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Singapore - China Relations

Singapore enjoys longstanding and substantive relations with the People’s Republic of China (PRC), anchored by frequent high-level exchanges, multifaceted cooperation, growing people-to-people exchanges, and robust economic ties. In 2015, Singapore and China celebrated the 25th anniversary of the establishment of diplomatic relations and released a Joint Statement that characterised bilateral relations as an “All-Round Cooperative Partnership Progressing with the Times”. Singapore and China celebrated the 30th anniversary of the establishment of our diplomatic relations in 2020. And in 2022, China decided to upgrade the relationship between the two countries from the all-round friendly cooperative partnership originally finalized in 2015 to an all-round high-quality forward-looking partnership.

President Xi Jinping and Prime Minister Lee Hsien Loong jointly announced to upgrade China-Singapore relations to an all-round high-quality future-oriented partnership. Bilateral cooperation in various fields has made great progress, continuously showing better performance, new vigor and new vitality. Looking ahead, China stands ready to work with Singapore to follow the strategic guidance of the leaders of the two countries, view bilateral relations from regional and global perspectives, grasp the positioning of being "all-round", "high-quality", and "future-oriented", uphold high-level strategic mutual trust, and promote high-quality and mutually beneficial cooperation, so as to better benefit the two peoples and make greater contributions to regional stability and prosperity.

December 6, 2023, Premier Li Qiang of the State Council met with visiting Deputy Prime Minister and Minister for Finance of Singapore Lawrence Wong at the Great Hall of the People. Li Qiang pointed out that China is willing to maintain close high-level exchanges with Singapore, deepen the alignment of development strategies, and take the opportunity of further upgrading the free trade agreement to promote the upgrading of China-Singapore cooperation, achieve more results in digital economy, green development, financial services, ocean energy utilization and other fields, advance the building of the New International Land-Sea Trade Corridor, strengthen people-to-people and cultural exchanges, and continue to take the lead in high-quality Belt and Road cooperation. China is ready to work with Singapore and other regional countries to strengthen solidarity and cooperation, accelerate negotiations on Version 3.0 China-ASEAN Free Trade Area, and continuously inject new impetus into regional integration.

Lawrence Wong said that under the guidance of the leaders of the two countries, Singapore-China relations have witnessed sound momentum of development. Singapore attaches great importance to its relations with China, and is willing to work with China to enhance high-level exchanges, make in-depth progress in practical cooperation in such fields as economy and trade, investment, green development and digital economy, and play a positive role in safeguarding regional peace, stability and development, so as to promote the continuous development of the all-round high-quality future-oriented partnership between Singapore and China.

Minister for Foreign Affairs Dr Vivian Balakrishnan During the Committee of Supply Debate 01 March 2021 stated: "With China, we share a deep, historical, cultural, and linguistic legacy. We have a wide-ranging and important relationship. ... China remains our largest trading partner and we are, surprisingly, their largest foreign investor. We have three Government-to-Government projects, the Suzhou Industrial Park, the Tianjin Eco City, and Chongqing Connectivity Initiative and all these have made commendable progress over the years. And you would know that DPM Heng has co-chaired the Joint Council for Bilateral Cooperation (JCBC). Despite the pandemic, we have kept up the pace of cooperation and engagements with China. We have sent medical equipment and supplies to each other at crucial stages of the crisis. For operational reasons, I cannot go into details. But let me reassure you that when the chips were down on either side, fortunately at different times, we stepped up and we helped, and that is how we built trust. That is how you prove that you are a reliable partner: when the crisis breaks out, and the chips are down. Therefore, you should not be surprised that China was also the first country with which we established a Reciprocal Green Lane, both because we were able to control the pandemic domestically, but also because of the large reservoir of trust. Politburo Member Yang Jiechi visited Singapore last August, and I also met State Councillor and Foreign Minister Wang Yi during his transit in Singapore in October. And needless to say, I have been on the phone with him several times in the last year. Going forward, we will continue to strengthen existing collaboration, with Singapore plugged into China’s dual-circulation strategy, and we will look for new opportunities and break new ground."

Since 2013, China has been Singapore’s largest trading partner, and Singapore has been China’s largest foreign investor. Following PRC President Xi Jinping’s State Visit to Singapore in 2015, both sides agreed to launch negotiations to upgrade the China-Singapore Free Trade Agreement (CSFTA) which had entered into force on 1 January 2009. The upgrade of the CSFTA was concluded in November 2018 and the signing of the CSFTA Upgrade Protocol was witnessed by PM Lee Hsien Loong and Premier Li Keqiang during the latter’s Official Visit to Singapore in conjunction with the 33rd ASEAN Summit and Related Summits. It comprised a meaningful and substantive package in terms of market access for Singapore’s export of goods and services into China, and provided greater transparency and predictability for business activities between the companies from Singapore and China.

