His Excellency Zhong Shan, 
Minister of Commerce of the People’s Republic of China

Distinguished Guests,

Ladies and Gentlemen, 

Good Afternoon.

Introduction

1. I would like to thank the PRC Ministry of Commerce for inviting Singapore to speak at this Trade Connectivity Thematic Forum.  

2. As the Belt and Road Initiative (BRI) progresses, it is timely to take stock of how the BRI can contribute to greater global trade and investment flows. 

3. The forms and flows of global trade are undergoing rapid transformation caused by technological disruptions, new business models, new production models, shifts in global supply chains and a growing demand in Asia.

4. These changes bring forth both opportunities and challenges. Governments have to ensure that the regulatory environment, support systems for business transformation and workers’ training are all in-synch for trade and investments to grow healthily.

Shared prosperity in the global trade architecture 

5. An inclusive, open and rules-based trade architecture has been the bedrock of our economic development and success in the past few decades, lifting millions out of poverty and growing a substantial middle income class. We have a shared interest to uphold this system that has brought us prosperity and progress all these years. 

6. I suggest we consider upholding the following principles as we navigate the fast-changing landscape:  

7. First, work towards greater economic integration and resist fragmentation. 

8. Integration allows all of us to leverage on our respective comparative advantages for collective benefits. Fragmentation will instead constrain and sub-optimise everyone’s potential, leading to nett loss of potential benefits for our people and economy. Governments must resist the rise of anti-globalisation and nativism. 

9. To promote greater trade and investment flows along the improved infrastructure provided for by the BRI, countries must promote the free flow of goods, capital and talent.  Efforts such as China’s new Foreign Investment Law and the China International Import Expo (CIIE) demonstrate steps in the right direction.  

10. There are also regional initiatives to further liberalise and integrate markets. These include the Comprehensive and Progressive Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership. These will create a conducive environment that will bolster greater economic exchanges amongst the partner countries. 

11. Second, we need to update and uphold global trade rules.

12. Market discipline should remain a key cornerstone of economic policies.  Governments should not distort market demand and supply by dictating how others should compete in their domestic or international markets.  

13. The rules-based multilateral trading system, embodied by the WTO, must evolve to keep pace with the changed realities of the global economic system.  Reform of the WTO is timely and necessary. We must update rules, particularly in the area of digital economy, to meet the needs of the modern economy. For example, the WTO Joint Statement Initiative on E-Commerce (JSI), which comprises 77 WTO Members, including China, have committed to negotiations to develop multilateral rules aimed to help companies navigate the complex e-commerce landscape. 

14. Third, we should help domestic business and workers adjust to boost their competitiveness rather than resist changes that are inevitable and necessary. 

15. We must enable our businesses and workers to ride the waves of change as we push for greater trade integration. It is unrealistic to protect domestic businesses and jobs by isolating our economies from the fast evolving global markets.  Doing so will broaden the technological and competitive gaps, which only serves to delay the challenge of today and make any future catch-up more painful. Failure of domestic policies to help businesses and workers adapt will create local backlash with global negative consequences. 

16. The long term competitiveness of a country is ultimately determined by its education, training and innovation. In the long term, government policies to manage industrial production and trade flows artificially are neither sustainable nor effective in promoting trade and investments

17. To stay competitive, countries will need to allocate more resources to education, skills upgrading, research and development, as well as maintaining a pro-business environment.  

How can the BRI contribute to global trade? 

18. The BRI should continue to be an open platform through which trade and investments can flow freely and seamlessly. The BRI has focused on hard infrastructure connectivity in the first five years. As partners of the BRI, we must enhance it with the softer aspects of trade connectivity such as data, talent, technology and finance.  

19. First, we have to leverage comparative advantages, seek synergy through network effect and achieve mutually-beneficial outcome. As more partners join and contribute to the network, the greater the connectivity and the lower the cost.  

20. For example, the China-Singapore (Chongqing) Connectivity Initiative – New International Land-Sea Trade Corridor (CCI-ILSTC) connects the “Belt” with the “Road”, providing a direct and shorter trade route from Western China to Southeast Asia. As an open and inclusive network, the CCI-ILSTC has evolved from promoting point-to-point connectivity to region-to-region connectivity.  It has also effectively cut the shipping time between the two regions by two-thirds. 

21. Second, we can improve trade processes by strengthening trade facilitation and enhancing data connectivity. Like containerisation in the 1970s, data connectivity will spur the next revolution in global trade. 

22. Singapore launched the Networked Trade Platform in 2018 as a one-stop information management system for traders. Singapore and China will also establish the Electronic Origin Data Exchange under the China-Singapore Free Trade Agreement (CSFTA) upgrade through this platform.  

23. At the regional level, ASEAN is also building the ASEAN Single Window, which is now “live” for six ASEAN Member States (i.e. Brunei, Indonesia, Malaysia, Singapore, Thailand, Vietnam). The platform will further facilitate trade and improve compliance within ASEAN.   

24. These initiatives seek to create a trading environment where trade data and electronic forms can be exchanged seamlessly and securely. This will cut administrative cost and processing time spent at Customs.    

Conclusion

25. To enhance external trade flows, governments must resolve their internal contradiction to boost their own economic competitiveness and work with other like-minded partners to uphold the global trade architecture. With the right fundamentals and both hard and soft connectivity in place, the BRI can accelerate the exchange of goods, people and ideas for the common good of all. 

26. Thank you and I wish everyone a fruitful day ahead.