Mrs Teo Khin Hiang, Principal, River Valley High School
Ms Tin Pei Ling, CEO, Business China 
Dr Tang Siew Mun, Dr Gu Qingyang,
Teachers, students:

1.         A very good afternoon to all of you. It is my pleasure to be here at the 4th edition of the China Studies Perspectives Forum, which has been a useful platform for our young Singaporeans to gain insights on China’s development.

2.         The topic for today’s forum is “ASEAN and China: Cooperation or Competition?”.  To have a better understanding of this problem statement, it is important that we consider the issue from three perspectives. 
• First, should we look at China as one entity or as a large country with different regions, which we need to engage separately? Not all the regions are the same, they have some similarities, they also have some differences. And it is through these differences that we can ask, “What are the opportunities for Singapore and Singaporeans?”
• Second, how well do we know our region and how can we deepen our understanding? I asked this question because we talk about Singapore being the hub for ASEAN, how we can enhance cooperation between ASEAN as our economic hinterland, with China, with India, and with the rest of the world. 
• Third, what role can Singapore play to add value to connect Chinese businesses and consumers to ASEAN and vice-versa?

Changing China

3.         China is highly centralised in its planning and many policies are designed at the top-level. On the other hand, China is a huge country with different regions, with different industry focuses and development priorities. Many of these policies are implemented at the local regional or provincial level. For example, 
• In the North, there is greater integration of the Beijing-Tianjin-Hebei metropolitan area （京津冀协同发展）.
• In the South, China just announced the development of the Guangdong-Hong Kong-Macau Greater Bay Area (GBA) （粤港澳大湾区）, which comprises 11 cities, to a financial and innovation powerhouse. Together, they have a population of 68 million and combined GDP of US$1.4 trillion. 
• In the East, there are plans to further integrate the Yangtze River Delta region （长江三角洲）, which includes Shanghai, Jiangsu, Zhejiang and Anhui. 
• The Western region, which covers two-thirds of China’s land mass, is also rapidly industrialising under the “Develop the West Strategy” （西部大开发） as industries shift inland to take advantage of lower labour cost.  

4.         The key takeaway here is that as we engage China as a country, we also need to be plugged in at the local level. Regions within China are embracing greater economic integration, with clearer positioning of cities within the same region, and achieving better allocation of resources. This is important as there is also competition between the regions, and if you can size up the opportunities for Singapore by the different regions, the opportunities for us, the competitive dynamics, their personalities, it can help to open up more doors. 

5.         China is also restructuring and moving up the value chain into advanced manufacturing and services. Some people have the wrong impression that China is backward and rural. But China is actually a very modern place, especially in the cities. In fact, in some areas, because of their bold use of technology, they are quite advance in areas like Artificial intelligence, facial recognition and robotics. Digital giants like Baidu, Alibaba and Tencent have led the way to transform how one lives, works and plays in China and even the countries that they operate in. 

6.         At the same time, Chinese companies ranging from engineering, ICT, and finance sectors are venturing out and expanding their international operations. China’s Overseas Direct Investment surpassed its Foreign Direct Investment for the first time in 2015. Again, this is something that is changing. In the past, China is thought of as a big market that people are investing in. But today, Chinese companies are coming out to invest. This is a sign of the changing nature of the Chinese companies. These represent significant opportunities for Singapore and our companies. 
 
Growth Potential of ASEAN

7.         China has been ASEAN’s largest trading partner for eight consecutive years, and China’s investment into ASEAN increased by nearly 40% in 2017. 
 
8.         What does all these developments mean for ASEAN going forward? First, I think we need to continue to enhance our economic integration efforts. Within ASEAN, we should continue to remove market barriers through the ASEAN Economic Community. With China, we can further enhance our economic ties through the ASEAN-China FTA upgrade and the on-going Regional Comprehensive Economic Partnership (RCEP) negotiations. These are trade agreements to facilitate trade between China and ASEAN by lowering trade barriers, by promoting and facilitating investments, and encouraging businesses to do more business with one another. We increase the level of trade and investments which will benefit everybody. 
 
9.         Second, ASEAN needs to maintain its relevance to not only China, but also our network of global partners. Notwithstanding global economic uncertainties, ASEAN remains an economic bright spot and is projected to become the fourth largest economy by 2030. With a young, dynamic and urbanising population, ASEAN has much untapped potential in infrastructure and digital market. 
 
