Diplomacy Weekend

By Jiang Gongying and Li Zhiliang



Diplomacy Weekend

By Jiang Gongying and Li Zhiliang

On November 6， 2015， President Xi Jinping arrived in Singapore for a two-day State visit， his first visit to Singapore since assuming the President's office in 2013. This visit is also part of the commemoration of the 25th anniversary of the establishment of Sino-Singaporean diplomatic relations. During his visit， Xi also met with Ma Ying-jeou， the leader of Taiwan， drawing the attention of the Chinese and international media.

Te media hailed Xi's visit as “a diplomacy weekend” for Singapore. Singapore not only showed the world its concept featuring “small state， big diplomacy”， but also displayed its special role for China.

New Era for Industrial Park Cooperation

During President Xi's visit， both sides agreed that Southwest China's Chongqing municipality will be the venue for their third inter-governmental cooperation project. Unlike the Suzhou Industrial Park and the Tianjin Eco-city， this cooperation will focus on construction of “strategic interoperability”，which includes the use of the latest science and technology ideas to help develop fnancial services， aviation， transportation and logistics，information and communications industry. Tat shows that Singapore will help China in the development of the new economy with more intensive intellectual knowledge， technology， talent and experience. Tis new round of cooperation will provide both countries with more business opportunities， but also guide the direction of future bilateral cooperation.

President Xi's visit in November was preceded by much preparation on both sides. Afer a lapse of 21 years since the establishment of the Suzhou Industrial Park in 1994， China's State Council approved of it as China's first open innovation comprehensive experimental zone， which will assist Chinese businesses to go global while doing a better job with regard to the use of foreign capital， science and technology， and personnel.

China and Singapore held the 17th Session of the Joint Coordination Council for China-Singapore Suzhou Industrial Park on October 13 to discuss the new role. Today， when market competition gains momentum with each passing day， both parties are determined to make the Suzhou Industrial Park different from other development zones and the free trade zones and remain in the forefront of economic development.

According to the State Council decision，the Suzhou Industrial Park will seek to become the world leading high-tech industry park， enhancing the level of international cooperation

Achievements made by China and Singapore during President Xi Jinping‘s recent visit show that the island republic is a very good cooperative partner of China in its multi-faceted diplomacy. All the signs suggest the two countries will enjoy an increasingly better cooperative future. to meet its development goals. Meanwhile， it will make eforts to develop fve platforms - a higher level of open cooperation demonstration platform， industry upgrading demonstration platform， international innovation driven demonstration platform， administrative system reform demonstration platform， and integrated urban management platform.

Chinese Vice Premier Zhang Gaoli and Singaporean Deputy Prime Minister Teo Chee Hean jointly chaired the 12th Meeting of China-Singapore Joint Council for Bilateral Cooperation （JCBC）， the 17th Suzhou Industrial Park Joint Steering Council Meeting and the 8th Meeting of the Tianjin Eco-city Joint Coordination Council.

Trough discussions， the two sides basically decided on the choice of site for their third inter-governmental cooperation project. In February， 2014， Chan Chun Sing， the Prime Minister's Office Minister of Singapore， led a delegation of the project's ministerial joint committee to visit Chongqing， Chengdu and Xi'an， candidate cities of the third project. Te Singapore-China Commission discussed the third inter-government coordination project under the prospect of “modern interoperability and modern service industry”. It soon became clear that Chongqing was taking the lead.

According to an analysis， potential investors are most interested in candidate cities in terms of logistics，tourism and other modern services. This compares sharply to the past situation in which investment was made mainly in the manufacturing sector in coastal area in Eastern China due to convenient access and advanced economy.

When considering the site for the new cooperation project ， Chua Kee Seng，President of the Singapore Chinese Chamber of Commerce， believed both Chongqing and Chengdu ofered a mature foundation in terms of commercial facilities while Singaporean businessmen were familiar with the two cities. Therefore， he thought， either would be satisfactory. On the Chinese side， Chongqing was preferred.

Chongqing is a municipality directly under the Chinese Government and also a city known for its good business atmosphere. Its choice as the inter-governmental cooperation site promises more efciency in economic and trade cooperation in the future.

