SM Goh Chok Tong at the Singapore-Guangdong Development Forum 2009

It gives me great pleasure to address the Singapore-Guangdong Development Forum, which brings together officials, businessmen and academics from both sides to exchange views and development experiences as well as to network.

My relations with Guangdong go back a long way, well before our two countries established diplomatic ties in 1990. I first visited Guangzhou in 1971, on my way to Beijing. I was then working for Singapore’s national shipping line, Neptune Orient Lines. Guangzhou was then not easily accessible to foreigners. I had to first go to Hong Kong to apply for a visa. From Hong Kong we took a train to the Chinese border. Then carrying our luggage, we walked some 100 metres to the train station on the Chinese side, cleared immigration and customs formalities, and had lunch before we got on to the Chinese train for Guangzhou. I remember Guangzhou roads as being jammed with bicycles. There were not many cars but they sounded their horns continuously to avoid hitting the cyclists. Competing with the horns was the revolutionary music which played non-stop in the hotel and public places. It was a very different city then. Since that memorable trip, I have been back to Guangzhou a few times, the last time being 19 years ago. Naturally, I am happy to be back and to find a thriving, prosperous and developed Guangzhou.

China-Singapore relations are excellent in every aspect. For this afternoon, I shall focus on the economic aspect. The Singapore-China Free Trade Agreement which we concluded last year is China’s first FTA with an Asian country. This FTA is not just important symbolically but also in substance. China is Singapore’s 3^rdlargest trading partner while Singapore is China’s 8^th largest trading partner. Singapore is also China’s largest trading partner among ASEAN countries. And for many years now, China has been our top investment destination, with cumulative realised investments amounting to US$40 billion.

A strong and prosperous China is good for Asia and the world. China’s fast economic rise will not only help Asia but also act as a new locomotive to the world’s growth. This view of ours has been vindicated by the current global financial crisis and economic recession. Though China’s economic growth will slow down this year, it is still expected to achieve 6.5% according to the World Bank. Premier Wen Jiabao, however, is aiming to achieve a growth rate of 8%. Whether it is 6.5% or 8%, it will easily win China a gold medal compared to the severe recession being experienced by other major economies. More importantly, this growth will help shore up growth of many other countries, especially if China’s massive stimulation package also leads to an increase in imports.

I remember well the seeds for China’s reform and opening up policy for I was at the historic meeting between Deng Xiaoping and Lee Kuan Yew when Deng visited Singapore in 1978. Although the main topic of discussion was geo-political, Deng also saw how an open economy had helped Singapore grow. He observed how Singapore had benefited from foreign capital, technology and management knowhow through the investments of multi-national companies. I believe Deng’s visit to Singapore and his frank discussion with Lee Kuan Yew had in some way helped convince Deng to open up China. Lee Kuan Yew also told Deng that if Singaporeans, who were descendants of illiterate, landless peasants who had to leave China, could do it, then China with its progeny of scholars, mandarins and literati who had stayed home could certainly do it. Now, Party Secretary Wang Yang has picked up this point. He mentioned in his interview with Lianhe Zaobao last year that his call for Guangdong to match Singapore’s development is not new but merely a continuation of Deng Xiaoping’s call to learn from and overtake Singapore.

Singapore was one of the earliest investors in China when it first opened up. Amongst many programmes, we established the Suzhou Industrial Park (SIP) in 1994 to transfer Singapore’s developmental experiences to China through a hands-on implementation of a large scale economic project. Today, the SIP is one of China’s top development zones and a model for other industrial parks.

This year, Singapore and China will celebrate the 15th anniversary of the SIP. China has come a long way since. Today, Singapore learns as much from China as China learns from us. We are now embarking on a new phase of mutual learning and cooperation to help our two countries face the new common challenges of sustainable economic growth, environmental protection and climate change. Premier Wen and I have therefore agreed to launch another flagship project, the Singapore-Tianjin Eco-city Project, to share expertise and enhance ties between China and Singapore. This eco-city project would see our two countries working closely together for the next 10 to 15 years.

