SM Goh Chok Tong at the Business China Spring Reception 2010

Let me first wish everyone here a Happy and Prosperous Year of the Tiger. Most of us are cautiously optimistic about our economic growth prospects this year but the Tiger may yet surprise. More importantly, the Lunar New Year is a time for family reunions and friends to gather. Hence, I am happy to see so many China-based Singaporean friends who are back home to celebrate the New Year.

China’s potential and growth

Most, if not all, of us here today share one common trait, and that is an appreciation of the potential of the Chinese economy and people. Over the past year, China has weathered the global economic downturn with exceptional resilience. Despite shrinking external demand and rising unemployment, China’s timely and bold policy responses have enabled its economy to grow at a sizzling 8.7%[1] in 2009. As the G3 economies continue to struggle to recover from the global financial crisis, China is reinforcing its role as the engine for growth in Asia, if not the world.

Here in Singapore, we recognised China’s potential early, soon after China began to open up its economy in 1978. In a way, it seemed natural for us because many of our forefathers came from there. But being Chinese and speaking the same language are, as many of us have discovered, not enough. Many of our businessmen, especially in the early years, have had to learn hard lessons on the importance of guanxi and the challenge of finding reliable local partners. The Singapore government and our civil servants too learnt practical lessons on how best to have a productive relationship with China, especially over the Suzhou Industrial Park. Because of these early efforts, China is today our 3rd largest trading partner and top investment destination[2]. All of you have played a part in this achievement.

Leveraging on a prosperous China

Looking ahead, China will become even more important globally. When Goldman Sachs predicted back in 2003 that China’s GDP would overtake that of the US in 2041, it was met with some scepticism. But no longer. In fact, the dislocation brought about by the recent global financial tsunami had accelerated time. Goldman Sachs now believes that China will become the world’s largest economy by 2027, 14 years sooner than earlier predicted. In a research report put out last month, PWC went even further, believing that China would overtake the US as early as 2020, a mere decade from now. Of course, this is in terms of the size of GDP. In GDP per capita terms, China will take much longer to catch up with the US.

But whatever it is, the point is we must find opportunities to ride on China’s growth. While our GDP growth is important, given the fact that we are nearing our constraints of land and labour, you will find us increasingly paying more attention to our GNP growth, i.e. our external wing. Many of you are right at the frontline of this external wing. Help lead the way for others. The Government will, of course, continue to play an active facilitative role.

First, to help our companies gain an even stronger foothold in China, Singapore has concluded a Free Trade Agreement (FTA) with China, the first Asian country to do so. This came into force in January last year. It was complemented by the ASEAN-China FTA (ACFTA) which came into force in January this year. The ACFTA effectively creates a free trade area of over 1.9 billion people with a combined GDP of almost US$6 trillion.

Second, to do business in China, Singaporeans need to understand nuances of Chinese business culture. Being able to speak the same language is critical in networking and developing rapport. MOE is therefore looking at how to make Chinese lessons in our schools even more engaging. Those students with the interest and aptitude are being encouraged to pursue Higher Chinese at Primary and Secondary levels. In fact, more than a quarter of Chinese Language students are currently studying Higher Chinese at ‘O’ levels. There are other subjects introduced at Junior College level such as China Studies and Chinese Language and Literature to provide students with further opportunities to deepen their learning. Special Chinese Language programmes such as the Chinese Language Elective Programme and Bicultural Studies Programme also offer a more intensive Chinese curriculum and significant immersion in China.

Third, we will continue to catalyse business opportunities in China. The seven provincial-level business councils, as well as other high-level dialogues and platforms, help open opportunities for companies, reinforce the Singapore brand name and increase our mindshare in China. Together with trade associations and other business chambers, IE Singapore will continue to organise and support business missions to attend international trade fairs, and especially to engage emerging regions.

People sector initiatives

Beyond what the public sector can do, I am glad to see initiatives by the people sector in grooming future talent for the China market. For example, in 2004, the Singapore International Foundation (SIF) started the Singapore-China Young Business Ambassadors Programme with partner organisations in Shanghai to foster better cross-cultural understanding. Young professionals from Singapore are sent to Shanghai, and vice versa, for a 10-week work stint to network, develop global perspectives and gain business and market knowledge.

In this regard, Business China’s launch of the Young Leaders Programme today is highly commendable as it complements the efforts of the public sector in cultivating more bilingual and bicultural talents to spread our wings in China. I am told that successful applicants to the programme will undergo 6- to 18-month stints. The first batch of trainees will be attached to the China operations of eight participating companies[3] in regions such as Shenzhen, Zhuhai, Shanghai and Jiangsu. I hope more companies will follow the example of the eight companies.

Conclusion

Tonight’s gathering is as much about networking as it is about celebrating the New Year. I shall end my speech here to give you more time to catch up with one another and trade information and experiences.

最后，我祝大家：新年快乐，身体健康，心想事成。