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China Daily Website

Singapore PM hails co-op with China

Updated: 2012-09-03 10:13
( Xinhua)

SINGAPORE -- The cooperation between Singapore and China makes both economies more resilient, especially in the context of the weakness of global economy, Singapore Prime Minister Lee Hsien Loong said.

Speaking in a recent interview with Chinese media ahead of his official visit to China, Lee said he expected the pattern of the bilateral economic cooperation, which has been supported largely by the complementary nature of the two economies, to change in the future as both upgrade their economies.

Pattern of economic cooperation

Lee said China is upgrading itself and doing more sophisticated activities, not just labor-intensive manufacturing, but high-skilled technology-intensive manufacturing and some of the services where Singapore and other more developed economies have had a strength.

"It's a way the international division of labor works. When one country moves up, the other have to develop new skills to complement the new players so that we can continue to make a living for ourselves," he said.

The cooperation between China and Singapore have been expanding fast over the past decades, especially since the establishment of official diplomatic ties in 1990. Bilateral trade grew by 11.2 percent year on year to $63.5 billion in 2011, according to Chinese official statisitcs. The bilateral trade in the first half of this year totalled $32 billion, growing by 1.3 percent despite the challenging environment.

Singapore is the fourth largest foreign investor for the Chinese mainland, with $6.33 billion of new investment made in 2011.

Many Singapore companies, including the home-grown banks, developers, logistics firms and consumer brands, are expanding their operations in the Chinese mainland market. Some of them are involved in the flagship bilateral cooperation projects -- from the Suzhou Industrial Park in the 1990s to the recent major projects such as the Tianjin Eco-City and the parks in Guangzhou, Nanjing, Jilin, Chengdu, Xi'an and Henan.

Many Chinese companies are using Singapore as a platform to tap the Southeast Asian market, with Chinese investment in Singapore growing by 52 percent year on year to $1.07 billion in 2011.

Lee said Singapore is moving forward, too, and does not want to remain where it is.

"I see ourselves developing more capabilities and we hope these will also be capabilities which will have a market in China and which will complement what China's doing. There will always be rooms for different economies to do different things. It's a very big world," he said.

Asian economies ought to work together

Lee said that countries should be prepared for a very weak recovery in the United States, and that the problems in Europe are deep-seated.

"They (the European problems) are structural. They are political. They will not be easily overcome. It's not a cyclical downturn which will recover given so many weeks, so many months or one or two years," he said.

Asia is the brighter spot in the global economy and Asian economies ought to work together to keep the vitality and vibrancy so as to make up for the absence of demand in the developed west, Lee said.

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