Chan Chun Sing: Trade with China nearly doubled to S$137 billion in 8 years after FTA
And things are likely to get even better after the enhanced free trade agreement is ratified.
With the warmth shown towards United States Vice President Mike Pence last week, some of us would have assumed that US is among our largest trading partner.
During the joint press conference last Friday (Nov 16), Prime Minister Lee Hsien Loong said that Singapore is the second-largest Asian investor in the US, with companies and investments in more than 30 U.S. states, including Pence’s home state of Indiana.
But here’s a little known fact: China is Singapore’s largest trading partner.
According to the Department of Statistics, our top five trading partners are China (S$137.1 billion), Malaysia (S$108.2 billion), the European Union (S$98.4 billion), the US (S$79.9 billion) and Hong Kong (S$69.6 billion).
Enhancement of the China-Singapore Free Trade Agreement (CSFTA)
It is in this context that Member of Parliament for Tampines GRC Desmond Choo asked the Minister for Trade and Industry about the enhancement of the China-Singapore Free Trade Agreement (CSFTA) in a parliamentary question during this week’s parliament sitting.
On Nov. 12, Minister Chan Chun Sing witnessed the signing and exchanging of the CSFTA Upgrade in the presence of Prime Minister Lee Hsien Loong and Premier Li Keqiang.
Li was in Singapore last week for a five-day visit, his first bilateral visit since becoming premier in 2013.
According to Channel NewsAsia, talks to upgrade the FTA started three years ago when Chinese President Xi Jinping visited Singapore in November 2015.
The CSFTA was the Chinese government’s first such agreement with an Asian country.
Under the current CSFTA, there are no tariffs on 95 per cent of Singapore’s exports to China, while there are no tariffs on all Chinese exports to Singapore.
Impact of current CSFTA
Chan replied in a written parliamentary reply to Choo that bilateral trade with China has grown from close to S$76 billion in 2009 to S$137 billion in 2017 since the entry into force of the CSFTA in January 2009.
Chan also noted that Singapore’s investments in China “have also doubled” from S$62 billion in 2009 to S$123 billion at end 2016.
Chan: “Upgraded CSFTA will promote greater bilateral trade and investment flows between China and Singapore.”
Chan said that the CSFTA upgrade completed this month “comprises a meaningful package”, adding that it would “promote greater bilateral trade and investment flows between China and Singapore”.
Chan also said in a separate Facebook post that the upgrade “sends a strong signal of both countries’ commitment towards closer bilateral economic collaboration”.
Chan cited a few examples of how the upgraded CSFTA would benefit Singapore and Singapore companies.
He said that the improved rules of origin will allow more petrochemical and plastics exports from Singapore to qualify for tariff savings.
He also highlighted that Singapore companies in the legal, construction and maritime service industries will no longer be subject to ownership caps in various parts of China.
Top photo from Chan Chun Sing Facebook.