China and the World

Lee visits Xi

Lion State leader travels to Beijing to rebuild relations after rift

Singapore-China-w

Lee Hsien Loong shakes hands with Chinese President Xi Jinping

It wasn’t that long ago that China, home to 1.38 billion people, was open in its admiration for tiny Singapore – a standout example of a country that had achieved advanced economic status under the long-term rule of a single political party.

Teams of Chinese officials were dispatched to study the city-state’s methods of “good governance”. Singapore’s founding father Lee Kuan Yew famously rejected “Western” ideas on universal values and said countries like his needed to be built on “Asian values”.

Not surprisingly, Chinese leaders such as Deng Xiaoping felt very comfortable doing business with him. Lee helped open up China’s economy and brokered a rapprochement between Beijing and Washington in 1972.

Yet as tensions between China and the US have risen in the last few years, relations between Beijing and Singapore have also deteriorated.

Last week, Lee’s son and the current prime minster of Singapore, Lee Hsien Loong, visited China to help mend faltering ties.

“From Singapore’s point of view a strong prosperous China at peace with its neighbours is good for China and good for the world,” he said before the three-day trip.

Relations had worsened after a United Nations tribunal – convened to adjudicate on Chinese island-building in the South China Sea – had found in favour of the Philippines last summer on a sovereignty question. Beijing vehemently opposed the ruling (and ignored it).

Though Singapore wasn’t a claimant in the case, controversy erupted when the Global Times editor Hu Xijin ran a report claiming that Singapore had raised the issue at a Non-Aligned Movement Summit in Venezuela, saying the country had “stirred up problems” over it. Singapore’s ambassador to China, Stanley Loh refuted the report as “false and unfounded” in an open letter to the Global Times, but this then sparked a further war of words with Xu. The editor of the state-backed newspaper wrote online: “I think Singapore should feel ashamed when you tried to trip up China, your largest trading partner.” (Loh wrote yet another open letter to the Global Times in response.)

This could hardly escape the attention of other media sources, with the South China Morning Post headlining one article on the spat: “How China is using its Global Times attack dog to intimidate Singapore.”

Further evidence of tension had also emerged late last year when nine armoured vehicles belonging to Singapore were seized in Hong Kong. The tanks were en route from Taiwan, where Singapore has been sending its troops to train under a 1974 deal known as Operation Starlight. The vehicles were eventually returned, but the message was clear enough: Beijing wants Singapore to end any further military cooperation with Taipei.

Increasingly the Chinese government feels that Singapore should be more pro-China diplomatically or at least refrain from speaking out on issues that impact China’s “core interests” – i.e. in the South China Sea.

Beijing also feels Singapore could have done more to support its interests within ASEAN – the 10-member body of Southeast Asian nations which includes many of the countries which oppose China’s nine-dash line that lays claim to much of the South China Sea.

Singapore assumes the presidency of that organisation next year and Beijing has urged the Lion State’s officials to stay out of its maritime disputes. A statement released by China’s foreign minister during Lee’s visit said “both sides should uphold mutual understanding and respect and support each other on issues of core interests and major concerns”.

According to Chinese media Lee has been given an unusually high-level reception by Beijing. The state broadcaster even allocated seven minutes of one of its prime-time newscasts to cover Lee’s activities in China. Four out of the seven Standing Committee members of the ruling Politburo met with the Singaporean leader, including Xi Jinping, Li Keqiang and, most surprising of all, Wang Qishan, who has rarely shown up at diplomatic events since becoming the Party’s anti-graft tsar in 2012.

The timing of Lee’s trip, so close to the 19th Party Congress next month, was interpreted as a sign that Lee is still a trusted partner despite the differences in recent years.

Speaking from Xiamen at the end of his trip Lee said relations were “stable” and in a “good state”.

“In the old days China was a different place. Singapore was able to play a different role because China had not yet opened up. Now they are in a much more developed situation… Singapore needs to continue to be able to add value to China in order for the relationship to be worthwhile for both sides,” the Straits Times quoted him as saying.

Lee is right when he says the dynamics of the relationship have changed. Chinese Shipping companies COSCO and China Merchants have bought up ports across the region, threatening Singapore’s role as a busy regional shipping hub.

And in a reaction to the diplomatic rift Lee did not attend China’s Belt and Road Forum in May, leading some analysts to suggest that Singapore would miss out on the project’s benefits.

However, he made some of the ‘right’ noises as far as Beijing was concerned during last week’s trip.

For instance, Lee encouraged Chinese firms to participate in the construction of a new high-speed rail link between Kuala Lumpur and Singapore – which is due to be completed by 2020. With Japan last week winning the bid to build a similar bullet line in India last week, this is viewed as a must-win contract for Chinese trainmaker CRRC.

The vast municipality of Chongqing could also prove to be a test case for whether the Lion State can foster rosier ties with the region’s biggest economy. That’s because with Singaporean cooperation and investment the southwestern city hopes to establish itself as a logistics, services and finance hub serving neighbours such as Myanmar, Laos and Thailand.

Singapore itself, of course, will be a testing ground for one of the key geopolitical quandaries in the decade ahead: how will a small Asian state balance its historic ties to the US with the demands of a rising China? Indeed, while Lee Kuan Yew was famously vocal about the lessons to be learned from Singapore’s development story, its status vis-à-vis China in the future looks more likely to be that of a silent partner. n


© ChinTell Ltd. All rights reserved.

Brought to you by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.