DPM Heng Swee Keat at the FutureChina Global Forum 2023

Mr Lee Yi Shyan, Chairman Business China,
Mr Ho Chee Hin, CEO Business China,
Excellencies,

Good morning.

Before I commence my speech, I would like to express my condolences on the passing of Mr Li Keqiang.
我在来会场的途中，得知中国前总理李克强先生突然离世的消息。他的离世令人感到惋惜。我上一次与李克强先生会面是在2019年。李先生在任期间，重视并推进新中两国关系。在此，我向中国人民以及李先生的家人表达最深切的慰问。

Ladies and gentlemen, 
Welcome to the 2023 FutureChina Global Forum.

This Forum, first convened in 2010, is a brainchild of Singapore’s founding Prime Minister Mr Lee Kuan Yew, whose 100th birth anniversary we are commemorating this year.

Mr Lee was a highly regarded statesman with a keen interest in global developments. 

In fact, an American friend once described him as “a one-man intelligence agency”.

Mr Lee recognised the value of fostering greater awareness of developments in China and Asia, not only among leaders and officials in government, but also academics and leaders in the private sector. He envisioned the FutureChina Global Forum as a platform that could help deepen our understanding of each other, and to address the challenges and opportunities together. 

I last addressed the FutureChina Global Forum in July 2021. Since then, the world has grown even more uncertain.

Geopolitical tensions have risen sharply – in Asia, in Europe with Russia’s invasion of Ukraine, and most recently, in the Middle East.

The disruptions to global supply chains and the effects of huge policy stimulus during the pandemic years have led to higher inflation.  Central banks around the world are all tightening monetary policy, leading to a sharp rise in interest rates.  

The global business environment has become more uncertain and difficult. 

Beyond these immediate issues, there are also long-term structural challenges, including:

a. Rapid technological advances that are reshaping the global economy;

b. Climate change which is affecting the world’s weather patterns and biodiversity; 

c. Rapid ageing of the population, in many developed economies, China and parts of Asia.

Being clear about where we are today is an important first step in charting a better future for tomorrow.

So the Forum’s theme this year, “Pathway to Clarity – Charting the Future” is most appropriate.

To better understand where we are today, it is useful to look at the past.

While the world today is in a state of flux, it is not the first time that we have experienced this.

Following two world wars in the last century, the decades of the Cold War between the 1950s and the 1980s were a period of great division and uncertainty.

The General Agreement on Tariffs and Trade, or GATT, helped to establish rules and norms. Countries that adopted open trade policies enjoyed rising prosperity.  

The establishment of the World Trade Organization or WTO in 1995 was a major milestone in globalisation.

With a structure for negotiating and governing a rules-based framework for trade and investment, it laid the basis for deeper global economic cooperation.  This enabled economies and companies that were outward oriented to make the best of their competitive advantages to grow and develop. 

Between 1995 and 2022, global merchandise exports grew almost 5 times from around US$5 trillion to more than US$25 trillion. In the same period, global GDP grew by more than 3.2 times, from US$31 trillion to over US$100 trillion. Global GDP per capita grew by more than 2.3 times. So you can see the impact of globalisation in uplifting people all over the world.

By participating in a more interconnected, multilateral trading system, people in many parts of the world have been uplifted with hundreds of millions crossing the poverty line, especially in China.
 
But globalisation and technological advances also create stresses in many societies.

The benefits of free trade are spread widely across many segments of people, but the pain of dislocation of industries and jobs fall on certain groups. Think of the disruptions that automotive workers, for example, face when they lose their jobs. 

Free trade creates opportunities for businesses venturing out, but also stress for those who may not be able to cope with sharp competition.

Often appeals to bring back these jobs, by having protectionist policies, resonate with voters who are badly affected.

It is easier to promise the easy way out, than to embark on difficult structural reforms and upskilling of workers.

What lessons can we draw from the past, to inform the path we will take going forward? Let me briefly outline three areas.

First, all countries, and in particular the major powers, must prioritise long-term interests over short-term wins and short-term political considerations.

As Mr Lee’s Principal Private Secretary from 1998 to 2001, I travelled with him to many countries including several trips to the US and China.

Mr Lee had a strategic grasp of power and geopolitics. 

Over the years, he built ties with leaders and officials from several US administrations – from President Nixon to President Obama. He also engaged different generations of Chinese leaders, from Chairman Mao Zedong to Chairman Deng Xiao Ping to Chairman Xi Jinping.

Importantly, he helped both sides develop a better appreciation of each other’s perspectives, and persuaded them to focus on their longer-term strategic priorities and common interests to surmount immediate frictions.

