Singapore sees its engagement in the Greater Bay Area as a continuation of its long history of collaboration with China since the mainland’s reform and opening up, according to transport minister Ong Ye Kung, a member of Singapore’s fourth-generation team of leaders who has been tasked with building closer ties with China.
Ong, in an interview with This Week In Asia last Friday, said Singapore’s economic structure, talent base and capability complemented Beijing’s aims, and that the island nation had “always played a role” in China’s growth story. But as the Asian superpower entered a “new phase”, he said, Singapore needed to adapt so it could contribute gainfully.
“[We must] move with the times. The concept of collaboration is no longer the same,” he said, pointing to flagship ventures including the Suzhou Industrial Park, a 1994 project to jointly build a modern industrial estate, and the Tianjin Eco-city, where both governments looked at developing an environmentally friendly and resource-saving city. The most recent government-to-government project between the two countries is in Chongqing.
“Today, we look at new ways of collaboration … like the Greater Bay Area,” Ong said.
His remarks come as the city state’s investments continue to rise in the Greater Bay Area, a project unveiled last year by Beijing to transform Hong Kong, Macau and nine cities in the province of Guangdong into a financial and technological hub.
The area houses a population of about 70 million, which is much higher than other bay areas such as New York, San Francisco and Tokyo.
According to Freddy Wong, the Asia-Pacific head of investment firm Invesco’s fixed-income arm who was speaking at a Bloomberg panel in October, four of the five wealthiest persons in China live there.
At the heart of the Greater Bay Area is Guangdong, Singapore’s top provincial trading partner in 2019 – the 31st consecutive year it had ranked first. Bilateral trade between the two grew 1.9 per cent year on year to reach US$19 billion (S$25 billion) last year, and according to official figures from Guangdong, there were more than 3,100 Singapore projects in the province as of December last year, with a cumulative actual investment of US$13.1 billion.
Ong, who co-chairs the Singapore-Guangdong Collaboration Council, said investments in the coastal Chinese province had always been sizeable, but the introduction of the Greater Bay Area plan “added further impetus”.
One of Singapore’s “signature projects” in the province was the Guangzhou Knowledge City, Ong said. The project, launched a decade ago by Chinese provincial authorities and the Singapore government, tapped on the city state’s urban development skills to transform the Chinese city into a centre of higher-value production.
He described the project as an “anchor investment” that paved the way for many Singapore firms, from venture capitalists to financial institutions, to enter the market.
Ong highlighted the example of SP Group, Singapore’s state-owned power grid operator, which provides expertise on cooling and heating networks to firms in Guangzhou.
“It is a complementary partnership because they have the market, the dynamism; we have useful capabilities and know-how, and companies that have something to offer,” Ong said. “I think pairing our capabilities with their market is a very good combination.”
Ong noted that the kinds of investments flowing to the Greater Bay Area had evolved. While they used to centre on simple manufacturing or assembly, the range had widened to include sectors such as advanced manufacturing, information technology, research and development, and services.
A wave of medtech firms had also made inroads before the coronavirus pandemic, he added.
The Singapore minister had earlier called for a greater scope of collaboration between Singapore and Guangdong, including working together in green finance, fintech, and disaster risk insurance, among others.
When asked how Singapore intended to have an edge over other Asian economies eyeing a piece of the action, in particular Hong Kong, Ong said it was not a contest, even though “people love to see [us] compete for some reason”.
“The Greater Bay Area is big. I don’t think it’s about fighting over slices of the same pie,” he said.
Earlier on Tuesday, the Hong Kong Monetary Authority said the special administrative region could become a green bond financing hub for the Greater Bay Area to help mainland firms raise funds for development projects.
Ong noted that the two Asian cities had come together for different forms of collaboration in the past, the latest being the Singapore-Hong Kong travel bubble.
Even though it was delayed for two weeks due to a spike in infections in Hong Kong, authorities from both sides have lauded it as the first of its kind in the world.
“There will be ups and downs, but I believe beneath competition, there’s always a lot of interdependence and collaboration,” he said. “Having two major financial centres and aviation hubs in Asia is much better than one, because we then grow the pie together.”
Even as Ong remained hopeful about the prospects of the Greater Bay Area, he was cautious that the coronavirus pandemic could slow investments and growth.
“I don’t think it is sustainable if borders continue to be closed,” he said. “It’s very hard to get investments and deals going without seeing each other face to face, having a handshake, talking to partners, forging that trust, and watching over your investments in person.”
Ong this year spoke to Guangdong Governor Ma Xingrui via video conference for the Singapore-Guangdong Collaboration Council meeting in August. He had travelled to Guangzhou last year.
While he acknowledged that businesspeople could use the Singapore-China reciprocal green lane for official and work visits, Ong said it was “not quite the same”.
“You want that freedom of travel, not just for the boss and investor, but also his key staff, suppliers, potential customers, consultants and others,” he said. “If you want economic integration, you can’t run away from people-to-people interaction. You can’t just do it over Zoom.”
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This article was first published in South China Morning Post.