Speech by Minister Chan Chun Sing at the Dialogue on the Joint Building of the China-Singapore CCI-ILSTC

Chongqing Mayor Mr. Tang Liangzhi,

Ladies and Gentleman,

Good morning,

Global Context

1. I am pleased to join friends from ASEAN and China today as we start off 2019 by taking stock of our directions for the Chongqing Connectivity Initiative (CCI) and the CCI-New International Land-Sea Trade Corridor (CCI-ILSTC), amidst the current global and regional economic backdrop.

2. The global economic and trading system is under stress. Similar to a pivotal moment in history almost 100 years ago, today all countries have to collectively decide if we would press on with greater integration, or go down the path of protectionism and unilateralism.

3. The free flow of trade, talent and other factors of production allow us to make use of our respective comparative advantages to improve and uplift the livelihood of our people. But we must also make the effort to help our people adjust to the competition and disruption, and ensure that those who are falling behind – absolutely or relatively - can keep pace with those who are ahead, so that societies do not fracture. Countries  that are unable to help the slower ones keep pace with the faster ones will inevitably face backlash.

4. The apparent gains from protectionism and unilateralism are short term. But it is tempting for people to believe – and for populist leaders to promise them – that it is possible to take the easy way out by hiding behind artificial barriers to competition, and thereby hoping to avoid making the difficult and necessary adjustments in the face of technological disruptions. 

5. The choice between these two options – global integration and local protectionism – will be defined by the type of leadership. It is with this common belief in bringing benefits to our people through greater integration that Singapore and China have worked hand in hand to ensure that we maintain and uphold the momentum on greater global integration. Over the  past year, Singapore and China have worked together to upgrade the China-Singapore Free Trade Agreement (CSFTA). We have also worked closely to bring about substantial progress to the Regional Comprehensive Economic Partnership (RCEP), and hope it will make further progress towards conclusion. We have continued to step up our bilateral co-operation in Government-to-Government projects and other platforms in Suzhou, Tianjin, Chongqing, and Guangzhou, amongst others.

6. Indeed, it is this spirit of constantly looking at deepening our links, complementing each other’s strengths, and creating more opportunities for our people, that has defined Singapore-China relations even before we established formal diplomatic ties in 1990. 

CCI – ILSTC

7. The CCI and CCI-ILSTC testify to our desire to improve connectivity and integration to better leverage our comparative and collective strengths to develop our respective economies. The overall framework and guiding principles of the CCI-ILSTC have been well established. Our focus this year is to deliver concrete results and push the boundaries for the next lap of integration.

8. Let me first recap the design parameters for the CCI-ILSTC framework. First, unlike an industrial park or an eco-city, the CCI is not a conventional geographically bounded project. Instead, the CCI aims to catalyse the economic growth of an entire region of Western China by enhancing connectivity within the region, between the regions, and with the world. When we first participated in this project, we set a goal to catalyse the development of Western China as part of the overall China economic masterplan. To achieve this, we needed to do two things. First, we must make sure the cost of financing projects and businesses in Western China is comparable to the coastal provinces. Second, we must be able to find a way to connect Western China to the rest of the world through the fastest and cheapest possible way. We must find a way to break the bottle neck at the Three Gorges Dam. The capacity of Western China will then not be constrained by the capacity of the Three Gorges Dam. This is why we developed the CCI-ILSTC which substantially reduced the duration and cost of transporting products, and goods can reach Southeast Asia at one third of the duration compared to the previous route through Shanghai. 

9. Second, the CCI seeks to improve traditional multi-modal connectivity offered by air, land, sea and river links; as well as modern dimensions of connectivity such as data, talent, technology and finance, to lower the cost of doing business and catalyse the wider economy. And at this point in time, I would like to emphasize the choice of the word “new” in the CCI-New International Land-Sea Trade Corridor (ILSTC). 陆海新通道， 取名为新通道有它特别的含义。新不只是指这是个新的通道，新也包含着其他的元素，超越了以往的传统运输模式，例如金融、人才、科技和数据。 (Translated: the word “new” not only refers to a new corridor, it also highlights the new dimensions to our collaboration. - . In today’s modern economy, freight and logistics flow are never done alone, they come with supporting financial flow and data technology.) This is the reason why in my discussion with Party Secretary Chen Min’er yesterday, we talked about this – how to use freight and logistics as a core and yet surround this core with the modern dimensions. This is also the reason why I brought along many companies doing new services from Singapore to find new partners in the Western China provinces. 

10. Third, the CCI – ILSTC works best as an open and inclusive platform. It is not a zero sum game. It is not about Chongqing building the rail line and other people having to compete to build their own network. It is most important for all of us to come together to use the same network. The more partners we have, in terms of companies, provinces and countries, the greater the benefit for everyone. The more the number of people using the network, the greater the efficiency, the faster we can lower the cost of using this network, the better we can realise our vision of making sure that the transport and logistic cost in the Western provinces are comparable to those in the coastal provinces, so that we unleash the potential of the entire Western China. This is why we are pleased to see many companies participating in the Singapore and Chinese joint ventures, namely the Chongqing Logistics Development Platform (CLDP) and the Multi-Modal Distribution and Connectivity (DC) Centre. I am also happy to attend, together with Mayor Tang yesterday, the ground-breaking ceremony of the DC Centre. This is also why we are happy to welcome the four new partners (Qinghai, Yunnan, Ningxia and Xinjiang) to join us. 