When Party Secretary Wang Yang visited Singapore last year, he asked me why Singapore did not consider doing an iconic project with Guangdong? The reason is simple. Guangdong has been China’s top performing provincial economy for the past two decades. It is the traditional test-bed for new ideas and programmes. This role is not surprising. Since the 16^th century, Guangdong has had extensive trade links with the rest of the world. European merchants coming northwards via the Straits of Malacca and the South China Sea, traded extensively through Guangzhou. Because of Guangdong’s distance from the northern capital and its contact with foreigners, Guangdong was the centre of revolutionary activity. It was in Guangzhou that Hong Xiuquan formulated his Taiping Uprising. Sixty years later, Guangdong was the homeland and base of operations for Sun Zhongshan, the founder of modern China. In fact, Sun Zhongshan was one of the earliest Guangdong leaders to visit Singapore − 8 times between 1900 and 1911.

Since the late 1970s, Guangdong has been at the forefront of China’s economic reform and opening up. By attracting more foreign enterprises than any other Chinese province and by adopting market-oriented policies, Guangdong has achieved a compound annual growth rate of over 19% for the past three decades, becoming the “dragon head” （龙头）of China’s economy. Naturally, Beijing leaders preferred to steer Singapore to other provinces where we could make a bigger impact.

But now Guangdong faces a new and daunting challenge. Having proven the effectiveness and relevance of China’s reform and opening up policy in the last 30 years, it now has to blaze a new trail to the next level of development. It has to undergo yet another round of economic restructuring and reform.

It takes a courageous and visionary leader to recognise the challenges that Guangdong faces and to have the determination to confront them. I am confident that with his energy and drive, Party Secretary Wang will succeed in his task. I can speak from experience that it is never easy to venture out of one’s comfort zone and explore new possibilities. It is much easier to stick to what has worked in the past and to just hope for the best. The Americans have a saying, “If it ain’t broke, don’t fix it.” But nowadays, even if it ain’t broke, it can become obsolete. It is not tenable to stand still and bask in past successes because newcomers with new technologies and ideas will create new markets and steal our customers from under our noses. Hence, Singapore has to constantly reinvent itself, always trying to move into new economic areas. I am glad to know that Guangdong is also doing the same.

In restructuring its economy, Guangdong is embracing new industries and pursuing new growth strategies. I understand that Guangdong intends to phase out low-end, labour intensive industries and move up the economic ladder to high-tech and green industries. Party Secretary Wang Yang has set the objective for Guangdong to become “the first and best” province （首善之区） in China and has advocated “emancipation of the mind” （思想解放）to reinvent Guangdong’s economy.

I am confident that Guangdong will succeed as it has strong fundamentals and leaders with foresight. With the Central Government’s Plan for the Reform and the Development of the Pearl River Delta, Guangdong is in an excellent position to continue being the driving force of China’s economy.

As a southern province, Guangdong should also devise a strategy to reach out and engage ASEAN. The China-ASEAN Free Trade Agreement is expected to come into being next year. There will be many opportunities for bilateral cooperation. Guangdong can leverage on its geographical, historical and social links to Southeast Asia to take the lead in developing these opportunities.

Singapore is happy to participate in Guangdong’s effort to restructure its economy. We could be a source for capital, technology, advanced services and ideas. We can be a bridge between East and West and between Guangdong and ASEAN.

Guangdong is already Singapore’s top provincial trading partner and 2nd largest investment destination – with a cumulative total of US$5.5 billion in nearly 2,000 projects – in China. Singapore is Guangdong’s 5th largest foreign investor. Of the 150 Chinese companies listed on the Singapore Exchange, 26 (17%) are from Guangdong. Beyond economic linkages, we are connected by about 20 flights a week with Guangdong. It takes only a few hours to fly direct between Guangzhou and Singapore, not the 2 or 3 days it took me to go to Guangzhou in 1971, including an overnight stay in Hong Kong.

It is against this backdrop of strong bilateral relations that I am pleased to witness shortly the signing of a Memorandum of Understanding between Singapore and Guangdong on the establishment of a Singapore-Guangdong Collaboration Council. I believe that this will be the beginning of a mutually beneficial relationship between Singapore and Guangdong. The Knowledge City that Singapore and Guangdong will be jointly developing will be an icon of this close relationship.

This Singapore-Guangdong Development Forum that has brought us all here today is an excellent opportunity for both sides to exchange views, establish new contacts and renew acquaintances. I hope that the momentum generated by this Forum will build into a steady flow of exchanges at all levels between Singapore and Guangdong.

Thank you.