Speech by Senior Minister of State for Foreign Affairs and National Development Sim Ann at the Launch of the "China and India: Two Giants Shaping the Global Economy" Workshop series, 14 November 2024

Dr. Teh Kok Peng, Chairman of the East Asian Institute (EAI)

Associate Professor Mr. Iqbal Singh Sevea, Director of the Institute of South Asian Studies (ISAS)

 

Distinguished Guests

Experts

Ladies and Gentlemen

 

1 It is my pleasure to join you today at the launch of a timely workshop series, “China and India: Two Giants Shaping the Global Economy”. Let me commend the organisers, EAI and ISAS, for curating and working together on this very valuable platform to discuss two of the world’s most influential economies. 

2 China and India are economic powerhouses and pivotal players on the world stage whose heft and weight only continue to grow. Together, they represent around 35 percent of the world’s population. China is the second largest economy in the world. It accounts for nearly 20 percent of the world’s GDP and around 14 percent of global merchandise exports. China is also a dominant player in various industries such as automotive manufacturing, renewable energy, and technology. As for India, it overtook China to become the world’s most populous country in 2023. It is currently the fifth largest economy in the world and projected to become the third largest economy by 2040. India has emerged as a leader in sectors such as infotech, pharmaceuticals, professional services and increasingly manufacturing.

3 Both China and India are undergoing socio-economic transformation on a scale and at a pace unprecedented in human history. In their pursuit for sustained growth, each faces unique challenges. China is now shifting its economic model towards boosting domestic consumption and achieving a more sustainable external balance. It has taken steps to address long-standing issues, including measures to stabilise its beleaguered property sector. However, as the Chinese economy transitions, it faces the dual pressures of high youth unemployment and an aging population, which will strain its pension system. Beijing has recently taken steps to extend the retirement age to 63 years for men, and 55 or 58 years for women by 2040.

4 For India, the challenge is one of scale and harnessing its demographic dividend. It must continue to address its physical infrastructure deficits, especially in transportation, energy, and urban infrastructure. While 65 percent of India’s population is currently below 35 years old, it also has to contend with an unemployment rate of 7.8 percent. The government will have to simultaneously invest heavily in skilling its youth and creating jobs to satisfy their aspirations for a better future and ensure that they have the right skillsets for India’s emerging industries. India and China both face challenges that require innovative solutions and a strong commitment to reform.

5 Over the years, China and India’s relations have also encountered various ups and downs. Bilateral ties have been affected by border tensions which have sometimes escalated into conflict and clashes, most recently with the 2020 skirmishes in the Galwan Valley. Today, both countries are competing for influence in South Asia and the Indian Ocean, and for leadership of the Global South. Growing US-China contestation has also impacted the China-India relationship. There are new dynamics between the three countries, as they balance national security and economic considerations. We are already seeing the restructuring of supply chains and an increase in economic restrictions against each other. 

6 Despite these issues, both China and India recognise each other as neighbours with a long history of cultural and economic ties. Beijing and New Delhi are keenly aware of the value of bilateral cooperation. They continue to work together in areas like climate change and education, and through mechanisms such as BRICS and the Shanghai Cooperation Organisation. Notably, in 2023, China-India trade reached a record high.

7 China and India have shown that they can manage their relationship pragmatically. Last month, the two countries reached an agreement on patrolling arrangements along the Line of Actual Control in Ladakh. This paved the way for a meeting between President Xi Jinping and Prime Minister Narendra Modi on the sidelines of the BRICS Summit, their first formal meeting in five years. As a friend of both India and China, Singapore is glad that they have resumed dialogue at the leaders’ level and are actively engaging each other to resolve bilateral issues peacefully.

8 A stable China-India relationship is important for regional peace and prosperity. As ESM Goh Chok Tong stated as early as almost 20 years ago, China and India are two power engines that would help the ASEAN region lift off.  Besides being dialogue partners of ASEAN, both countries have concluded free trade agreements with ASEAN and are closely linked to our region through geography, culture, and history. Although India is not in East Asia, we championed the inclusion of India in the East Asia Summit in 2004 because we felt that India has a role to play in this region. 

