Singapore Says It Can Play Key Role in China’s ‘Dual Circulation’ Economy

(The Straits Times) — Singapore can play a key role in the external part of China’s new “dual circulation” economic strategy, and can be a base for Chinese companies looking to expand into Southeast Asia, given the island-state’s strong trade and logistic links to China.

China’s dual circulation strategy is aimed at spurring domestic consumption and self-reliance while at the same time encouraging foreign investment and catering to export markets.

As a key regional financial hub, Singapore is also able to support China’s opening up of its financial and capital markets, said Foreign Minister Vivian Balakrishnan in an interview with the official Xinhua News Agency ahead of his visit to Wuyishan in Fujian province in eastern China.

Singapore has been China’s largest foreign investor over the past seven years, and Singapore companies can continue to tap the large Chinese market in areas where its expertise best matches the needs of China’s domestic economy, said Balakrishnan in the interview published on March 30.

The Singapore foreign minister will meet and be hosted to a meal by his Chinese counterpart, Wang Yi, on Wednesday.

“We are well positioned to serve as a gateway for Chinese investors to access ASEAN markets and opportunities, as well as a key node to channel investments into China from the rest of the world,” he said, adding that a quarter of all Chinese outward investments to Belt and Road countries flowed through Singapore.

Despite the pandemic, China and ASEAN have also continued their economic cooperation and are working on upgrading their free trade agreement so that it “remains ‘fit for purpose’ in a post-pandemic world,” said Balakrishnan.

Chinese data shows that ASEAN has become its largest trading partner last year.

The updated FTA will include new priorities stemming from the Covid outbreak, such as the digital economy, public health and the reduction of non-tariff measures, he said.

ASEAN also signed the Regional Comprehensive Economic Partnership (RCEP) last November with China, Australia, New Zealand, Japan and South Korea, a trade bloc that is the biggest in the world, accounting for 30% of global GDP.

“When RCEP comes into force, it will send a strong signal that our region remains committed to free and open trade. At the same time, the door remains open for other like-minded partners to join us,” he said.

Balakrishnan and Wang are expected to pick up from last December’s Joint Council for Bilateral Cooperation meeting and discuss progress on the agreements made.

As many as 10 deals, ranging from food safety to the environment, were inked at this apex meeting between the two countries. Both sides also agreed to work together in new areas such as public health.

The two foreign ministers are also expected to discuss the resumption of cross-border travel as both countries have successfully managed the Covid-19 outbreak and have begun rolling out a vaccination program for their populations.

Balakrishnan said Singapore welcomes China’s recent proposal on the mutual recognition of health certificates, adding that it was important to get started early to make sure the systems are interoperable.

The foreign ministers of Malaysia, Indonesia and the Philippines will also be visiting Fujian and meeting Wang over the next few days.

This article was originally published by The Straits Times

Contact editor Yang Ge (geyang@caixin.com)

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