Identifier
Created
Classification
Origin
08SINGAPORE1296
2008-12-12 09:45:00
CONFIDENTIAL
Embassy Singapore
Cable title:  

SINGAPORE VIEWS ON THE RISE OF CHINA (C-AL8-02576)

Tags:  PINR MARR PGOV PREL SN CN 
pdf how-to read a cable
VZCZCXYZ0000
OO RUEHWEB

DE RUEHGP #1296/01 3470945
ZNY CCCCC ZZH
O 120945Z DEC 08
FM AMEMBASSY SINGAPORE
TO SECSTATE WASHDC IMMEDIATE 6116
C O N F I D E N T I A L SINGAPORE 001296 

INFO ASEAN MEMBER COLLECTIVE
CHINA POSTS COLLECTIVE
AMEMBASSY CANBERRA
AMEMBASSY SEOUL
AMEMBASSY TOKYO
CDR USPACOM HONOLULU HI
SECDEF WASHDC
DIA WASHDC
NSC WASHINGTON DC
CIA WASHDC

SIPDIS

EAP/MTS - M.COPPOLA

E.O. 12958: DECL: 12/09/2028
TAGS: PINR MARR PGOV PREL SN CN
SUBJECT: SINGAPORE VIEWS ON THE RISE OF CHINA (C-AL8-02576)

REF: SECSTATE 126002

Classified By: Ambassador Patricia L. Herbold for Reasons 1.4 (b)(d).

C O N F I D E N T I A L SINGAPORE 001296

INFO ASEAN MEMBER COLLECTIVE
CHINA POSTS COLLECTIVE
AMEMBASSY CANBERRA
AMEMBASSY SEOUL
AMEMBASSY TOKYO
CDR USPACOM HONOLULU HI
SECDEF WASHDC
DIA WASHDC
NSC WASHINGTON DC
CIA WASHDC

SIPDIS

EAP/MTS - M.COPPOLA

E.O. 12958: DECL: 12/09/2028
TAGS: PINR MARR PGOV PREL SN CN
SUBJECT: SINGAPORE VIEWS ON THE RISE OF CHINA (C-AL8-02576)

REF: SECSTATE 126002

Classified By: Ambassador Patricia L. Herbold for Reasons 1.4 (b)(d).


1. (C) This Cable is in response to reftel demarche
requesting information on Asian reactions to the Rise of
China. This entire message is classified Confidential.

A) Assuming your host country's response to China is marked
by both engagement and hedging, which do you see as
predominant at present? What about 10 years from now?

--- Singapore's response is marked by both engagement and
hedging, with perhaps greater emphasis on the latter.
Singapore seeks to engage China both politically and
economically, and has sought to leverage its linguistic and
cultural links to gain advantage in trade and investment with
the Mainland. Singapore has established several industrial
zones in China and offers extensive training in public
administration to local and provincial Chinese officials.
Singapore signed a Free Trade Agreement with China in October

2008. Political relations with China have improved over the
past two years following a low point in 2004, when Prime
Minister Lee Hsien Loong (then Deputy PM) angered China by
making an official visit to Taiwan. Singapore officials do
not consider China an existential threat to Singapore at
present but worry that it will increasingly assert its
interests in Southeast Asia, a region of relatively small and
weak states. Founding father Lee Kuan Yew (LKY) recently
said the "Finlandization" of Southeast Asia is already
underway (apparently in reference to Laos, Cambodia and
Burma.). Singapore officials constantly speak of the need
for the United States to remain fully engaged in Asia in
order to maintain a healthy strategic balance, and for the
United States to remain constructively engaged with China, in
order to ensure it learns to behave according to
international norms. LKY has spoken of a "worst case

scenario" in which rising protectionism in the West leads
China to "give up" on its integration into the international
order, with unpredictable consequences for regional peace and
security.

B) How much prominence do leaders and citizens give to China
among other domestic or foreign-policy concerns?

