Trade agreements boost flow between nations

PRC and Singapore enhance relations through a series of improved deals

Closer China-Singapore economic and trade cooperation will benefit the two countries and add growth momentum to the regional and global economy, said experts and business leaders, adding that the two countries share huge trade complementarity, entwined interests and great economic cooperation potential.

Propelled by free trade deals, such as the Regional Comprehensive Economic Partnership pact, the Belt and Road Initiative and the New International Land-Sea Trade Corridor, the two countries will likely scale up trade and investment in fields like the digital economy, new infrastructure, clean energy, high-end technology and shipping, they said.

Launched in 2017, the New International Land-Sea Trade Corridor is a trade and logistics passage jointly built by provincial-level regions in western China and members of the Association of Southeast Asian Nations. This corridor has developed rapidly over the years, expanding the number of destinations to 338 ports in 113 countries and regions by the end of 2022, according to China Railway Nanning Group, a regional branch of Beijing-headquartered China State Railway Group, the national railway operator.

Feng Hao, a researcher at the National Development and Reform Commission's Institute of Comprehensive Transportation, said Singapore has served as a bridgehead for cooperation between China and its fellow ASEAN members, as it had built itself into a major financial, commercial, logistics and shipping center in Asia.

Limited by land mass and natural resources, Singapore is proficient in the service trade and related industries including logistics, tourism, shipping, healthcare, education, finance and smart city development, said Sang Baichuan, dean of the Institute of International Economy, which is part of the University of International Business and Economics in Beijing.

China remained Singapore's top trading partner in 2022, while their total trade value soared 22.8 percent on a yearly basis to $115.13 billion, data from China's General Administration of Customs showed.

China exports mainly construction materials, machinery, agricultural products, computers, raw materials, electronics, furniture, toys, textiles, garments and household appliances to Singapore. Supported by a strong transit trade development model, Singapore mainly ships electromechanical equipment, plastic, rubber, chemical and mineral products to China.

Driven by the one-year-old RCEP agreement, China and Singapore saw their trade value jump 37.6 percent year-on-year to $14.91 billion in the first two months of 2023, customs data showed.

Singapore has been China's largest source of new investment since 2013. From January to October 2022, the Southeast Asian country's investment in China reached $9.61 billion, up 15.7 percent year-on-year. Meanwhile, China's investment in Singapore amounted to $6.35 billion, surging 27.8 percent on a yearly basis, said China's Ministry of Foreign Affairs.

Singapore surpassed Japan for the first time to become China's largest cumulative source of foreign investment in April 2022. As of October 2022, the country has accumulated investment in China of $130.46 billion, while China's cumulative investment in Singapore stood at $73.55 billion.

Eyeing China's huge market, OSIM International, the Singapore-based health products provider, is aiming at video gaming groups and young people in the country to retain robust growth. It has introduced a number of products to help Chinese consumers relieve shoulder and neck muscle strain caused by long periods of gaming.

Charlie Teo, the group's CEO, said that the economic center is shifting from the West to the East. The RCEP agreement stands to enhance the level of cooperation with member economies and among businesses. "This pact will allow us to consolidate our position ... in the Chinese market," Teo said.

Keppel Land, the property arm of Singapore's multinational company Keppel Corp, is also betting on accelerating urbanization in China to create new sources of growth.

The property company said China is one of the key markets in its global strategy and the market where it has some of the most comprehensive and complete business except from Singapore.

"China is currently undergoing rapid urbanization. Whether it is in emerging cities or for existing projects, there is tremendous development potential," said Wong Liang-Kit, president of Keppel Land China. He noted the company is transforming from traditional property development to new areas of smart city, senior living and sustainable urban renewal.

Taking sustainable urban renewal as an example, China's drive to fulfill its dual goals of peaking carbon dioxide emissions by 2030 and achieving carbon neutrality by 2060 has created a large demand for renovation projects, said Wong.

Eager to cultivate more growth, China and Singapore signed a Memorandum of Understanding on April 1 and announced the substantive conclusion of subsequent negotiations on an upgraded bilateral free trade agreement.

The teams of both sides will continue the follow-up works of legal review and translation of the texts, and fulfill their respective domestic procedures to sign the agreement as soon as possible, said China's Ministry of Commerce in an online statement.

The upgraded China-Singapore FTA, which will boost market access for businesses in both countries, adds a new standalone chapter on telecommunications, and incorporates high-level economic and trade rules on national treatment, market access, transparency and the digital economy, among others.

Signed by China's Minister of Commerce Wang Wentao and Singapore's Minister for Trade and Industry Gan Kim Yong, the two sides confirmed that there will be no rollback of opening-up measures in the service trade and investment sectors.

The FTA is an important measure and practical action by China to align with high-standard international economic and trade rules and opens the country wider to the outside world. It will strongly push China-Singapore economic and trade cooperation to a new level, according to the Ministry of Commerce.

The follow-up works and growing China-Singapore trade volume will not only give full play to the two countries' respective strengths, but help them to respond tangibly to the growth of the BRI and the RCEP, said Zhang Jianping, head of the center for regional economic cooperation at the Chinese Academy of International Trade and Economic Cooperation.

"Singapore has mature business experience in Southeast Asian and South Asian countries," he said. "The joint development of Chinese and Singaporean companies can be a win-win situation in developing third-party markets, using China's capital and technology and Singapore's operational experience and business connections," he added.

China and Singapore signed the FTA in 2008 and upgraded it in 2018. In December 2020, the two sides upgraded the agreement again and launched subsequent negotiations to further liberalize the service trade and investment based on a negative-list model.

zhongnan@chinadaily.com.cn