Speech by Mr Chan Chun Sing, Minister for Education, at the FutureChina Global Forum 2021

Published Date: 12 July 2021 08:00 PM

News Speeches

Deepening ASEAN-China Economic Cooperation:
Destiny or Strategic Choice?

Introduction

1. Distinguished Guests, Ladies and Gentlemen, good evening.

2. It is a pleasure to join you today at the FutureChina Global Forum. This is a year of great significance as it marks the 30th anniversary of the establishment of ASEAN-China dialogue relations.

3. Over the last decade, ASEAN-China trade and investments have more than doubled1.

4. Now, the question is if this trajectory will continue in the face of the disruptions brought about by:

  1. COVID-19;
  2. Technological changes;
  3. Evolution of business models;
  4. Evolution of global supply chains; and
  5. Fluid geopolitical dynamics.

5. Today, I will first examine two assumptions, before discussing the work needed going forward, if we are to achieve even tighter economic linkages between ASEAN and China:

  1. The first commonly held assumption is this: Geography is Destiny.
  2. The second commonly held assumption is that Demography is Destiny.

Assumption 1 – Geography Is Destiny?

6. Let us first examine the assumption that Geography is Destiny. Historically, geographical distances have shaped economic cooperation. By virtue of Southeast Asia's geographical position, goods, capital, people and culture have flowed between Southeast Asia and China for thousands of years. Physical proximity was a natural enabler of the development of interdependencies.

7. But three factors have changed and challenged this commonly held assumption.

8. First, connectivity, especially new dimensions of connectivity, and the ease of connectivity may be the real determinant of economic relations, rather than geography per se.

  1. The cost of transportation has come down with technological advancements.
  2. Thereby blurring geographical boundaries; and enabling new, and wider connections.

9. Second, new modes of connectivity have emerged. The modern economy rests on digital connectivity – for example, 24/7 online commercial and professional services – which transcends geographical distances. Where COVID-19 has created physical separation, it has also deepened digital connectedness.

10. Now, third, in this light, the non-physical dimension of connectivity of rules and regulations has become even more important. They form the basis of economic cooperation and when businesses consider the issue, they commonly ask: are we on the same standards, the same platforms, and are we on the same trade agreements?

11. Therefore, while geographical proximity can promote interdependencies, it alone will not ensure sustained economic cooperation.

Assumption 2 – Demography Is Destiny?

12. Let us look at the second commonly held assumption that Demography is Destiny. This assumption is not without valid reasons - demographic forces can drive economic cooperation.

13. China is ageing fast. Its labour force is becoming more educated and skilled.

14. On the other hand, ASEAN has a young population and workforce. Its growing middle class is a sizeable market.

15. There is therefore great potential for both parties to leverage the complementary demographics for markets and production.

16. The exchange of skills and technology will further enhance these complementarities.

17. It will certainly be the case as China embarks on the next phase of its economic development, which is to go beyond China, as we commonly say "走出去". Chinese enterprises nowadays want not just to be seen as Chinese companies, but as global companies.

18. However, this assumption is also not a given:

  1. First, the theory that labour-intensive industries will naturally re-locate to labour-rich countries will be increasingly challenged.
  2. The operating context and demands on companies today are different. Many are pivoting to high-tech, and high-value goods and services. Mass production is giving way to mass customisation. Automation, access to skilled labour, Intellectual Property (IP) protection, and the ability to mobilise talent and capital will become more important factors as to where companies site their investments and productions. Quantity of labour alone will not be sufficient.
  3. Now, the market for labour and capital is also increasingly global, rather than local or regional. Hence, both ASEAN and China must find and develop new complementarities beyond labour supply or labour costs.

Advancing Asean-China Economic Cooperation

19. From the above, you can surmise that I do not see geography or demography alone as destiny. While they do provide fertile ground for closer integration of the regional economies, we must not take this for granted.

20. Today, China has evolved into a key engine of global economic growth. It is seeking to diversify and strengthen its economic resilience through its dual circulation strategy. It is also seeking to secure its supply chains and its associated networks. As these networks go beyond China or the region. It is a global supply chain network and a global value chain network that China seeks to secure.

21. ASEAN is also working on diversifying our sources of growth, markets and supply chains. Both ASEAN and China are looking for new growth areas in the 4th Industrial Revolution. So how do we seize these opportunities in this current environment for both China and Singapore, and for both China and ASEAN? I would like to suggest a few considerations.