--- China looms far larger in the Singapore consciousness
than it did ten or twenty years ago. Three-quarters of
Singapore's population of 4.5 million are ethnic Chinese, and
there is growing pride here in China's accomplishments.
Singapore's strategically minded leadership and think tanks
put considerable thought and energy into understanding the
implications of China's emergence. Even so, Singapore is
geographically relatively far from Mainland China and there
has been considerable cultural drift, even among ethnic
Chinese. For example, there was little detectable Beijing
Olympics fever in Singapore. Singapore's trade dependence,
wealth, and strong historical, educational, and business
links with the West help serve as a counterweight to China's
appeal.
C) Which interest groups factor significantly in your host
country's interaction with China? Do their views tend to
converge or conflict, and if conflict is the norm, whose
views tend to prevail and on what issues? What role does
public opinion play in shaping policy toward China?

-- Singapore's strategic-minded political leadership remains
by far the country's most influential "interest group," from
which think tanks, businesses and the media tend to take
their cue. Singapore businesses, including government-linked
companies like Temasek Holdings and sovereign wealth fund
Government of Singapore Investment Corporation (GIC),have
substantial holdings in China. Business has been supportive
of close economic links to China, both to take advantage of
commercial and investment opportunities and to diversify away
from dependence on trade with the West. Increasing numbers
of Mainland Chinese are taking advantage of both Singapore's
dependence on unskilled foreign workers and its liberal
policies toward immigration of skilled professionals.
Various sources estimate that between 300,000 - 400,000
Chinese nationals live, study and work in Singapore, out of
roughly one million foreign workers and permanent residents.
Attitudes of native Singaporeans toward unskilled Mainland
Chinese workers appears relatively negative, compared to
those toward other foreign worker populations. It does not
appear Chinese nationals in Singapore have a significant
influence on policy.

D) In what dimensions - including trade, foreign direct
investment, supply of military equipment, and diplomatic
support - does China influence host country policies?

-- Chinese investment in Singapore is relatively
insignificant, although Singapore authorities recognize the
potential of future Chinese investment and welcome it (Note:
In 2006, there was U.S. $1.0 billion worth of Chinese
investment in Singapore. End Note). Bilateral trade has
grown substantially in recent years. However, Singapore does
not appear to have changed any of its economic policies
specifically due to Chinese influence. Singapore does not
purchase Chinese-made military hardware. It values its close
strategic partnership with the United States as the ultimate
guarantor of its security, and seeks to maximize
interoperability with U.S. forces by purchasing most of its
military equipment from the United States (e.g., F-15s). As
a tiny, ethnic Chinese outpost in a complex region, Singapore
seeks positive ties with all its neighbors and promotes ASEAN
integration as a means to partially offset the growing
influence of China and India. At the same time, it is
mindful of the need to remain in the good graces of the
region's large powers, including China. Singapore has on
occasion received Chinese diplomatic support, such as when
Singapore received China's support when competing with
Malaysia and Indonesia in 2006 to locate the Regional
Cooperation Agreement on Combating Piracy and Armed Robbery
against Ships in Asia (ReCAAP) Information Center in
Singapore. Singapore is not inclined to defer to China as a
matter of course on policy matters, though it would likely
weigh carefully, and perhaps avoid, taking an opposing
position on a matter of importance to China.

E) What economic, military, diplomatic, security, or domestic
political benefits does the government in your country expect
to derive from cooperation with China?

---Singapore seeks to take advantage of investment and trade
opportunities with China, building on close cultural ties.
Business and the government have made it a priority to
diversify Singapore's economy and its export markets and see
China's growing domestic market as a balance to its
dependence on exports to the United States, the European
Union and Japan. Singapore and China signed a bilateral Free
Trade Agreement in October 2008. The agreement will allow
Singapore business greater access to China's market
(Singapore already has few or no tariffs on most goods, so
there are fewer economic benefits to China from the FTA).
Contacts speculate that the FTA is "a reward" to Singapore
for its support of China's Tianjin Eco-City project and its
assistance in response to the Chengdu earthquake. The FTA is
also viewed as a clear signal that Singapore is back in
China's good graces after the strains caused by PM Lee's 2004
visit to Taiwan. More broadly, Singapore believes that
building strong economic and political linkages with China is
crucial to ensuring that China stays on a path of
international engagement, which is key to ensuring the
region's continuing peace, stability and prosperity.

