“Never Normal” on Trade

Distinguished guests,

Ladies and gentlemen,

 

1. Good afternoon. Welcome to the 12^th edition of the FutureChina Global Forum 2021.

a. I am glad that some of us can meet in person this year with this hybrid format, after last year’s virtual forum.

b. This new way of gathering exemplifies the theme of the forum, “Never Normal”, where the world we live in is constantly evolving and often unpredictable.

2. COVID-19 has placed a spotlight on the vulnerabilities of global trade. This has led countries and companies alike to worry about the resilience of their supply chains.

3. At the height of the pandemic, countries around the world experienced severe disruptions to their supply chain.

a. National lockdowns led to supply sources being cut off, global shipping delays and higher freight rates.

b. This impacted a wide range of goods, from daily essentials and consumer goods, to critical supplies such as medical products, pharmaceutical ingredients, and manufacturing inputs.

c. These disruptions accelerated shifts in global supply chains, which were already taking place prior to COVID-19, driven by geopolitical, environmental, and technology factors.

d. Increasingly, global MNCs are looking to build more resilient, agile and sustainable supply chains.

4. Singapore’s strong fundamentals in innovation, talent development, physical and trade connectivity have continued to support industries as they transform and grow their supply chain.

5. Throughout the COVID-19 pandemic, we have sought to minimise disruptions to global supply chains by facilitating the global flow of essential supplies through Singapore.

a. In March 2020, Singapore signed a Joint Ministerial Statement with 11 other countries[1] and affirmed our commitment in maintaining open and connected supply chains throughout the pandemic.

b. Singapore’s port remains the world’s busiest transshipment port, handling 36.9 million TEUs in 2020. Vessel arrival tonnage rose by 1.7% from 2019 to a record 2.9 billion gross tonnes.

c. Singapore is also an important manufacturing node in the global supply chain for chemicals, pharmaceuticals and semiconductor supplies, thanks in part to our continued exports of critical supplies throughout the pandemic.

6. Beyond keeping trade flows going, we also recognise the need to be proactive and think long-term.

7. We have to anticipate the risk of supply chain disruptions arising from crises like the COVID-19 pandemic, and bolster Singapore’s readiness to face future crises.

a. We have adopted a multi-pronged strategy to secure our essential supplies. This involves diversifying our import sources, increasing local production, and building local inventory to ensure a secured supply of goods at stable prices.

b. For instance, we worked with the industry to identify new sources of essential food items like eggs from Ukraine, frozen shrimp from Saudi Arabia, and vegetables from China. We now import food from more than 170 countries.

c. Singapore has also continued to work closely with industries to facilitate trade and strengthen their business continuity plans to better cope with future supply chain disruptions.

8. We also seek to establish a strong regional ecosystem that would reduce trade barriers and preserve connectivity by deepening multilateral cooperation with our trading partners.

a. The recent signing of the Regional Comprehensive Economic Partnership (RCEP), which involved ASEAN and other external partners including China, Japan, Australia and New Zealand is a good example.

b. This will support our companies’ efforts in building more resilient supply chains by upholding a rules-based trading framework that is free, and open.

9. These collaborative efforts will also create new business opportunities. In this regard, the Southeast Asia region and China are well-placed for businesses to capture new opportunities for trade.

a. Collectively, the 10 Southeast Asian countries and China enjoy a strong economic relationship.

b. Both ASEAN and China are committed to enhancing the ASEAN-China Free Trade Area (ACFTA), which was China’s first FTA and ASEAN’s first FTA with an external partner.

c. Both sides have been each other’s top trading partner for 12 years in a row.

d. Trade volume between the ten ASEAN countries and China increased by 7% to US$730 billion in 2020, a sign that trade between both sides continues to be robust, despite the impact of Covid-19.

10. The Southeast Asian economies will also be increasingly important to China as part of its “Dual Circulation” strategy.

a. China wants to remain open to global markets, even as it focuses on production for its domestic market.

b. Singapore and the Southeast Asian countries are well-positioned to facilitate the flow of goods, financing and investments between China, Southeast Asia, and the rest of the world.

c. As companies look to reorganise their global supply chains post-COVID-19, Southeast Asia can be an attractive choice for companies considering a “China Plus” strategy.