Singapore and China have established three Government-to-Government projects, namely (a) the China-Singapore Suzhou Industrial Park; (b) the Sino-Singapore Tianjin Eco-City; and (c) the China-Singapore (Chongqing) Demonstrative Initiative on Strategic Connectivity. We have also established a state-level bilateral level cooperation project, the China-Singapore Guangzhou Knowledge City and several private sector-led, government-supported projects such as the Singapore-Sichuan Hi-Tech Innovation Park, the Nanjing Eco High-Tech Island, and the Jilin Food Zone. In addition, we also launched the Singapore-China (Shenzhen) Smart City Initiative. At the provincial level, we have eight provincial business and economic councils with Sichuan, Shandong, Liaoning, Zhejiang, Tianjin, Guangdong, Jiangsu and Shanghai. Since the mid-1990s, more than 50,000 Chinese officials have come to Singapore for various study visits and training programs.

Despite the challenges brought about by COVID-19, both sides have maintained close bilateral cooperation. Singapore and China launched a fast lane in early June 2020 to allow for essential business and official travel with six Chinese provinces/municipalities. This fast lane was Singapore’s first with another partner, and China’s first with a Southeast Asian country.

In Southeast Asia, China is pursuing closer ties with ASEAN to demonstrate that China's peaceful development is in the region's interests and to counter the "China threat" argument. China views ASEAN as part of its "strategic backyard" and an important source of energy imports. China is using its closer economic ties with ASEAN (both through greater trade and foreign direct investment) to gain greater regional influence. Underlying problems still exist in China's ties with the region and China is willing to engage in "hardball" tactics when it deems it necessary. This was evident when China engaged in "tit-for-tat" retaliations against other countries after they raised concerns about the safety of China's exports of food and other products. Land and maritime boundary disputes still exist and can flare up from time to time, such as with Vietnam.

Singapore's response is marked by both engagement and hedging, with perhaps greater emphasis on the latter. Singapore seeks to engage China both politically and economically, and has sought to leverage its linguistic and cultural links to gain advantage in trade and investment with the Mainland. Singapore has established several industrial zones in China and offers extensive training in public administration to local and provincial Chinese officials. Singapore signed a Free Trade Agreement with China in October 2008. Political relations with China have improved over the years following a low point in 2004, when Prime Minister Lee Hsien Loong (then Deputy PM) angered China by making an official visit to Taiwan. Singapore officials do not consider China an existential threat to Singapore at present but worry that it will increasingly assert its interests in Southeast Asia, a region of relatively small and weak states.

Founding father Lee Kuan Yew (LKY) said the "Finlandization" of Southeast Asia is already underway (apparently in reference to Laos, Cambodia and Burma.). Singapore officials constantly speak of the need for the United States to remain fully engaged in Asia in order to maintain a healthy strategic balance, and for the United States to remain constructively engaged with China, in order to ensure it learns to behave according to international norms. LKY has spoken of a "worst case scenario" in which rising protectionism in the West leads China to "give up" on its integration into the international order, with unpredictable consequences for regional peace and security.

China looms far larger in the Singapore consciousness than it did ten or twenty years ago. Three-quarters of Singapore's population of 4.5 million are ethnic Chinese, and there is growing pride here in China's accomplishments. Singapore's strategically minded leadership and think tanks put considerable thought and energy into understanding the implications of China's emergence. Even so, Singapore is geographically relatively far from Mainland China and there has been considerable cultural drift, even among ethnic Chinese. For example, there was little detectable Beijing Olympics fever in Singapore. Singapore's trade dependence, wealth, and strong historical, educational, and business links with the West help serve as a counterweight to China's appeal.

Singapore's strategic-minded political leadership remains by far the country's most influential "interest group," from which think tanks, businesses and the media tend to take their cue. Singapore businesses, including government-linked companies like Temasek Holdings and sovereign wealth fund Government of Singapore Investment Corporation (GIC), have substantial holdings in China. Business has been supportive of close economic links to China, both to take advantage of commercial and investment opportunities and to diversify away from dependence on trade with the West. Increasing numbers of Mainland Chinese are taking advantage of both Singapore's dependence on unskilled foreign workers and its liberal policies toward immigration of skilled professionals. Various sources estimate that between 300,000 - 400,000 Chinese nationals live, study and work in Singapore, out of roughly one million foreign workers and permanent residents. Attitudes of native Singaporeans toward unskilled Mainland Chinese workers appears relatively negative, compared to those toward other foreign worker populations. It does not appear Chinese nationals in Singapore have a significant influence on policy.