22. First, adopt a long-term view. Different countries will have different priorities at different points in time. To meet evolving economic priorities, countries will look towards trusted partners in a world of flux and uncertainties to secure their IP and supply chains.

23. They will look for partners who can invest in them for the long term and have a vested interest in mutual success. These will be partners who adopt a "Prosper thy neighbours" policy, rather than those who extract or exact the maximum short-term interests for themselves.

24. Second, we can build an open and inclusive regional economic architecture. Countries, including member states of ASEAN, will want to learn from different partners and have a diverse portfolio of partnerships for greater resilience.

25. The region and China will need to work together to broaden and deepen the network of trade agreements to connect their supply chains and value chains so that both sides can be more competitive globally because the competition is not local or regional, but global. To this end, Singapore looks forward to the timely ratification and entry into force of the Regional Comprehensive Economic Partnership (RCEP).

26. Third, we need to foster deeper interoperability. We need to be able to work with one other easily, efficiently and effectively. And not just in terms of hardware, but more importantly, in our rules and regulations, as well as the use of software and data. Going forward, Digital Economy Agreements, which build on the network of Free Trade Agreements (FTAs), will be key enablers for the new generation of trade and commerce for our businesses.

Conclusion

27. Going forward, common standards in IP protection, legal standards, financial standards, will all become even more important in the interoperability of the economies in the region and China. So, the world has become more complex. Today's complementarities may not always suggest tomorrow's supply and value chain integration. Linear trajectories of growth in trade and integration is no longer a given.

28. Bilateral and multilateral partnerships will have to be underpinned by consistent efforts to find new areas of growth and complementarities.

29. Therein lies our collective work as a region and I am confident that ASEAN and China will be able to find common ground in our priorities - both current and new priorities, and forge a fruitful and mutually beneficial relationship going forward. Let me conclude with the following:

  1. The history that we have forged did not come by chance.
  2. The future that we are striving towards is not predestined.
  3. With mutual trust, and on the basis of a mutually-beneficial relationship, we are confident that the prospects for advancing ASEAN and China economic cooperation are bright.

30. Thank You.


Footnotes
  1. Based on data published by Aseanstats, total trade in goods between ASEAN and China grew from USD 235 billion to USD 508 billion from 2010 to 2019. In the same period, FDI flows from China to ASEAN grew from USD 3.6 billion to USD 8.9 billion. Based on data published by MOFCOM (statistical bulletin of FDI in China), from 2009 to 2019, FDI flows from ASEAN from China grew from 4.6 to 7.8 billion.


亚细安与中国经济合作:命中注定或是策略决定?

引言

1. 各位嘉宾、女士、先生,大家晚上好。

2. 今天,我很高兴能和大家一起出席"慧眼中国环球论坛"。今年是亚细安与中国建立对话关系30周年,意义重大。

3. 在过去十年,亚细安与中国的贸易和投资往来增长了超过一倍。

4. 基于以下的原因,这种发展趋势是否会持续,值得进一步探讨:

2019冠状病毒疫情;
科技变革;
商业模式的演变;
全球供应链结构的演变;以及
地缘政治的不确定性。

5. 如果中国与亚细安要实现更紧密的经济联系,我们首先必须分析以下两个假设,然后再讨论接下来需要进行的工作:

假设1:地理环境决定命运?
假设2:人口结构决定命运?

假设1 – 地理环境决定命运?

6. 让我们首先分析地理环境决定命运的假设。从历史上看,地理的距离促成了经济合作与发展。由于东南亚的地理位置,这数千年来,东南亚和中国之间的商品和资金、人民和文化的往来从未间断。地理位置上的接近,很自然的促成相互依赖的关系。

7. 可是,有三个因素挑战并改变这一假设。

8. 首先,联通性以及联通的便捷可能已成为真正的决定因素,而不是地理条件。

  1. 交通成本随着科技的进步而下降。
  2. 因此,地理界限变得模糊;这促成我们与新的、更广的以及更遥远的地区建立联系。

9. 其次,新的联通模式应运而生。现代经济依赖跨越地理距离的数码联通性,如全天候24小时开放的线上商业和专业服务。所以,2019冠状病毒疫情虽然使人与人之间在实际空间上产生距离,却深化了数码联通性。

10. 第三,从这个角度来看,制定联通性的规则和条例变得更加重要。它构成了经济合作的基础。企业一般的考虑包括:我们设立的标准、提供的平台和制定的贸易协定是否一致?