F) Does your country expect China's power to continue to grow
relative to its own power, the power of other countries in
the region, and the United States? If so, is this a source
of concern?

--Singapore expects China's economic, political and military
power to grow relative to Southeast Asia (including
Singapore) and the United States, although MFA Permanent
Secretary Peter Ho noted to the Ambassador that Singapore
does not expect the U.S. to "stand still," but rather
continue to grow as well. Singapore officials appear to view
this trend as inevitable and not necessarily a cause for
alarm, provided the United States remains strongly engaged
economically, militarily and politically in Asia. LKY and
other senior officials have warned that rising protectionism
in the West would ultimately weaken the United States and
might cause China to give up on its current development
model, with potentially catastrophic results for the region.
At the same time, LKY has noted that China must guard against
hubris, saying it will take several decades to develop the
Chinese hinterland and before Chinese workers are fully
competitive with those in Japan and the West.

G) What is the range of view in your country regarding
China's current and likely future disposition toward the
region and the United States? How prevalent is the
assumption among the elites or the public that China
aspires to preeminence in East Asia? What do they think the
preeminence would look like?

-- Singapore's leadership appears united in believing China
is currently preoccupied with developing its economy and
addressing internal problems. Thus it is unlikely to be
expansionist and is not interested in imposing its political
values on others. Singapore apQrs to believe that China's
leaders value its currently positive relationship with the
United States and will continue to do so as long as it
provides China economic and political benefits. As noted
above, Singapore believes careful U.S. "management" of and
engagement with China is critical to its healthy emergence.
At the same time, Singapore leaders, including MFA PermSec Ho
routinely express concern that several countries in mainland
Southeast Asia (Burma, Laos, Cambodia and to a lesser extent,
Thailand) are starting to gravitate toward to China.
Singapore officials express concern that China is
increasingly assertive in pursuing its interests and ensuring
its access to needed resources. On the economic side, it is
apparent to most Singaporeans that China's wealth and
economic power are on the rise and that Chinese companies
will one day have a greater presence in Singapore.
Presently, however, Western investment and trade are far more
important to Singapore than its economic links with China.
The near-term concern is that China's industries will soon
be able to compete for the high-end manufacturing that
Singapore specializes in.

H) How widespread are host country views that hedging is
required to safeguard against prospects that China may
eventually seek decisive superiority in East Asia? How would
the hedging or balancing be reflected in your host country's
behavior?

-- Singapore's strong sense of vulnerability lead it to
pursue a foreign policy of seeking good relations with all
players. It seeks a healthy balance among the major powers
in Asia. Above all, it seeks a continued strong U.S.
economic, military and political presence as the ultimate
guarantor of the region's, and its own, security and
prosperity.

I) How important is continued U.S. strategic engagement in
East Asia to your country? Is it viewed as essential to
maintaining national sovereignty? Or is the prevailing view
that adequate independence - on its own or in partnership
with other countries - can be maintained even if the United
States withdrew from the region? Does the host country have
concerns that the United States may not have an enduring
commitment to denying China's regional preeminence or
otherwise sustaining alliances and force deployments in East
Asia?

-- As noted above, Singapore officials constantly say that
U.S. strategic engagement in East Asia is of critical
importance to the region's peace and stability. They
continue to express concern that the United States is
preoccupied elsewhere and not paying sufficient attention to
Asia. And they worry that rising protectionism in the West
could cause China to turn inward, with unpredictable
consequences. While Singapore officials have not expressed
it openly, it is likely they would see a U.S. withdrawal as
potentially an existential threat to Singapore, given its
tiny size and potentially hostile neighborhood.

Visit Embassy Singapore's Classified website:
http://www.state.sgov.gov/p/eap/singapore/ind ex.cfm
HERBOLD