9 Singapore shares constructive and enduring relationships with China and India, anchored by strong economic linkages and frequent high-level exchanges. Singapore-India relations will remain on an upward trajectory in the coming years. Singapore remains the top foreign investor in India and through bilateral mechanisms such as the India-Singapore Ministerial Roundtable (ISMR), our two governments are cooperating closely on sustainability, digitalisation, connectivity, advance manufacturing, skills development, and healthcare. During Prime Minister Modi’s Official Visit in September 2024, both sides agreed to upgrade our relationship to a Comprehensive Strategic Partnership. Next year will also mark the 60th anniversary of our diplomatic relations.

10 Similarly, Singapore and China have a longstanding and multifaceted relationship based on mutual understanding and trust. Singapore was the first country in Asia to conclude a comprehensive bilateral free trade agreement with China. Today, China is Singapore’s largest merchandise trading partner while Singapore is China’s largest foreign investor.

11 In 2023, then-PM Lee and President Xi Jinping agreed to upgrade the bilateral relationship to an “All-Round High-Quality Future-Oriented Partnership”. Our apex mechanism, the Joint Council for Bilateral Cooperation, which is co-chaired by DPM Gan Kim Yong and Executive Vice Premier Ding Xuexiang, held its milestone 20th meeting just this week on Monday. Both sides announced 25 deliverables covering sectors from food security to the digital economy. Our first Government-to-Government project, the Suzhou Industrial Park, celebrates its 30th anniversary this year and stands as one of China’s most competitive industrial parks.

12 The development priorities and economic agendas of China and India present an abundance of possibilities for Singapore. With both countries, we continue to pursue collaboration not only at the national level, but also with Chinese provinces and Indian states. With China, beyond our three Government-to-Government projects in Suzhou, Tianjin, and Chongqing, we have eight provincial business councils. This allows us to tap on the developmental potential of different regions and deepen engagement across various levels of governance.

13 Moreover, Singapore serves as an economic gateway for Chinese and Indian firms to expand into ASEAN. Our robust financial infrastructure, ease of doing business, and strategic positioning within Asia have attracted firms from both countries seeking to tap into Southeast Asia’s 670 million-strong consumer base. In turn, this has bolstered Singapore’s status as a global business hub and created numerous opportunities for Singaporeans.

14 Looking ahead, we have to continue finding ways to harness the engines of China and India effectively to propel our region forward amid growing great power competition, fragmentation, protectionism, and nationalism. As ancient civilisations with deep cultural memories and great ambitions, India and China will continue to be central drivers of global and regional growth. By virtue of their growing strategic and economic heft, China and India will seek more prominent roles in international affairs. They will increasingly exercise substantial influence over the future direction of global governance and geopolitical outcomes, even as they concurrently navigate complex relationships with other countries, near and far. The attendant tensions and complexities will overlay the region’s future for a long time to come. 

15 It is therefore important for Singapore and our region to closely engage both India and China and ensure that they remain constructive and valued partners in our region’s growth and development. For Singapore, I believe we can continue to play a meaningful role in the growing economic activity within, between, and beyond China and India, by being keenly aware of our respective comparative advantages, and Singapore’s economic connectivity and global positioning.

16 This workshop series comes at a critical juncture in international affairs. I encourage all participants to engage in thoughtful dialogue on the evolving roles and dynamics of China and India on the global stage. There are many important questions that we can consider, such as: What are the likely future trajectories of China’s and India’s economies? In what ways can the two countries work together bilaterally and multilaterally to address challenges of the global commons, including through newer platforms like BRICS and the Shanghai Cooperation Organisation? How might China and India engage constructively with our region? I look forward to the outcomes of your discussions.

17 Thank you.

 

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