11. 因此,虽然地理位置上的接近可以促进区域间相互依赖的关系,但光靠这一点不能确保区域经济合作的可持续性。

假设2:人口结构决定命运?

12. 第二个假设是人口结构决定命运。这个假设有一定根据 -- 人口因素确实有潜力推动经济合作。

13. 中国的人口正在迅速老化,其劳动人口的教育及技术水平正不断提升。

14. 另一方面,亚细安拥有年轻的人口和劳动队伍,其稳步增长的中产阶级是一个庞大的市场。

15. 双方的人口结构自然形成了互补,为彼此的市场和生产提供了巨大的合作潜能。

16. 技术和科技的交流也将进一步加强这种互补关系。

17. 随着中国的发展进入下一个阶段,中国企业"走出去"的步伐势必加快,中国公司不但要成为中国企业,还要晋升为全球企业。

18. 然而,这个假设也受到质疑:

  1. 首先,我们一向认为劳动力密集型产业会自然转移到劳动力资源丰富的国家。然而,这个想法越来越引起争议。
  2. 在现今社会,公司运作的环境与需求已发生转变。许多公司将目光投向高科技、高价值的商品和服务,"大量生产"已逐渐被"大量客制化"取代。公司在考虑何处落脚,何处投资时,将越来越重视自动化、熟练劳动力的供应、知识产权保护,以及调动资本和人才的能力。光有庞大的劳动队伍将是不足够的。
  3. 其次,劳动力和资本市场也日益从区域走向国际。因此,除了劳动力供给或劳动成本,中国和亚细安双方都必须探索、发展新的互补关系。

推进亚细安与中国的经济合作

19. 我认为无论是地理环境还是人口结构,都无法单一决定未来发展。实际上,这些因素所提供的,是区域经济体进一步融合发展的契机。

20. 中国已经成为世界经济增长的重要引擎,并且通过国内国际双循环战略使其经济增长动力更加多元,增强经济发展的韧性。同时,中国也在力求提升产业供应链的自主可控和稳定性。

21. 亚细安也在实现经济增长来源、市场、供应链的多元化。面对第四次工业革命,亚细安和中国都在寻找新的发展领域。那我们要如何在这样的大环境把握机遇呢?我想提出几个可行的方法。

22. 首先,要把眼光放远。不同的国家在不同的时间点上会有不一样的需求。世界局势瞬息万变并充满未知,各国因自身不断变化的经济需求,必然会寻找可信赖的伙伴,以确保其知识产权和供应链的安全性和可靠性。

23. 它们将寻找能够进行长期投资的合作伙伴,并培养以互惠互利为前提的伙伴,摒弃只着眼于短期利益的伙伴。

24. 其次,建构一个开放而且具包容性的经济架构。各国, 包括亚细安成员国,都会希望与不同的伙伴相互学习,建立多元的伙伴关系,并以此加强自身的韧性。

25. 亚细安和中国必须合作,拓宽并深化彼此之间的贸易协议网络,连接我们的供应链和价值链,加强我们的全球竞争力。因此,新加坡期待及时批准和落实《区域全面经济伙伴关系协定》(RCEP) 。

26. 第三,培养兼容性。各国之间进行合作,必须简单有效。我指的不只是硬件,还包括各项条例和规则,以及数据和软件的使用。在自由贸易协议框架下的数码经济协议有利于企业数码化,并且带动区域数码经济的发展。

总结

27. 世界已变得更加复杂。今日的互补关系不一定意味着未来供应链和价值链的融合。贸易增长和一体化的线性发展趋势已不再是必然的。

28. 要维系双边及多边合作关系,就需要各方不懈努力,不断寻找新的发展领域,开拓新的互补关系。

29. 我相信,亚细安和中国能够根据各自的发展重点与需求找到共同点,并且在未来继续建立互惠互利的伙伴关系。亚西安和中国的经济合作关系可以用四句话来总结:

历史并非偶然,
未来不是必然,
秉持互信互惠
前景必定生机盎然

30. 谢谢。

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