What’s in the New China-Singapore Upgraded Partnership?
Plus Anwar's emerging foreign policy; a dangerously close Vietnam-China South China Sea encounter; Southeast Asia in the EU's Indo-Pacific outlook and more.
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This week’s WonkCount: 2599 words (around 12 minutes read time)
What’s in the New China-Singapore Upgraded Partnership?
A new upgrade in Singapore-China relations has spotlighted the granularity of the Southeast Asian state’s approach towards Beijing amid lingering challenges in bilateral ties as well as wider regional and global uncertainties.
What’s Behind It
Singapore and China agreed to an upgrade in ties during Singapore Prime Minister Lee Hsien Loong’s first visit to the country since the pandemic. Details of the new, so-called “All-Round High Quality Future Oriented Partnership” were publicly released by the two sides on April 1, and the upgrade constitutes the first since the institution of an “All Round Cooperative Partnership Progressing with the Times” during President Xi Jinping’s visit to Singapore in 2015. Both sides also inked a series of agreements in various sectors including trade, environment and food security (see table below), with most of them either building off of already ongoing areas of collaboration or showcasing future opportunities. This comes amid an environment of uncertainty for many Southeast Asian states amid the continuing fallout from COVID-19, intensifying U.S.-China competition, Russia’s invasion of Ukraine and anxiety about the state of global economic growth in 2023 and 2024. Singapore has been among the most vocal countries expressing concern about both aspects of China’s behavior on issues like the South China Sea and U.S. approaches on areas such as free trade.
The upgrade comes as Singapore looks to further reinforce ties and China looks to showcase its economic influence as it reopens. Singapore has long sought to develop close economic links with China but has also been on the receiving end of coercion by Beijing over the past few years for aspects of its behavior, with the most high-profile, publicized examples including the seizure of armored vehicles in 2016 and foreign interference which Lee mentioned generally in the Chinese segment of his National Day remarks last year. China for its part has been looking to highlight how it is advancing ties with the region and the world via the recently-concluded China Development Forum and the Boao Forum, be it positive messages on the former like the list of U.S. companies attending and the IMF statistic that a 1 percent growth in China’s economy is a 0.3 percent average boost for other Asian economies; or the level of Southeast Asian representation in the later, including Lee, Malaysian Prime Minister Anwar Ibrahim, ASEAN Secretary-General Kao Kim Hourn and Cambodian Commerce Secretary Sok Sopheak.
Why It Matters
The upgrading, and Lee’s visit more generally, speak to the granularity of China-Singapore ties, particularly in the economic domain despite lingering challenges. For instance, the first leg of Lee’s trip included a visit to the headquarters of the Chinese autonomous driving startup WeRide, which could start testing self-driving vehicles in Singapore later this year, and the China-Singapore Guangzhou Knowledge City, where he heard from Singapore businesses on opportunities in sectors like digital, agri-tech, sustainable energy, and biomedicine. Ahead of the trip, which also included stops in Hainan and Beijing for other official engagements, Lee noted in a CCTV interview several key government-to-government projects undergirding the economic aspect of China-Singapore ties, including the Suzhou Industrial Park, the Tianjin Eco-City and the Chongqing connectivity project.
The upgrading does not detract from lingering challenges in Singapore’s ties with China, or its efforts to address them. Close observers will note that Lee also subtly noted these on engagements tied to his China trip, be it his reference to the need for openness to outside powers engaging the region in his Boao Forum speech or the reality that progress on economic ties in ASEAN-China ties depends on the management of wider political and security issues in his CCTV interview. Singapore, which already hosts a regional U.S. maritime presence dating back to the closure of Philippine bases at the end of the Cold War and is among the top buyers of U.S. military equipment, has also continued to step up cooperation with Washington. During Lee’s White House visit last year, both countries agreed to boost collaboration across a wide range of areas such as space, cyber, artificial intelligence, infrastructure, and supply chains, in addition to aligning on regional and global issues from Myanmar to Russia’s invasion of Ukraine (Singapore is the only Southeast Asian country to impose unilateral sanctions on Moscow to date).
Where It’s Headed
With the new upgrade now publicly announced, the emphasis will shift to any subsequent follow up steps thereafter. For instance, the statement between the two sides on the upgrade notes that both sides will be signing an agreement following the closure of subsequent negotiations on the China-Singapore Free Trade Agreement “as soon as possible this year.” Both countries will also likely reveal more specifics over time about how they are moving forward on deepening collaboration on sectors in line with the “high-quality” and “future-oriented” nature of the upgraded partnership, such as green and digital economy and food security.
Indonesia’s ASEAN Chairmanship and the Indo-Pacific; Myanmar’s Coming Election; China’s Laos “Bailout” in Perspective
“Rescue financing can also come in the form of equity investments in distressed projects like China’s investment in the electricity grid of Laos in 2020,” notes a new report by AidData on China’s international rescue lending operations in 22 countries in the 21st century, including Laos which has been among the countries said to be at a risk of potential default with high indebtedness to Beijing. The study finds that China spent $240 billion bailing out these countries between 2008 and 2021, with almost 80 percent of this occurring between 2016 and 2021 as some projects fail to pay dividends. The study focuses on three specific crisis management instruments used by Beijing: short- and medium-term loans by state banks; deposits at foreign central banks; commodity prepayment facilities; and currency swap drawdowns from the People’s Bank of China bilateral swap line network (on the last instrument, the study distinguishes between use for macroeconomic distress and other trade and investment purposes as in the cases of Malaysia, Singapore and Thailand).
“ASEAN looks forward to concrete and tangible projects, programs or activities that could be conducted in the region,” notes Indonesia’s permanent representative to ASEAN Ambassador M. I. Derry Aman on Indonesia’s vision for mainstreaming and implementing the ASEAN Outlook on the Indo-Pacific during its chairmanship this year in an interview in the latest issue of ASEAN Focus. The interview notes Indonesia’s plans for the AOIP, including the organization of the ASEAN Indo-Pacific Forum (AIPF) to implement AOIP with four flagship events: an ASEAN Youth Dialogue and Digital Development for Sustainable Development Goals; an ASEAN Business and Investment Forum; an ASEAN Infrastructure Forum and an ASEAN Creative Economy Forum. It also discusses other chairmanship priorities, such as Myanmar and the Five Point Consensus and advancement in the admission of Timor-Leste to ASEAN. The full online version of ASEAN Focus is available here.
“The lead-up to the polls will almost certainly see a further increase in violence and instability,” notes a sobering new report by the International Crisis Group on potential elections in Myanmar. The report goes into several angles that make the holding of elections a particular challenge in what it terms a “road to nowhere”, including the military’s need to impose polls via a mix of pacification of areas out of its control and intimidation of poll workers and voters; the will of resistance groups to disrupt the vote; and Min Aung Hlaing’s personal unease about the post-election landscape and his own political role in it. You can read it in full here.