Member Article

"WHAT BELT AND ROAD SNUB MEANS FOR SINGAPORE’S TIES WITH CHINA"

Thus the headline from the South China Morning Post (SCMP) on 18 May 2017.China had concluded its Belt and Road Forum, to which 29 other heads of government were invited. Only 3 from 10-member ASEAN were excluded: Singapore, Thailand and Brunei. Even smaller nations, with less-established diplomatic ties to Beijing, sent their heads of government. Nations like Chile, Hungary and Fiji, whose 2015 GDP per capita was US $8756.40, roughly one-sixth that of Singapore's.

In news photos, a gleeful President Duterte of the Philippines rubbed shoulders with Malaysia's Prime Minister Najib Razak, possibly sharing a private joke about how they were going to spend all the billions in foreign aid that China has promised.

To appreciate the severity of the breach, it is instructive to understand how deep our ties with China go. The Middle Kingdom's appreciation for Singapore's economic and political model has often been written about. It started with Deng Xiao Ping's admiration for Lee Kuan Yew, and is echoed in Xi Jin Ping's condolence letter on Mr Lee's passing: “Mr. Lee Kuan Yew was an old friend of the Chinese people,” and “Mr. Lee Kuan Yew and the older generation of Chinese leaders jointly set the course for the development of China-Singapore ties.”

These ties resulted in significant mutual investments. In 2014, Singapore was China's biggest investment destination in Asia. More surprising, though, is that Singapore was the largest foreign investor into China in the same year.

But this is what the SCMP article speculates is the problem: while Singapore seeks "economic benefits from China", she relies "on the US for security".

Singapore's Ties With The US

Singapore certainly enjoys warm relations with the US. As a small nation in SE Asia, our very survival has depended on a strong network of international friendships and overlapping interests. As the only remaining superpower after the Cold War, the US was a natural ally.

In August last year, with President Obama still inhabiting the White House and Hillary Clinton widely expected to be its next resident, Prime Minister Lee Hsien Loong made a state visit and was conferred the signal honour of a state dinner.

On the same visit, PM Lee spoke at a dialogue at the US Chamber of Commerce/ US ASEAN Business Council Reception, where he was asked about the South China Sea arbitration in which the tribunal had ruled in favour of the Philippines against China. PM Lee's response was a very measured one: "Ideally, international tribunal rulings set the order for the world because ideally, when you have disputes between countries, it is much better to have an arbitration and adjudication based on acknowledged principles than to fight it out and see whose guns are more powerful. Speaking from the point of view of a small country, this is all the more fundamental important principle…it is an impartial, objective, peaceful way of resolving issues and, ideally, all problems in the world could be settled like that."

Careful not to take sides, he went on to point out that China's stance on the South China Sea dispute was "for a big power, not an unprecedented thing", as even the US has not ratified the United Nations Convention on the Law of the Sea.

Nonetheless, China took umbrage. The Global Times, generally understood to be the mouthpiece of the Chinese political establishment, growled that "Singapore should show more understandings (sic) of China's reactions…it should speak in favour of the South China Sea security rather than making rhetoric that will further complicate and destabilize the region".

Singapore's Relations With China

Since then, ties with Beijing appear to have deteriorated. Late last year, Hong Kong seized 9 Terrex armoured personnel carriers (APC) belonging to Singapore, en route back to Singapore from routine training in Taiwan. Singapore has been conducting military exercises in Taiwan for decades. This was the first time the shipment has been questioned. Although the APCs have since been released, the shipping line, APL, and its captain, have been charged in the Hong Kong courts for failing to have the appropriate licences.

The move has been interpreted by some as a signal from Beijing that Singapore's continued chumminess with Taiwan is regarded with growing disfavor. But China is a past master at subtle messaging, with multiple meanings underlying its actions. It is instructive to note that the Terrex, which is developed by Singapore's own ST Kinetics, is one of the world's 10 top APCs, and the US Marines had, in March 2016, awarded a US$121 million contract to develop the Terrex 2 prototype. This could result in a US$1.2 billion supply contract. Was China's detention of the APCs for several months a symbolic gesture to undermine the value of Singapore's military technology that is being developed for the US?

China has also been using chequebook diplomacy with vigour.

To the Philippines, to whom it lost in the South China Sea arbitration, it has pledged US$24 billion in investment. The inconvenient arbitration award appears to be a hazy memory. China has also bailed Malaysia out of its 1MDB embarrassment and promised US$34 billion in investment. It is the target of such investment that is telling. China is funding the dredging of deep water ports and the building of the East Coast Rail Line that may, if successful, threaten Singapore's position as the world's busiest transshipment hub. While furthering its One Belt One Road objective, there is an uncomfortable hint of menace.

Where China Trumps the US

Singapore has not made any U-turns in our approach to international ties. It is the global stage that has experienced tectonic shifts.

The unexpected victory of Donald Trump in the US elections meant that the US, hitherto the world's policeman, now has a narcissistic and unschooled autocrat as its leader. His penchant for firing people in his previous job has led to the toppling of officials from powerful positions, creating a gap in the administration's leadership. Trump's stated intention to draw back from engagement in Asia has also given Xi Jin Ping an open invitation to build influence in the region. Hence the flexing of China's muscles.

Like a dinner guest who steps away from the table for a few minutes, to return to a room where the atmosphere is suddenly thick with simmering tensions because of an argument that broke out, Singapore has to adjust to a new situation in our backyard and on the global front.

While the international press has been quick to point out the cooling of Sino-Singapore relations, what is the situation behind the scenes? Is China, as it has before, playing a deeper game? It is hoped that the public bluster from Beijing is counter-balanced by a more considered conversation among diplomats behind the bamboo curtain, one where our long-standing friendship with China continues to breed mutual respect and collaboration.

 

 

Footnotes: For more information, please contact: Stefanie Yuen Thio, Joint Managing Director, Head of Corporate [email protected] +65 6216 9494