I saw this first hand when Mr Lee met separately with former US-Secretary of State Madeleine Albright and former PRC Foreign Minister Tang Jiaxuan in the aftermath of the bombing of the Chinese Embassy in Belgrade in 1999.

The US-China relationship today remains the single most important and consequential bilateral relationship in the world. Unfortunately, it has been under strain for some years now.

There have been some encouraging signs of thaw this year, with high-level visits and exchanges resuming gradually.

But there is still a long way to go and it remains clear that a trust deficit remains.

Competition between the US and China will likely shape the world for years to come. Mr Lee himself said some years ago that competition between the two big powers is inevitable, but conflict is not. Importantly, both great powers must find a way to co-exist. 

The world cannot afford a great power confrontation, especially when both have nuclear capabilities.  Many countries around the world, but especially in our region, Southeast Asia, want to maintain good ties with both sides.

Ultimately, it is neither in the US nor China’s interest to be embroiled in conflict. But accidents can happen. 

It is therefore critical that both sides put in place sufficient guardrails to ensure that differences do not escalate into conflict and focus on cooperation in areas of long-term common interests.

The recent visits to China by three senior US Cabinet Secretaries, and the ongoing visit by Chinese Foreign Minister Wang Yi to the US are a good start to the resumption of high-level dialogues to resolve differences, to work together to promote global economic recovery and to address global challenges. 

Second, in taking a long-term view, countries must recognise that the most critical challenges of the future, as well as the most exciting opportunities, are ones that require collective action and collaboration.

Leaders of any country, regardless of size or location, share one common objective – to uplift the lives of our peoples. 

To succeed in tackling the biggest risks facing humanity, and to seize the emerging opportunities, we need cooperation and collaboration across borders.

In technology, for example, new breakthroughs in digitalisation, robotics and like Artificial Intelligence (AI) offer great potential to transform our economies, businesses and lives.

At the same time, harnessing these new technologies in a safe, responsible, and ethical way will require global collaboration on norms and safeguards.

In the same way, our ability to harness mRNA technologies promises great breakthroughs in medical care, but there are also ethical considerations in how we use genomics data and technology.

To tackle climate change and make a successful energy transition we will likewise need collective efforts across borders and sectors.

Mobilising capital and promoting innovation to address humanity’s existential challenge is another area where all countries, including the US and China, can and must cooperate on, as it is in all our common interest.

I was in the US recently and saw many innovative companies working on solutions that could make significant breakthroughs in addressing these challenges.
 
Third, as countries take steps to continue to integrate their economies, it is important to also undertake structural reforms, if we are to deliver a better life for our people. 

It is a very positive development that for the past several decades, ASEAN and Asia have intensified regional integration efforts, both within and beyond Asia.

ASEAN has emerged as a major growth centre in Asia. 

The region’s population of 660 million is relatively young. We can reap the demographic dividends if we pursue structural changes to shift to a green and digital economy.

Last month, we launched negotiations for a new ASEAN Digital Economy Framework Agreement. This can potentially grow the value of our digital economy to US$2 trillion by 2030.

ASEAN is also actively engaging external partners.

ASEAN has regional FTAs with China, Japan, Korea, India and Australia/New Zealand.

Many members are involved in the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP), and Indo-Pacific Economic Framework for Prosperity (IPEF).

Over the years, ASEAN has kept up the momentum on integration and worked towards developing an open and inclusive regional cooperation architecture.

Diversification gives ASEAN greater resilience, and we encourage all major economies to build stakes here. 

The US, China, Japan and the EU are ASEAN’s largest trading partners as well as the largest sources of Foreign Direct Investment into ASEAN.   

In fact, the US’ FDI into Singapore alone is larger than its investments into China, India, Japan and Korea combined.

So fostering greater economic interdependence through overlapping circles of economic interests help foster growth and stability. 

Singapore and China have deep and multifaceted cooperation in many areas. 

Earlier this year, we upgraded our ties to an “All-Round High-Quality Future-Oriented Partnership”.

Since China’s reform and opening up, Singapore has participated actively in China’s development, including through major Government-to-Government projects like the Suzhou Industrial Park which will mark its 30th anniversary next year and the Tianjin Eco-City which celebrates its 15th anniversary this year.

Singapore was the first Asian country to sign a Free Trade Agreement or FTA with China, just as we were the first Asian country to sign an FTA with the US.

Today, China is Singapore’s largest trading partner in goods and Singapore is the largest foreign investor into China.

But with globalisation and technological advances, the economic structure of all economies are changing.  This brings new problems, such as the dislocation of certain sectors that I mentioned earlier. For governments and the private sector, we must adapt and innovate to meet the needs of changing economic and political circumstances. 

