas such as data protection and cybersecurity. These are key building blocks to support our drive towards becoming a Smart Nation.
15. Last but not least, Singapore has done well because we have invested in education and talent development over the years. We will continue to do so, including the drive to support lifelong learning through SkillsFuture. In a knowledge-based and skills-driven economy, Singaporeans need to constantly upgrade ourselves to develop relevant skills and deep expertise, so that we can secure good jobs and improve our standards of living. At the national level, having a skilled workforce is also essential to attracting new investments and supporting our companies’ growth.
16. This includes training programmes like the FC-ALP and other initiatives by Business China to prepare more Singaporeans to be China-ready, and expose them to new business opportunities in different parts of China. These are part of the Government’s efforts to help our people acquire international exposure and working experience, and support our companies when they expand overseas to China and other markets.
17. As we continue to invest in educating and developing our people, Singapore must remain connected to the world and be open to different sources of ideas and talent. We need to have the largeness of spirit to welcome and integrate international talent, especially in new sectors where we are still growing our local talent pool. Otherwise, we will not be able to successfully attract new investments and launch these sectors to create good jobs for Singaporeans.
18. Being open to international talent does not mean we dilute our focus on developing Singaporean talent. Some people like to argue in such a zero-sum manner to stir up emotions, even putting up flawed proposals that call for an abrupt and complete freeze on foreign worker numbers. If such proposals are implemented, they will cause even more hardship for our SMEs. In reality, the two objectives are not mutually exclusive, and can in fact reinforce each other. Ultimately, what we want is to strengthen Singapore to benefit Singaporeans.
19. We have to manage our population growth carefully. At the same time, we must not over-tighten the inflow of immigrants and foreign workers, and send the wrong signal that Singapore no longer welcomes talent. That will hurt us as it will lead to slower economic growth, fewer jobs and a less vibrant society. If we look at the US for example, a key reason for their ability to remain innovative and to bounce back from recession again and again, is their strength in attracting and integrating talent from around the world, including many from China, India, Europe and also Singapore. The majority of enterprises in Silicon Valley are started by people who are not born in the US. Of course, there is a possibility that the US may change its policy when a new President takes over. We will wait and see.
20. Being open to talent is a competitive advantage which the US has over China. The Chinese have a lot of capable people within China and they are trying to attract talent from abroad too, including overseas Chinese working in the US and Europe. However, compared to the US which started as an immigrant society that uses English as its lingua franca, it will be more difficult for China to attract international talent, especially non-Chinese talent.
21. Let me conclude my speech in Mandarin. 去年，新加坡和中国庆祝正式建交25周年。这些年来，两国政府的合作日益加强，并在重庆正式启动了第三个政府间合作项目；民间的交流也更加频密。所以，两国政府同意把双边关系提升为“与时俱进的全方位合作伙伴关系”。这一来，有助于双方更紧密的合作，互惠互利。