SHANGHAI: The global trading system is under stress from protectionism and unilateralism, which will continue to grow unless countries can manage their domestic situations, said Singapore’s Trade and Industry Minister Chan Chun Sing during the Singapore-China Trade and Investment Forum in Shanghai on Tuesday (Nov 6).
Countries must be able to “make adjustments” and distribute gains from economic integration, in order to avoid “a global backlash” that could disrupt global supply chains and undermine growth, he said.
In light of the challenges facing the international trading system, Mr Chan said Singapore and China have “every reason” to work together to uphold an open, fair trading system.
He added that World Trade Organization (WTO) rules must also evolve to address new market trends.
BELT AND ROAD RISK CAN BE MINIMISED: CHAN CHUN SING
Mr Chan was in Shanghai to attend the first China International Import Expo.
During his three-day visit, he also met the Singapore business community in Shanghai and visited Singapore companies at the expo.
He noted that Singapore has continuously supported China’s integration with the rest of the world.
As China reaches a new stage of development, with its outward investment outstripping foreign direct investment, Mr Wong said there are new opportunities for Singapore companies.
One such opportunity is in providing financial and legal advisory services to support Belt and Road projects.
“One third of China’s Belt and Road outward investment goes through Singapore. Why does it go through Singapore? Because of a few very simple reasons. We combine the financial prowess and resources of China with the niche capabilities of Singapore,” he said.
“The niche capabilities of Singapore include our ability to syndicate loans, syndicate complex infrastructure projects for the long term, to use a legal system where it’s trusted by all parties.”
When asked about potential financial or reputational risk to Singapore, given that some Belt and Road projects have run into problems, Mr Chan said this risk can be minimised by evaluating projects according to market principles, maintaining market discipline, and through careful implementation.
OPPORTUNITIES FOR SINGAPORE COMPANIES IN CHINA
Speaking to reporters at the end of his visit to Shanghai, Mr Chan urged Singapore companies to explore opportunities in China beyond the developed coastal provinces.
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He said both countries hope to promote more collaboration among businesses, including attracting Chinese companies to use the Singapore as a base in Southeast Asia, and working together to explore third-party markets.
“We encourage the Singapore companies to come to China, to explore the opportunities not just at the coastal provinces, but also some of the non-coastal provinces like in the western region or in the central region,” said Mr Chan, adding that China is a big market, with “a lot of opportunities for Singapore companies at different tiers of the market and different tiers of development”.
During his visit, Singapore and China also concluded talks to upgrade a free trade agreement between the two countries.
Elaborating on areas of further cooperation between Singapore and China, he said both sides can look into how to use the China-Singapore Free Trade Agreement, and tariff barriers and non-tariff barriers can be lowered.
He added: “Then there are also other issues like the mutual recognition of each other’s standards. For example, in the field of professional services, it’s very useful for both countries to have this mutual recognition of each other’s standards, and how we can better integrate our system of customs clearance.”
LARGER TREND IS IN GREATER GLOBAL INTEGRATION
Mr Chan also noted that Chinese President Xi Jinping made a significant speech at the opening of the Expo on Monday, where he pledged to continue to open up the Chinese market to the rest of the world.
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“In my conversation with the Chinese leaders, I think they are very clear, that going forward the world can only get more integrated and not less. And the larger mega trend is that in any production of any complex product, it will be a global production chain, global supply chain and it is in our common interest for every one of us to work together to better integrate that global production chain,” he said.
“If we can do that, actually it will bring more benefits to all of us. Not just the Chinese companies, but also the Singapore and international companies. I think they are very clear that this is what they need to do. So not withstanding any temporal hiccups here and there, I think the larger trend is in the correct direction.”
While in Shanghai, Mr Chan also officiated opening ceremonies for Singapore companies Mapletree and UOB, and witnessed several Memorandum of Understanding signings between Singaporean and Chinese entities.