Singapore’s Spats with China Have not Done Lasting Damage, but OBOR Could

By David Lee Soong Wei —

Singapore harbor. Singapore’s recent friction with China has overshadowed concerns about how China’s One Belt One Road initiative will shape Singapore’s economic future. Source: Whitecat.sg’s flickr photostream, used under a creative commons license.

During the latest One Belt One Road forum, heads of state from around Asia gathered in Beijing to renew their commitment to China’s ambitious, globe spanning infrastructure plans. This marks one of China’s highest profile initiatives. As Chinese president Xi Jinping reaffirmed China’s support of free trade and globalization (and as the United States appears increasingly inward focused under President Trump), China appears to be priming itself for the role as the de facto global economic superpower. However, Singaporean prime minister, Lee Hsien Loong, was conspicuously absent from the forum. In his place, China invited Minister Lawrence Wong, Singapore’s Minister for National Development.

Some Singaporean commentators read this as a message from Beijing, that Singapore’s relationship with China was fraying. This snub comes on the heels of several diplomatic kerfuffles between Beijing and Singapore, beginning with Singapore’s vocal support for the ruling under UNCLOS which rejected China’s claims to the South China Sea in 2016. This was followed by the seizure of several Singaporean Armoured Personnel Carriers (APCs) from a Hong Kong port in late 2016 (after a flurry of diplomatic meetings, said APCs were returned to Singapore). Some commentators in Singapore have taken this sequence of events to weave a narrative to indicate Singapore’s growing isolation from China. Dr. Chee Soon Juan, leader of the Singapore Democratic Party (SDP) and long-time opponent to Prime Minister Lee, has taken to calling Singapore’s policy towards China as an “inconsistent cobbling of positions”, and overly influenced by American foreign policy goals. Singapore, to a few online commentators, is being increasingly left out in the cold by China in a time when closer relations are becoming even more crucial.

Lee’s snub aside — the simple narrative that China and Singapore’s diplomatic relations are drifting irrevocably apart is a dramatic oversimplification, and fails to take into account several key indicators of a strong relationship, one that should not be taken for granted, but one that will see through this diplomatic hiccup. On June 12, China and Singapore’s foreign ministers met to discuss Singapore’s role within China’s OBOR ambitions. Singaporean Foreign Minister Vivian Balakrishnan even offered Singapore’s financial industry to help bankroll the OBOR project. While China’s Foreign Minister, Wang Yi mentioned the tensions during their meeting, he emphasized the importance of cooperation between the two countries. On May 16, Prime Minister Lee met with Central Organization Department Minister Zhao Leji of China and they both reaffirmed the strong relationship that exists between both countries, while confirming Singapore’s participation in the OBOR forum.

Moreover, Singapore still maintains their deep rooted economic links with China, China remains Singapore’s largest trading partner in terms of value of goods, and China is a recipient of nearly $1 billion in foreign investment from Singapore. Many industrial cities in China owe their creation to Singapore’s assistance, such as the Sino-Singapore Tianjin Eco-City, which has attracted billions of dollars’ worth of investment worldwide.

Historically, Singapore stood by China following the Tiananmen Square incident, while most of the world froze China out diplomatically. China still conducts military training with Singaporean armed forces and Singapore even allows China to use Changi Naval base (famous for being made to fit U.S.  naval ships) as a refuelling depot. Arguing that Singapore risks being alienated from China due to the events of the last year is myopic.

While Singapore’s relations with China will get through this blip, it remains unclear if the One Belt One Road initiative will be beneficial for Singapore’s economic well-being. While Singapore promises to support OBOR initiatives with its finance industry, why should Beijing look to them for financial support when banks in Hong Kong and mainland China would be able to provide the same services, and have more experience working with Chinese firms? But more importantly, Singapore is one of the largest trade economies in the world, with trade outflows accounting for more than four times its gross domestic product in 2011. The One Belt One Road initiative aims to improve and build infrastructure in the region, including port facilities that would compete against Singapore’s ports.

While some commentators view that it would take decades for the ports to displace Singapore’s position as the center of a global trade network, the real concern is that alternative port facilities will slowly wean Singapore away from being the center of trade, inexorably weakening their economy. Retaining a strong relationship between leaders, as well as maintaining a high level presence at events such as the forum would permit the Singaporean government to ensure it is fully aware of the situation, and allow for them to plan accordingly, to ensure Singapore maintains its essential role as the center of trade in Asia.

Mr. David Lee Soong Wei is Singaporean national and a former intern at CSIS, and a recent graduate from The George Washington University with degrees in Asian Studies and International Affairs, concentrating in International Economics.

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