11. Today, we are also happy to see the participation of many ASEAN countries in this forum. This is a clear demonstration of how we intend to continue to expand the network of companies, provinces and countries, to bring alive the concept of the CCI-ILSTC in line with President Xi’s vision of connecting the Belt and Road Initiative in a tangible way to deliver tangible results to improve the lives of our people. 

Way Ahead

12. This year, beyond the top-level design, we will now intensify our efforts on delivering the critical last mile connections. In terms of hardware, we must step up our efforts to connect the road, rail and sea transport, to make the network truly seamless. I am happy to hear of the ongoing efforts by Qinzhou and Guangxi to close the last mile gap between the rail and the port. By expanding the railroad by another kilometre or so, the goods will then not be required to be transferred to the truck and this will reduce the duration required. I am also glad to see the progress made by the Joint Ventures between the Singapore and Chinese companies. And like I mentioned earlier, we are happy to witness the ground-breaking ceremony yesterday. And I hope in two years or so, Mayor Tang and I can witness the opening of this DC Centre and this centre will be key in the entire network. 

13. In terms of software, we must intensify our efforts to promote the exchange of data seamlessly, not just between the customs authorities but also between our companies. PSA International has briefed me on some of their ideas to standardise the data to facilitate more seamless exchange.  There is great potential for us to work on this. Let me give you an example to further illustrate. In the 1970s, there was a breakthrough in the global shipping community when we started using the standardised 20-foot and 40-foot container boxes. Today, the 20-foot container is the de facto standard. In the 21st century, 50 years on, we now need to think of how to standardise the data exchange to facilitate the next generation of trade, so that data generated by the companies will be in the same format and seamlessly transmitted to other companies, other custom authorities, other provinces and other countries. This is why Singapore is promoting the use of our open Networked Trade Platform. This will help standardise the flow of data and support the trade flows and reduce the cost. Today, when Mayor Tang and myself look at the seven-day journey from Singapore to Chongqing, we actually need less than seven days. Some of the time, about one or two days, often due to friction in transmitting of data between the customs and the company, between company and company. Once we resolve this, we can bring down the duration required and cost. And if the eight partners come on this platform, it will have a catalytic effect on the overall network. So it is not just about connecting the physical hardware, but it is also about connecting the data network. 

14. As trade grows, the financial needs of our businesses will grow as well. I am happy to note that Chongqing has used up the foreign debt quota of US$3 billion allocated by the central government ahead of time. This is to us a happy problem. We will work with the central government to see how we can expand the quota, develop new financing models, and encourage even more Chinese companies to leverage Singapore’s financial capabilities to expand in the region and beyond. To further enhance financial linkages, Singapore companies are also prepared to contribute to expanding the range of financial services offered by Chongqing.

15. We should also build stronger ties between our people. Last year saw the launch of the human resource development programme between Singapore’s Ministry of Foreign Affairs and Chongqing Organisation Department. I hope that improved connectivity will encourage more people from Chongqing and Western China to visit Singapore, and likewise for more Singaporeans and people from Southeast Asia to learn more about the provinces along the CCI-ILSTC. And as I was sharing with Mayor Tang yesterday, this is not just for today’s business, this is also important for the next generation of young people from China, Singapore and the region - to grow up knowing and understanding each other. This will establish the foundation for the next generation of connectivity between Singapore and China. Without that kind of mutual trust, it will be very difficult for us to come together for businesses. This is similar to how Mr Deng Xiaoping and Mr Lee Kuan Yew established the trust 50 years ago for us to benefit today. 前人种树 后人遮荫, we today benefit from the trees planted by earlier generation and it is our responsibility to similarly plant even more tress to benefit the next generation. 

16. To all our friends from ASEAN present today, we would like to welcome you to use the CCI-ILSTC as well. What used to take three weeks to reach Chongqing from Southeast Asia, via the Yangtze River, now takes one week or less through a combination of sea and rail links, at roughly the same cost. This has opened up tremendous opportunities for new products, including perishable produce. As we build up economies of scale and improve the rail links, cold chain capabilities, shipping frequencies, and custom processes, I am confident we can bring down the time required and cost even further. 

17. Just as for the Belt and Road Initiative, we must make sure that we maintain market discipline to deliver the outcomes we want. Each project must be robustly evaluated based on market principles, and executed diligently with an eye to long term sustainability and accountability. Only then will we benefit the stakeholders and inspire confidence for more partners to join us. 

Conclusion

18. Ladies and Gentleman, colleagues and friends, we have over the last few years established a clear framework for the CCI-ILSTC. Now is the time for us to strengthen this network by bringing in more partners, closing the last mile in physical and non-physical connectivity, and continually planting the seeds for the next step for integration, to bring the connectivity between Western China and the rest of the world to the next level. Ultimately, progress in this project will not only bring about better quality of life for the people, it will also be a powerful testimony to our belief in the benefits of connection and integration to bring out the best in each other, to leverage the best from each other. On that note, I would like to thank Mayor Tang and his team, I would like thank all the partnering provinces and the companies, in helping us to realise this vision. 

19. I would like to end with a short story. When Vice Premier Han Zheng recently visited Singapore, PSA gave him a briefing on the Belt and Road Initiative. After listening to the briefing, he took a pen and went to the map to draw a link between the Belt and the Road that showed the CCI-ILSTC route. This route linked Chongqing to Qinzhou port in Beibuwan and Southeast Asia, and he said this is a clear manifestation of how we bring tangible benefits to the people of China and the world by connecting the Belt and the Road.  These are wise and important words for us to remember as we continue to embark on this project. 

20. Let us join hands to make this a success. Thank you very much.