As a small, open economy subject to the full forces of competition, Singapore has embarked on industry transformation since 7 years ago.  We have some modest success as business leaders understand the need to change.  

China is now undertaking major structural reforms.  It is embarking on developing a dual circulation economy – as its economy grows, even as it serves as the ‘factory of the world’, it is no longer possible to just grow through exports. 

Stimulating domestic consumption, and meeting the needs of her 1.4 billion people is now a major priority.

There are also structural issues that need to be addressed after years of high growth – including growing inequality in income and wealth, the structure of local government financing, and over concentration of investments in certain sectors such as property. 

The Chinese leadership is taking action to address these structural issues, as Chairman Mr Lee Yi Shyan said earlier.  They will need to now carefully balance the different needs of a far more complex economy than when China first joined the WTO.  They will need to give confidence to investors and external partners that it remains open to trade and investment, and to engaging the world. 

In turn, as China goes through this transition, it is important for all our business leaders to understand its new development priorities and find new opportunities. 

A business leader told me recently that his business in China is expanding rapidly, as he is seeking to address the growing healthcare and housing needs of an ageing population. 

Another who is in property development said he was doing fine as his company focused on providing good but affordable housing in key cities, to meet the needs of young professionals who are emigrating there. 

So understanding the trends will be important for business leaders as you think about your strategy going forward.

Let me conclude by bringing together the key points. 

a. First, peace and stability are prerequisites for growth, and the most important bilateral relations in the world is that between the US and China. The recent thawing of tense relations is a good start, and we urge both parties to continue to deepen engagement.

b. Second, Singapore and ASEAN countries are actively pursuing a range of trade agreements, to build bridges for cooperation. But ultimately, it is businesses that can make the best use of these bridges. So I urge all business leaders here to understand and make the best use of these bridges.

c. Third, whether is it the government, or the private sector, globalisation and technological advances are important means to raise our competitiveness, to uplift our workers and citizens.  It is necessary to understand the changes that are happening, and transform your business models and strategy, so that you can continue to contribute to the significant structural reforms that all economies, including China, must undertake.  

Business China and all business leaders here must continue to deepen our understanding of the economic developments in China, the region, and the world. 

So I encourage you to share your experiences and views, make the best use of this forum to find partners to collaborate.

Later this evening, we will be recognising individuals and organisations who have actively contributed to this bridge-building.

This afternoon, the annual Business China Youth Forum will involve more than 500 participants from Singapore, Southeast Asia and China. 

Before I conclude, allow me to say a few words in Mandarin:

李光耀先生对地缘政治有很深入及战略性的了解。经历了二战的痛苦及过后的冷战，他相信国际经济的合作，对于提升国人的生活水平， 及加强区域和平稳定是至关重要的。自从邓小平先生改革开放以后，他意识到中国的发展潜能，也扮演了催化中国经济发展的角色。他支持中国加入世贸组织，并通过苏州工业园项目转移经济发展软件，促进中国加入基于规则的世界贸易体系。

但最近中美之间的战略竞争，不仅会影响全球经济增长，而且会带来严重升级为冲突的风险。在竞争之际，需要有适当的护栏来避免无意冲突，而双方都希望避免严重的冲突。双方高层最近进行的交流是有益的。我们这个地区各国从全球化中受益，并寻求继续将其经济融入世界。

我们不选边站，期待美国和中国的领导，以应对全球挑战，并继续专注于经济发展，改革经济，继续提升各国人民的生活水平。中国领导最近也在进行新一轮的经济改革，以双循环的政策推动接下来的经济发展，也不能够单靠出口贸易。企业要做得好，要好好地把握这些新的机遇，寻找新的方式来加强自身的竞争力。

新加坡和中国已将两国的关系提升为“全方位高质量前瞻性的伙伴关系”。我们将在李光耀先生建立的基础上再接再厉，继续深化与中国，美国，和世界各国的关系，应对全球挑战，并继续深化经济关系。

In closing, Dr Henry Kissinger, a close friend of Mr Lee who himself turned 100 recently, once described him as, I quote, “not only one of the seminal leaders of our period, but also a thinker recognised for his singular strategic acumen.”

Platforms like the FutureChina Global Forum help to spotlight important trends and developments and build greater understanding. 

Through this, the Forum helps us to broaden and deepen our understanding of the trends and challenges ahead, and to find new partners and new modes of cooperation. 

Business China has put together a wide-ranging agenda and impressive list of speakers this year. I am certain that there will be many interesting takeaways from the sessions today. 

I wish you all engaging and constructive discussions for the rest of the day and I hope that this year’s FutureChina Global Forum is a great success. Thank you.