Innovation Leads Cooperation

Singapore and China have comprehensively upgraded their cooperation mode with a new concept of cooperation and work methods，which finds expression in undertaking cooperative parks， inter-governmental projects，choice of cooperation site， and industrial areas open for cooperation.

The 12th Meeting of China-Singapore Joint Council for Bilateral Cooperation （JCBC）held recently discussed topics including economic restructuring， financial cooperation， civil exchanges， as well as inclusive and sustainable development and other issues. In financial cooperation， both countries agreed to further expand cross-border RMB business pilot projects.

Pilot cross-border RMB businesses will be extended to Suzhou and Tianjin. Singapore banking institutions will in the future issue cross-border RMB loans to businesses of the two cities and businesses of the two countries can float RMB denominated bonds in Singapore. Capital thus harvested from that can be fully remitted to China. More fexibility in this regard will encourage more Suzhou and Tianjin businesses to get involved in fnancing in Singapore in the future.

Businesses in the Suzhou Industrial Park are allowed to borrow from local companies. At the same time， efforts are being made to go global through Singapore. They are also encouraged to set up financial centers in Singapore. With regard to Tianjin Eco-city，some private banks are encouraged to establish business ties with banks in Singapore through loan activities. According to the new measures，banks are able to support businesses which could not have access to ofshore fnancing in the past.

With regard to the projects in Chingqing under the third inter-governmental cooperation agreement between Singapore and China，both sides will cooperate in fnancing， aviation，logistics， and information communication technology. With regard to the upgraded version of the free trade agreement， the two sides promised to improve the investment under the FTA， and the two sides also signed a memorandum of understanding and agreement on culture， education and training， environmental protection， and trade.

China began to establish special economic zones， development areas and industrial parks in the 1980s， and has since been exploring and trying diferent development models and cooperation projects. In 1994， China and Singaporeestablished their first inter-governmental cooperation projects - Suzhou Industrial Park. It is a success story in bilateral cooperation，but also faces the need for improvement. Tis points up to the need for eforts to probe fresh cooperation paths.

On May 27， 2015， to mark the 17th anniversary of the construction of the Suzhou Industrial Park， a ceremony was held for the signing of agreements for 29 projects involving a total investment of 40 billion yuan （$6.25billion）. These projects are expected to help economic restructuring， industrial upgrading and urban function improvement of the Park.

Singapore's Special Role

In the field of economic development，Singapore will continue to participate in China's economic restructuring plan to help achieve interoperability of infrastructure. In the feld of diplomacy， Singapore will continue to actively particpate in China's Maritime Silk Road Initiative and the construction of the Asian Infrastructure Investment Bank.

During President Xi's visit to Singapore，the Bank of China （BOC） set up a Global Commodity Repurchase Center and a Global Energy Commodity Business Center in Singapore to provide bulk commodity businesses with financial services and solutions using Singaporean expertise as an international fnancial center.

As Singapore has become the center of the RMB offshore trading in the ASEAN region，BOC's recent move will certainly encourage Chinese companies to invest in Singapore and expand their overseas businesses， which is considered as an economic bonus for ASEAN and also conforms to the long-term goal of China's Maritime Silk Road Initiative. In this regard， Singapore has played an irreplaceable role in ASEAN. Other ASEAN countries need to work on how to make use of the new role of Singapore in their cooperation with China.

With regard to the cross-straits relations between the mainland and Taiwan， Singapore has played an historic and unique role. The November 6 Xi-Ma meeting shows that Singapore is still pursuing the late Lee Kuan Yew's long-term policy. From the event， the world sees Singapore's concern and unique infuence on the Chinese side.

Indeed， Singapore still has a special role to play in bilateral economic development，foreign policy and the cross-straits relations between the mainland and Taiwan. Fruits harvested during President Xi Jinping's visit also demonstrates that Singapore is China's multi-directional and unusual cooperative partner of China and the relationship will develop further in the future.

About the authors:

Jiang Gongying is a research fellow of the Anbound Consulting.

Li Zhiliang is a research fellow of Malaysia Research Center of the Anbound Consulting.