Bilateral trade has grown substantially in recent years. However, Singapore does not appear to have changed any of its economic policies specifically due to Chinese influence. Singapore does not purchase Chinese-made military hardware. It values its close strategic partnership with the United States as the ultimate guarantor of its security, and seeks to maximize interoperability with U.S. forces by purchasing most of its military equipment from the United States (e.g., F-15s). As a tiny, ethnic Chinese outpost in a complex region, Singapore seeks positive ties with all its neighbors and promotes ASEAN integration as a means to partially offset the growing influence of China and India. At the same time, it is mindful of the need to remain in the good graces of the region's large powers, including China. Singapore has on occasion received Chinese diplomatic support, such as when Singapore received China's support when competing with Malaysia and Indonesia in 2006 to locate the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) Information Center in Singapore. Singapore is not inclined to defer to China as a matter of course on policy matters, though it would likely weigh carefully, and perhaps avoid, taking an opposing position on a matter of importance to China.

Singapore seeks to take advantage of investment and trade opportunities with China, building on close cultural ties. Business and the government have made it a priority to diversify Singapore's economy and its export markets and see China's growing domestic market as a balance to its dependence on exports to the United States, the European Union and Japan. Singapore and China signed a bilateral Free Trade Agreement in October 2008. The agreement will allow Singapore business greater access to China's market (Singapore already has few or no tariffs on most goods, so there are fewer economic benefits to China from the FTA). Observere speculate that the FTA is "a reward" to Singapore for its support of China's Tianjin Eco-City project and its assistance in response to the Chengdu earthquake. The FTA is also viewed as a clear signal that Singapore is back in China's good graces after the strains caused by PM Lee's 2004 visit to Taiwan. More broadly, Singapore believes that building strong economic and political linkages with China is crucial to ensuring that China stays on a path of international engagement, which is key to ensuring the region's continuing peace, stability and prosperity.

Singapore expects China's economic, political and military power to grow relative to Southeast Asia (including Singapore) and the United States, although Singapore does not expect the U.S. to "stand still," but rather continue to grow as well. Singapore officials appear to view this trend as inevitable and not necessarily a cause for alarm, provided the United States remains strongly engaged economically, militarily and politically in Asia. Senior officials have warned that rising protectionism in the West would ultimately weaken the United States and might cause China to give up on its current development model, with potentially catastrophic results for the region. At the same time, China must guard against hubris, as it will take several decades to develop the Chinese hinterland and before Chinese workers are fully competitive with those in Japan and the West.

Singapore's leadership appears united in believing China is currently preoccupied with developing its economy and addressing internal problems. Thus it is unlikely to be expansionist and is not interested in imposing its political values on others. Singapore appears to believe that China's leaders value its currently positive relationship with the United States and will continue to do so as long as it provides China economic and political benefits. Singapore believes careful U.S. "management" of and engagement with China is critical to its healthy emergence.

At the same time, Singapore leaders, routinely express concern that several countries in mainland Southeast Asia (Burma, Laos, Cambodia and to a lesser extent, Thailand) are starting to gravitate toward to China. Singapore officials express concern that China is increasingly assertive in pursuing its interests and ensuring its access to needed resources. On the economic side, it is apparent to most Singaporeans that China's wealth and economic power are on the rise and that Chinese companies will one day have a greater presence in Singapore.

Singapore's strong sense of vulnerability lead it to pursue a foreign policy of seeking good relations with all players. It seeks a healthy balance among the major powers in Asia. Above all, it seeks a continued strong U.S. economic, military and political presence as the ultimate guarantor of the region's, and its own, security and prosperity.

Singapore officials constantly say that U.S. strategic engagement in East Asia is of critical importance to the region's peace and stability. They continue to express concern that the United States is preoccupied elsewhere and not paying sufficient attention to Asia. And they worry that rising protectionism in the West could cause China to turn inward, with unpredictable consequences. While Singapore officials have not expressed it openly, it is likely they would see a U.S. withdrawal as potentially an existential threat to Singapore, given its tiny size and potentially hostile neighborhood.