11. With our strong trade and logistics links to ASEAN economies and China, we can play an important role in helping to enhance regional trade connectivity.

12. First, we can foster greater physical connectivity to provide businesses in the ASEAN region and China greater access to each other.

a. The China-Singapore (Chongqing) Connectivity Initiative – New International Land-Sea Trade Corridor (CCI-ILSTC) is a key initiative under the CCI, Singapore’s third Government-to-Government project with China.

b. It has played a crucial role in facilitating the continuous flow of essential goods, such as food and medical supplies, between China and the region during the COVID-19 pandemic.

c. The trade corridor also brings about greater integration of Western China with Southeast Asia.

d. It has catalysed trade and economic growth by reducing the time needed to transport goods between both regions from three weeks to just one week.

e. Despite disruptions caused by the pandemic, the CCI-ILSTC witnessed a 30% year-on-year increase in cargo flows in 2020.

13. The increased connectivity and economic opportunities in the region will help to drive economic recovery in the region.

14. We look forward to having more partners and companies participate in the CCI-ILSTC, so that we can further strengthen the network and seize the opportunities that the trade corridor brings.

15. Next, beyond physical connectivity, Singapore can help to enhance digital connectivity between ASEAN economies and China to facilitate trade.

16. To do so, we must embrace digitalisation, which will play a much more substantial role in a post-COVID world. All countries and businesses, big and small, will have to adjust to this new environment.

a. Singapore aims to deepen our companies’ capabilities in Industry 4.0 supply chains and equip them with the knowledge and know-how to take advantage of a digitalised world.

· An example is the Grow Digital initiative under the SMEs Go Digital programme.

· Many businesses have had to pivot online amid challenges brought about by the pandemic.

· Through the initiative, SMEs can participate in B2B and B2C e-commerce platforms that offer regional or global reach. This enables them to sell abroad without a physical overseas  presence and expand their market internationally.

· Over 2,000 enterprises have come on board and are transacting on these e-commerce platforms.

b. We also plan to enhance our supply chain agility and platform interoperability to enhance our competitive advantage through digitalisation.

· The Singapore Government has been working with industry partners to develop a common data infrastructure (CDI) to address inefficiencies in the current supply chain ecosystem.

· By facilitating trusted and secure exchange of data, the CDI can help drive efficiency and productivity through greater information flows across the ecosystem.

· Businesses could also easily “plug-and-play” into the infrastructure to optimise their supply chains’ data flows. 

· The development of the CDI will enable Singapore to advance our position as a digital hub for trade and fulfilment and create new opportunities for our partners to trade with and through Singapore.

17. We should continue to seize opportunities where Singapore and the ASEAN region can strengthen digital trade with China.

a. Singapore and China have established the Electronic Origin Data Exchange System (EODES) under the upgraded China-Singapore Free Trade Agreement. This enables the digital exchange of preferential certificates of origin and certificates of non-manipulation.

b. In addition, the ASEAN Single Window enables traders in ASEAN countries to expedite cargo clearances through the electronic exchange of cross-border customs documentation among ASEAN Member States. ASEAN is exploring linking the ASEAN Single Window with Dialogue Partners, including China, to facilitate the transmission of electronic trade documents and reduce the cost of doing business.

c. China’s participation at the WTO Joint Statement Initiative for E-Commerce (JSI) is a positive development and presents opportunities for Singapore and ASEAN economies to work more closely with China to develop high standard global digital trade rules.

18. In a state of “Never Normal”, we should learn to expect regular disruptions and constant shifts in our trading environment.

19. But we need to be ever-ready for these changes. We must be nimble and ensure our supply chains remain resilient and open to one another.

20. Singapore and ASEAN can continue to build on our strong economic linkages with China and uncover new opportunities to enhance physical and digital trade.

21. In doing so, Singapore and ASEAN can maintain our relevance and continue to thrive as a region.