General

Recently, China and Singapore announced the substantive completion of the follow-up negotiations on the upgrade of the free trade agreement. The teams of both parties will continue their subsequent work such as text legal review and translation, fulfill their respective domestic procedures, and sign the agreement as soon as possible.

China Singapore is an important partner. Yuan Bo, Deputy Director of the Asian Research Institute of the Ministry of Commerce, stated in an interview that this is the second upgrade of the China Singapore Free Trade Agreement, further releasing a positive signal that the two countries adhere to open development and jointly address regional and global challenges. At the same time, this is also an important achievement of the establishment of a comprehensive and high-quality forward-looking partnership between China and Singapore, further improving the two-way openness of services and investment between the two countries, and achieving high standards of economic and trade rules in transparency, digital economy, and other fields. This will create a better development environment for the expansion of service and investment cooperation between enterprises in the two countries.

Promote high standard and high-quality cooperation

During Prime Minister of Singapore Prime Minister Lee Hsien Loong's nearly one week visit to China, China and Singapore issued a joint statement, in which both sides agreed to upgrade China Singapore relations to a forward-looking partnership of all-round high quality, and plan for the future development and strategic direction of bilateral international trade relations. Both sides welcome the substantive completion of the follow-up negotiations on the upgrade of the China Singapore Free Trade Agreement, and will complete the signing of the relevant protocols as soon as possible this year.

It is understood that both sides have further improved their commitment to service trade and investment openness on the basis of the original upgrade agreement, added new telecommunications chapters, and incorporated high-level economic and trade rules such as national treatment, market access, transparency, and digital economy. Both sides also jointly confirmed that the opening measures in the fields of trade in services and investment will not be withdrawn, and promised to each other through an agreement that the "open doors are getting bigger and bigger". This agreement is an important measure and practical action for China to align with high standard international economic and trade rules and expand its opening up to the outside world, which will effectively promote China Singapore international trade and economic cooperation to a new level.

China and Singapore are both staunch defenders of economic globalization and free trade. Yuan Bo said that, especially at present, some countries are implementing trade protectionism policies that violate the principles of the World Trade Organization and forcefully push off the hook and chain, putting greater pressure on global economic recovery and growth. The second upgrade of the China Singapore Free Trade Agreement further releases a positive signal that the two countries adhere to open development and jointly respond to regional and global challenges.

Yuan Bo stated that for China, this is also the first time that a negative list commitment has been made to both service and investment openness in the free trade agreement. Previously, China only made a negative list commitment to investment openness in the Regional Comprehensive Economic Partnership Agreement (RCEP), and the negative list of services will be implemented after the transition period, This fully reflects China's unwavering determination to promote high-level opening-up after the 20th National Congress of the Communist Party of China. The completion of the follow-up negotiations on the upgrade of the China Singapore Free Trade Agreement and the agreement on higher levels of market access and higher standards of economic and trade rules will also help China further promote negotiations such as the 3.0 version of the China ASEAN Free Trade Area, the Digital Economy Partnership Agreement (DEPA), and accession to the Comprehensive and Progressive Trans Pacific Partnership Agreement (CPTPP) in the future, Helping China expand its network of high standard free trade zones towards the world.

Promote the improvement and upgrading of economic and trade cooperation

In recent years, China Singapore international trade and economic cooperation has continuously deepened, demonstrating strong development resilience. Since 2013, China has been Singapore's largest trading partner for 9 consecutive years, while Singapore has been China's largest source of new investment for many consecutive years.

Data shows that in terms of trade, the bilateral trade volume between China and Singapore in 2022 was $115.13 billion, a year-on-year increase of 22.8%. From an investment perspective, Singapore's actual investment in China in the first 10 months of 2022 was 9.61 billion US dollars, a year-on-year increase of 15.7%; China's direct investment in Singapore's entire industry reached 6.35 billion US dollars, a year-on-year increase of 27.8%. As of October 2022, Singapore's cumulative actual investment in China was $130.46 billion, and China's cumulative investment in Singapore was $73.55 billion.

Both sides have also carried out cooperation on projects such as Suzhou Industrial Park, Tianjin Ecological City, Chongqing Interconnection Project, Guangzhou Knowledge City, and Shenzhen Smart City, promoting the continuous expansion and upgrading of practical cooperation between the two countries. It is worth mentioning that the Sino Singapore (Chongqing) strategic connectivity demonstration project has become a successful case of high-quality development of the "the Belt and Road". The project was officially launched in November 2015, mainly covering four key cooperation areas: financial services, aviation industry, transportation logistics, and information communication. As of November 2022, under the framework of this project, 218 government and commercial cooperation projects and 235 financial service projects have been implemented between China and Singapore, effectively improving the connectivity level between the western region of China and ASEAN countries.

In addition, in 2022, China and Singapore signed four memorandums of understanding, covering green development, digital economy, e-commerce, and the construction of new land sea channels.

Looking ahead, taking the substantive completion of the subsequent negotiations on the upgrading of the China Singapore Free Trade Agreement as an opportunity, how will China Singapore promote the upgrading of international trade and economic cooperation between the two countries?

Yuan Bo stated that the opening up of the service and investment sectors through a negative list approach has jointly confirmed that the opening up measures in the service trade and investment sectors will not be withdrawn, which not only improves the level of trade and investment liberalization and facilitation, but also provides greater certainty for enterprises and practitioners in both countries. Achieving higher standards of rules in areas such as national treatment and transparency can help provide a more fair and transparent competitive environment for services and investors in both countries. Singapore is China's largest partner in service trade and investment cooperation in ASEAN. The subsequent negotiations on the upgrading of the China Singapore Free Trade Agreement and the comprehensive upgrading of rules in the field of services and investment will help promote high-quality cooperation between the two countries in the field of services and investment. The rules in the field of digital economy will provide institutional guarantees for deepening cooperation between the two countries in forward-looking fields such as the digital economy, enabling international trade enterprises of the two countries to fully play a leading role in the region through complementary advantages.