Singapore seeks to extend ties in service sector with China

Singapore's Education Minister Tharman Shanmugaratnam has urged the East Asian Institute (EAI) to deepen study on rising China, saying better understanding contemporary China will help Singapore deepen engagement with that country.

"We have to find new areas to collaborate and engage with China on a deeper level. But this is only possible if we have Singaporeans who not only speak the Chinese language, but who also understand the Chinese economy, government, society and culture," Tharman said in his opening address at the EAI's conference, where some of the top scholars gathered to discuss China's direction in the future.

He praised the EAI, which marked 10th anniversary on Monday, the only full-time research institution in Southeast Asia that is devoted to contemporary Chinese studies, has achieved high repute in the past 10 years.

"It is regarded as a place with its antennas well tuned to developments in China, but with a reputation for scholarly objectivity. It has built up impressive networks, both with scholars in China and overseas," said Tharman, also second Minister for Finance.

The EAI's predecessor was the East Asian Institute of Political Economy which was set up in the early 1990s by Goh Keng Swee, former Deputy Prime Minister of Singapore. Tharman said the rise of China and its impact on the world since has proved Goh's foresight right in establishing the institute.

"What happens in China, and how it tackles its problems, will also be of great relevance to the rest of Asia and the world," said Tharman, adding that "I encourage the EAI to build on its track record of objective and rigorous academic and policy- research."

China's rise has been a significant plus for the Singapore economy as well. Trade and investment ties between Singapore and China have been widening.

In fact, on a per capita basis, Singapore must surely be number one in the ranking of China's trading partners and sources of investment, said the minister.

In 2006, Singapore's two-way trade with China reached 35 billion U.S. dollars and Singapore's Cumulative Foreign Direct Investment in China amounted to 28 billion U.S. dollars.

The minister said that Singapore continues to seek ways to extend the scope of relations with China and there is more promise in service sector activities, such as financial services, logistics, environmental engineering, health and education services.

In finance, Tharman said it will benefit both sides if Chinese companies raise capital on the Singapore market, taking advantage of the large pool of international investors here.

"Singapore can complement Shanghai and Hong Kong in this regard, although they will naturally be the primary markets for IPOs (Initial Public Offerings) by Chinese companies. I would not be surprised if the diversification of capital-raising to Singapore and other financial centers would help to moderate the speculative cycles in Chinese stocks," he said.

Singapore's relationship with China extends beyond economic and financial ties. In the area of education for example, more than a third of all Singapore schools now have some form of twinning relationship with Chinese schools.

Singapore is also actively involved in training Chinese officials. According to the education minister, Singapore has trained some 9000 Chinese officials over the years.