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Minister for Home Affairs and Law K Shanmugam gave the keynote address at the South China Morning Post China Conference on Mar. 29.
Shanmugam summed up his thoughts on the challenges and opportunities for Southeast Asia as China re-opens after the Covid-19 pandemic, saying:
"The secular trend for this region is only one way, up. And that is barring serious war, a major conflagration, or other similar events."
The only way is up
Shanmugam said that World Bank figures showed that East Asia and the Pacific had grown, on average, 1.7 per cent more than the global average.
Growth is also likely to continue very strongly, with Asia including four of the world's 10 largest economies.
He also referenced a speech he delivered in 2012 (when he was Foreign Minister) which cast doubt on the possibility and desirability of "containing China".
Shanmugam listed basic factors for success that would "push the region forward" regardless of short-term ups and downs such as, substantial and hardworking populations; regional resources; relatively high-quality education in many countries the subsequent ability access technology; and strong cultural traditions that encouraged savings and hard work.
Asean in particular was together the world's fifth largest economy, expected to be fourth by 2030, with a combined GDP of US$3 trillion dollars (S$3.99 trillion) and growing.
Asean also has a young and dynamic population with 60 per cent of its 650 million population under the age of 35.
But Shanmugam also mentioned potential challenges, such as attempts to roll back globalisation and free trade; the "splintering of supply chains" through things like on-shoring, friend-shoring, and outright protectionism, even when cost were higher, caused by the forming of "antipathic trading blocs".
Shanmugam attributed the rise of populism as being responsible for driving some of the listed challenges.
He also warned of the world forming into two blocs, with military echoes and far less talk of free trade and connectivity, although trade is still booming.
Many factors for Hong Kong to succeed
Shanmugam then discussed the current situation of both Hong Kong and Singapore. On Hong Kong, he said that he believed that "many of the factors necessary for Hong Kong to continue to succeed are present".
He spoke about the strong links that Hong Kong had to the Chinese hinterland, as well as its close financial integration with mainland China.
This is especially so as Hong Kong is one of Asia's largest equity markets, and the largest offshore Yuan centre, as well as a leading Asian asset and wealth management hub.
Also crucial was the fact that "Beijing wants Hong Kong to succeed".
He dismissed comments that Hong Kong was in terminal decline, and that it didn't have democracy, saying that such talk left him "bemused".
To him, “financial institutions and the related ecosystems will go where they can make money".
However, Hong Kong's continued success is predicated on there being no major internal or external disruptions, such as war, and the same is true for Singapore.
Singapore is a gateway for international capital to Asia, especially for Southeast Asia, and is also a key hub for trading, finance, professional services, shipping and legal arbitration, to name a few.
"In Asia, Singapore was always a great place to invest", he said, and had even come out of the pandemic even stronger due its handling of Covid.
Better together
Shanmugam played down the idea of a Hong Kong-Singapore rivalry, saying that both cities could do very well; it was never "a zero-sum game".
Both economies are closely intertwined, Hong Kong is Singapore's fifth largest trading partner, and Singapore is Hong Kong's fourth largest.
"Both of us benefit from each other growing and bringing vibrancy to this entire region."
The idea that Singapore was supplanting Hong Kong focused too much on short-term factors, Shanmugam said, and suggested that this was more due to Hong Kong recalibrating its position in relation China.
Casualty of an Anti-China mood
Shanmugam criticised media coverage that played up the competition between Singapore and Hong Kong, and how media had overplayed the events of recent years in Hong Kong.
He specifically cited coverage of 2019's Hong Kong's protests, saying that coverage of the event was overwhelming pro-protester.
Shanmugam compared it to negative media coverage of other incidents like the January 6, 2021 attack on the U.S. Capitol by supporters of the defeated Donald Trump, the recent protest in Brazil by supporters of the defeated Jair Bolsonaro, and the protest that ousted Sri Lanka's government, a government that had been elected with a 60 per cent mandate.
It should be noted that both the U.S. and Brazilian demonstrations came after democratic elections, generally agreed to have been held correctly according to established norms, with universal suffrage. Hong Kong's protests did not happen under the umbrella of a popularly-elected government.
Shanmugam felt that the difference in coverage was due to the media's bias, and that "In many ways, I think Hong Kong has been a collateral casualty of an anti-China mood in some parts of the world and their media."
He said that as Singapore's Home Affairs minister, he paid close attention to how the 2019 protest were covered, with "every police action (deemed) an attack on democracy activists" but persons who burnt and destroyed property, or attacked police were "celebrated as democracy activists".
Shanmugam labelled this as hypocrisy, saying that prior to the 1997 handover of Hong Kong from Britain to China, not many had commented on the city's lack of democracy.
But he believed that "the smart money will look beyond the media narratives and effects of periods of transition".
Trending upwards
Instead, smart money would know that Hong Kong was trending upwards, and would become more integrated with the mainland politically and economically.
Hong Kong would be well placed to benefit from the growth of the mainland, especially as it was located within the US$2 trillion (S$ 2.66 trillion) Greater Bay Area, and that Beijing envisioned the city as the finance, shipping, trading, and aviation hub of the area.
He summed up by saying that while there were broader geopolitical challenges that would need the superpowers to find some accommodation, the opportunities were there, and he was confident that others would see the promise in the region.
Top image via Unsplash & K Shanmugam/Facebook