Keynote Speech by Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong at the FutureChina Global Forum

Mr Lee Yi Shyan, Chairman of Business China, 

Board Members and the Business China team,

My Parliamentary colleagues and Cabinet colleagues, 

Excellencies, 

Ladies and gentlemen, 

1. Good morning to all of you. It is indeed my great pleasure to join you at the 16th edition of the FutureChina Global Forum, organised by Business China. 

2. The theme of this year’s event – ‘The World in Flux: Challenges and Opportunities’ aptly reflects the current state of the world; and the sessions later today cover many of these shifts, including the rise of ASEAN, China’s economic and policy transformation, and the advancement of AI. 

3. But I would like to take this time to look back on 35 years of Singapore-China relations, how the global economy has changed during this period, and outline how we can sustain an open, rules-based global economy in a more contested world. 

Singapore-China relations

4. This year, Singapore and China commemorate 35 years of diplomatic relations between our countries. 

   1. When Singapore and China established diplomatic relations in 1990, the world was entering a new phase. 

   2. The Cold War was drawing to a close, and China was embarking on a path of reform and opening up. Singapore was positioning itself as a global hub. 

   3. Our relations have grown significantly since then. 

      1. Since 2013, China has been Singapore’s largest goods trading partner. 

         1. Last year, bilateral trade amounted to S$170 billion, comprising about 13% of Singapore’s goods trade with the world. 

      2. Since 2013, Singapore has also been China’s largest foreign investor, with cumulative investments to date amounting to S$223 billion.  

      3. Our three Government-to-Government projects reflect how our partnership has evolved alongside China’s developmental priorities – 

         1. From Suzhou Industrial Park during China’s early industrialisation; 

         2. To Tianjin Eco-City as China prioritised sustainable development; 

         3. And to Chongqing Connectivity Initiative, with China’s focus on connectivity and modern services. 

   4. Last year, we elevated our ties to an All-Round High-Quality Future-Oriented Partnership, reflecting our shared ambition to deepen cooperation in the digital economy, green transition and innovation.

How the Global Economy has evolved

5. The evolution of Singapore-China relations over the decades sits within the wider transformation of the global economy. 

   1. In 1995, the World Trade Organisation was formed with 76 members; today, it counts over 160 members, covering 98% of global trade. 

   2. The rules it enshrined – such as non-discrimination; transparency; and binding dispute settlement – gave governments and businesses confidence and certainty that global trade would be governed by rules. 

   3. The results have been notable: 

      1. Between 1990 and 2017, global GDP nearly tripled, while developing countries’ share of exports doubled from 16% to 30%. 

      2. More than a billion people were lifted out of poverty, the fastest reduction in human history. 

      3. Trade has benefited not only developing nations but also advanced economies. Take the US for example –    

         1. Through global supply chains and outsourcing, consumers in the US benefited from more goods at lower prices. 

         2. Trade has also catalysed foreign investment into the US, and allowed US-based producers to access foreign markets. 

         3. Today, the US remains the world’s largest economy, driving consumption, technology and finance. 

      4. Global trade is also central to China’s economic transformation. 

         1. By joining the WTO and opening its markets, China became the world’s factory, contributing to unprecedented growth in global production and supply chains. 

         2. This has in turn enabled Chinese households and workers to enjoy higher standards of living and greater access to opportunities. 

   4. Together, the US and China account for over 40% of global GDP today, and are therefore the twin engines of growth for the global economy. 

   5. But the same forces that created interdependence have also given rise to tensions. In particular, the scale and pace of China’s growth in industrial capacity severely challenged the competitiveness of manufacturing industries in advanced economies such as the US, and created incentives for companies to move production abroad.

      1. According to economist David Autor, between 1999 and 2011, Chinese imports resulted in the loss of about 2.4 million jobs in the US, including 1 million manufacturing jobs, such as in textiles and furniture-making.

      2. These effects were acutely felt by workers in affected industries, and resulted in the devastation of industries which could not transition fast enough. 

      3. As a result, even though trade had led to the creation of many new jobs in the US, the severe dislocations in these industries led to unhappiness amongst many workers.