10.       Third, we need to embrace the diversity in ASEAN. So far, we have spoken about ASEAN as one entity, which is important, as ASEAN centrality is a core principle when we engage our dialogue partners. However, we should also recognise and understand each country individually. Ten ASEAN Member States (AMS) share similar culture and history as a region, but each is unique on its own, with different political systems and at varying levels of development. 
 
11.       In my travels to countries like Myanmar and Indonesia, I am impressed with the market’s growth potential. I was recently in Myanmar. We attended the opening of a SembCorp power plant there. I also visited some our SMEs that were there. One of them is a bus company that manufacture buses, called SC Auto. They have a factory in Singapore and they are now setting up a factory in Yangon, Myanmar. They manufacture and design buses to cater to the Myanmar market. They shared that the local people require a lot of luggage space for public bus which is quite unlike Singapore. This is an example of a small but important difference that companies need to meet. If you want to do business in a local area, you need to understand in order to match what the consumers there are looking for. To tap on this grow potential, we need to deepen our understanding of our ASEAN neighbours. I encourage young Singaporeans to venture beyond our shores, sign up for immersion programmes or even internships in Southeast Asia. 
 
Connector between China and ASEAN

12.       Many Chinese companies use Singapore as a launchpad to venture into Southeast Asia. How can Singapore continue to play this role and maintain our relevance to both China and ASEAN? 
 
13.       This is not a trivial question. We are in a very good location in ASEAN, we are very centralised, we have good ties with China and ASEAN, you might assume that therefore we will be able to play this role well. But it is not automatic. What’s stopping people from bypassing us and going direct? Why should the Chinese companies come to us, and not go straight to invest in other countries in the region? What is our value-add? This is an important question. It is not something we can assume that will automatically happen. We have to fight for it, and we have to make sure we have real value-add. So, Singapore needs to continue to build on our strengths and create what we call the “network effect”. Some of you may be familiar with this “hub and spoke” model, they use it in airlines for airports, they use it for container ports, and the idea is this: if you transport goods, let’s say in containers, from one city to another city, from one country to another country, it is cheaper, faster and more efficient to come to a hub and then distribute to the spokes instead of point to point. This concept may not be intuitive to some of us, but the “hub and spoke” model works when you have good connectivity. You need all the connections and linkages. So if you want to be that middleman, you want to play that role as that hub and to connect the different points in the region: China, ASEAN, you need to build up the linkages and connectivity. That is going to be an important competitive advantage.
 
14.       Singapore has also been working with China to develop the New International Land-Sea Trade Corridor （国际陆海贸易新通道）of the China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity (CCI-ILSTC). This shorter and direct link, connecting Western China to Southeast Asia, reduces the time to transport goods from Chongqing to Singapore from three weeks to one week.  Companies from Western China and Southeast Asia can now access each other’s growing markets through the corridor.

15.       At the end of the day, talent is at the heart of our competitiveness. I hope that young Singaporeans like yourselves will continue to deepen our understanding of the region and China to better position Singapore for the future. It is a never-ending journey. The needs of China and the needs of ASEAN will continue to evolve. Here, we have to update and refresh, we have to keep up to date on their needs, how we can value-add, what skills do we need to equip our people with. It is a never-ending journey. But this is also why it is so challenging and exciting at the same time. 

16.       Now, please allow me to conclude my speech in Mandarin.

17.    各位老师，各位同学，身为亚细安的创始成员之一，新加坡一直以来积极为亚细安区域的发展和融合不遗余力。多年来，新加坡也积极参与中国的经济发展。我们刚开始的时候是通过苏州工业园合作，第二个政府间合作项目是在天津生态园，第三个是我们的重庆-新加坡互联互通战略性项目。最近广州知识城也被提升为国家级的一个合作项目，希望能通过这几个项目带动新加坡和中国的合作关系，也让我们的领导人跟我们的企业家，我们的年轻一代，有机会交流，加深彼此的认识。至今，中新也成立了七个经贸理事会。新中经贸投资关系紧密，并不断深化。去年，新加坡成为中国一带一路沿线国家最大投资目的地。许多中国企业也利用新加坡作为运营基地，拓展东南亚业务。新加坡能否扮演好中国和亚细安之间的桥梁，靠的不单单是我们的核心竞争力，也靠在座的同学们，年轻一代，不断地对中国和东南亚市场加强认识和了解。

18. 最后，祝大家有个愉快、充实的下午。 谢谢!