MAY 28 — China, our friendly superpower, hosted a summit for regional and world leaders earlier this month to present and discuss its enormously ambitious One Belt One Road (OBOR) project.
OBOR, strongly backed by incumbent President Xi Jingping, is an attempt to vastly improve trade linkages between China and its immediate region, Asia, Africa and Europe.
Modelled on the ancient Silk Route trading lanes, a promised US$1 trillion of Chinese investments in infrastructure will make it easier for vast amounts of goods and resources to move into and out of the Middle Kingdom.
Such a large scale project in the space of world trade is obviously of major interest to Singapore where trade underlies, effectively, the entirety of our economy.
We are also a nation deeply connected to China; let alone cultural connections, Singapore is the largest foreign investor in China, investing several billion dollars a year in the PRC and China is our largest trading partner.
Even on the Chinese side, we are China’s 10th largest export destination. Bilateral trade stands at US$100 billion (RM427 billion).
Basically, we do a lot of business together so if our partner is having a big party you’d think our leadership would be invited. But it wasn’t, and despite efforts to gloss over the snub, it’s getting harder to deny that there is a rift emerging between the Little Red Dot and the red giant that is the People’s Republic.
Over the past months, there have been multiple points of tension. Last November, Singaporean armoured vehicles were seized by Hong Kong customs officials on their way back home from a training exercise in Taiwan.
This appeared to be a sign of displeasure at Singapore’s close relationship with Taiwan.
Singapore has also strongly expressed its commitment to freedom of navigation in the South China Sea, and asked for ASEAN unity on the issues related to the South China Sea — and this has possibly been interpreted as a criticism of Beijing’s expansive maritime claims.
The USA’s use of military facilities in Singapore, particularly its recent deployment of anti-submarine aircraft, is a further source of irritation to China’s leadership.
In a fast polarising world, China would basically like us to come out as an ally.
However, Singapore has long and deep links with the US, Taiwan, Japan and the West in general which it is clearly not going to sever any time soon.
Recently regional dynamics have shifted and China is in a position of apparent strength. The Philippines under President Duterte has tilted their way and Malaysia and Indonesia are increasingly compliant given the enormous amount of investment they receive from China.
This puts Singapore in an isolated position. In fact, the absence of an invite to China’s big party was very likely a rather unsubtle means of pointing out our relative isolation and an “encouragement” to our leaders to change course.
China isn’t saying it is angry — Singapore-PRC political meetings and trade are continuing as normal — but it is expressing irritation and firing warning shots.
A warning shot from a superpower though is no joke so why don’t we simply stop hedging, get on the OBOR bandwagon and support this regional power over a distant Western one? Surely it makes sense to be aligned the same way as our neighbours?
Not necessarily.
Singapore’s relationship with China is complex. We need China more than ever but we are fundamentally a trading post, a place where people from all over the world gather to do business.
We have long been a place where Chinese businesses can interact with businesses from the rest of the world within a global financial and legal framework.
Essentially it is our close relationship with the West and familiarity with Western systems that makes us useful to China.
So, stressing our relationships with the West to please China doesn’t exactly make sense.
Our relationships with the US, Europe and Japan are longstanding and for Singapore a zero sum is not an option; quite simply, it can’t be the US OR China.
Singapore therefore needs to stand its ground which doesn’t mean we must be pro-US but we need to be aggressively neutral — if that makes sense.
We cannot, at any cost, let anyone force us into picking a side and we have to use our leverage with both sides.
We are a tiny nation but we do have a crucial geographic location — there is no global economy without the Straits of Malacca — and a military that can’t be sniffed at.
We’re also a major financial centre, a clearing house for Chinese RMB and a major centre for Western financial institutions.
As worrying as upsetting the PRC’s actions have been, we probably need to stare down the behemoth this time and use our relationships with the West as insurance. But there will also be a point when we’ll have to mend our bridges and rebalance as tilting too far towards the West has its own pitfalls.
This is really the ultimate test of our leadership. The last generation managed to balance Europe and Asia, East and West — authoritarianism and free markets — but this balancing act is getting tougher and tighter every day.
Maybe this is why our leaders are so well paid because if we choose a side, and it is wrong — or we end up pissing both sides off — we’ll go from star of the Straits to dire straits pretty fast.
* This is the personal opinion of the columnist.