The Global Economic Order under strain 

6. Today, the global system faces unprecedented strain. 

   1. The WTO has struggled to negotiate new agreements; its dispute settlement mechanism is paralysed; and core principles like the ‘Most Favoured Nation’ treatment are at risk of being eroded. 

   2. We have also seen a sharp rise of protectionist measures, especially in recent months, marked by tariffs, import quotas, export restrictions and investment screening requirements. 

      1. This is in part fuelled by contestation between the US and China, who have in their respective ways turned towards unilateralism. 

      2. For now, the US and China have avoided the worst through a trade truce, but this uneasy equilibrium is fragile. 

      3. If it breaks, and if more countries resort to power-based approaches, we risk a world of fragmented supply chains, rising uncertainty and weaker growth. 

7. There is no going back to the old WTO system of the 1990s; but abandoning rules altogether is far worse. We must therefore do what we can to reform the global, rules-based economic order. 

   1. This is why Singapore has supported ‘flexible multilateralism’ within the WTO. 

   2. The Joint Statement Initiatives – on e-commerce, services regulation and investment facilitation – under discussion at the WTO offer a model by which willing members can move forward together, while keeping the door open to others to join whenever they are ready. 

   3. This pragmatic approach keeps the WTO relevant, and preserves its role as a global anchor for trade and rules. 

8. Alongside WTO reform, plurilaterals play an important role too. 

   1. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Singapore is a founding member, covers nearly 15% of global GDP.

   2. The Regional Comprehensive Economic Partnership (RCEP), led by ASEAN with China, Japan, Korea, Australia and New Zealand, is the world’s largest free trade agreement, covering about 30% of global GDP and a third of the world’s population.  

   3. And earlier this week, Singapore, together with New Zealand, Switzerland, and the UAE, and 10 other small, medium and trade-dependent economies, have announced that we will convene a Future of Investments and Trade Partnership, or FIT Partnership, to work together on areas such as supply chain resilience, investment facilitation, non-trade measures, trade facilitation, and technology. 

   4. These plurilaterals are not replacements for the WTO, but they are pathfinders towards a more inclusive and flexible framework for the global economy. They can pioneer rules on new issues and create benchmarks for future convergence and adoption. 

   5. And together with WTO reform, they help sustain a global economic order anchored in rules, even if in more flexible and diverse forms.

9. At the same time, we must also evolve the rules to be relevant for current realities as well as the future economy. This includes – 

   1. New frameworks for digital trade and data governance, especially with the growing importance of the digital economy;

   2. Coordinated standards for the green transition, so as to support the growth of the green economy, including carbon markets, green and transition finance, and trade in clean technologies; 

   3. Clearer rules and a calibrated balance on industrial policy and subsidies, allowing governments to pursue legitimate economic objectives, without distorting competition; 

   4. And last but not least, standards on new technologies to ensure openness, safety and fairness, especially with advancements in AI and quantum. 

Role of Business China

10. As we chart the next chapter of the global economy, institutions like Business China continue to be essential. 

    1. Since its founding, Business China has nurtured bilingual, bicultural talent; fostered deeper understanding among Singapore businesses of China’s society and economy; and helped Singaporean enterprises seize opportunities. 

    2. As China’s economy transitions towards technology, innovation and green development, Business China can help our businesses identify new opportunities in these sectors and facilitate win-win partnerships with Chinese enterprises. 

Conclusion 

11. The story of Singapore-China relations over the past 35 years is intertwined with the evolution of the global trading system. Both show how openness and rules can deliver growth, stability and prosperity; but they also remind us that the system cannot be taken for granted. 

12. As the international order comes under strain, we must resist the drift towards unilateralism and power-based politics. The future must still be anchored in rules, but rules updated for the realities of our time. 

13. If the global community can reform the WTO, advance practical plurilaterals such as the CPTPP, RCEP and FIT Partnership, and update the rules of trade to reflect the realities of digitalisation, the green transition and new technologies, then we can preserve a rules-based order that benefits all, and build a stronger, fairer and more resilient global economy that will benefit all of us. 

14. Thank you.