Chinese Vice Premier Zhang Gaoli, who is in Singapore on Tuesday to co-chair the 12th meeting of China-Singapore Joint Council for Bilateral Cooperation, has agreed with Singapore Deputy Prime Minister Teo Chee Hean that the third government-to-government (G2G) project will be a strategic program, which covers China's western region to promote economic and social development. This is the latest development of the much-anticipated G2G project between the two countries.
One of a major topic during this meeting is "modern inter-connectivity and modern services," which shows that after the previous two successful collaborations, both sides will eye a brand-new area to further promote bilateral ties.
From the epoch-making Suzhou Industrial Park 21 years ago, to the first G2G eco-city the Tianjin Eco-city, and finally the third bilateral project which fits in China's national strategies, such as the Belt and Road Initiative and Western Region Development drive, China and Singapore has always been the flagship in bilateral cooperation among ASEAN.
The lion city, which covers an area of over 500 square kilometers, is known as the "Little Red Dot". Despite the tiny body, its blessed geography, which is adjacent to the Malacca Strait, has enabled the city-state as a financial, trade and logistics hub and plays an important role in Sino-ASEAN relationship.
Economic cooperation between China and Singapore has always been a propeller of bilateral relations in this region. China and Singapore signed the China-Singapore Free Trade Agreement in 2008, paving way for the official completion of China-ASEAN free trade zone two years later.
Now with the soaring trade exchanges, China, Singapore and ASEAN are looking forward to an upgrade in current cross-border economic cooperation. One of the reasons that Singapore stands out from ASEAN countries, becoming the pioneer in bilateral collaboration with China, is that both countries share same cultural roots, according to Koh Chin Yee, CEO of Longus Research Institute.
"Being a predominantly ethnic Chinese society, Singapore shares the same cultural roots with China. China therefore sees the Singapore story as something that she can draw reference from. Coupled with excellent relationships not only between the top leaders, but across different hierarchies and segments, of both countries, bilateral relations soars," Koh told Xinhua.
Another prerequisite is that China and Singapore complements each other in economic development, Koh pointed out. "A very important point to note is that the further opening up of China since her WTO accession and her subsequent industrialization and urbanization happens at a time when Singapore is rapidly building her external economic wing," he said. "China offers opportunities that Singapore needs, and Singapore investors and Professionals, Managers & Executives (PMEs) offer capital, skills, knowledge and connections to the international world that China requires. This perfect match certainly helps grow bilateral collaboration."
According to statistics from China-ASEAN Business Council, total trade between China and ASEAN soared to a new record high of 480.4 billion U.S. dollars last year, up 8.3 percent a year ago. Data from China's customs shows that in 2014, bilateral trade between the China and Singapore rose 5 percent to reach 79.7 billion U.S. dollars, accounting for 17 percent of the total trade between China and ASEAN.
Apart from cultural and economic roots, Singapore government and enterprises are highly sensitive to new trends in China, which has also made the city-state a forerunner to enhance bilateral cooperation. A simple example would be the construction of off- shore RMB market. With the increase of overseas trade and the further opening-up of the financial market, the Chinese government has been pushing forward the internationalization of yuan, and Singapore is one of the earliest markets to seize the opportunity.
As a global financial center, Singapore has initiated cross- border yuan trade settlement in 2009. In 2013, banking giant Industrial and Commercial Bank of China (ICBC) kicked off its yuan clearing services in Singapore, marking a milestone in Singapore's development as an off-shore yuan hub. And in just one year, Singapore has surpassed London to become the second largest renminbi off-shore center in the world.
According to data from People's Bank of China, the country's central bank, ICBC Singapore has recorded a clearing volume of 47. 1 trillion yuan (about 7.43 billion U.S. dollars) in the first three quarters of 2015, an increase of nearly 97.1 percent from the same period last year.
Singapore has also been a positive advocate for the China-led " Belt and Road" initiative as well as the Asian Infrastructure Investment Bank (AIIB). As the most economically advanced country in the Southeast Asian region, Singapore is a vital connection hub for China, Asia and Asia Pacific markets, and is ranked as the country with the highest investment value out of 64 countries included in the "Belt and Road" initiative, according to a country investment value report issued in March 2015 by Grand View, an independent Think- Tank of China.
Therefore, this third G2G project, with distinctive features on geographical scope, planning concepts and cooperation models, will again be forward-looking and pace-setting. With the industrial and economic transition in China, both countries have expanded their collaboration scope from hardware to software, from trade to environmental protection, technology, education and science. Even within the current G2G projects, the two sides are working hard. During Zhang's visit, a Memorandum of Understanding on four joint collaborative projects within in the Tianjin Eco-city have been signed, including a demonstration city for water resources management, smart city development, green building demonstration base as well as a garden project. With further clarification on the third G2G project in the near future, China and Singapore will make another iconic cooperation pattern for countries in the region.
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