The city-state of Singapore is located at a key point in geostrategic terms, connecting the Indian Ocean and the Pacific Ocean. This fact allows the country to play a key role in world geopolitics by having one of the most important ports globally, being a major center of world trade, finance, logistics, innovation and being a key part of global supply chains.
Despite its size, Singapore has significant soft power, which lies in its dynamic economy and attractive business model. And since its independence, it has successfully played diplomacy as a strategic tool.
Singapore is located in the Indo-Pacific region, which is becoming the most strategically important economic region in the world for both the United States and China. This has sparked a fierce battle between the two powers to attract the countries that make up the region to their respective spheres of influence.
The Singaporean economy is highly dependent on international trade, so its main interest is to maintain an open and free international economic system. Since the trade war between the U.S. and China is already hurting the Singaporean economy, the city-state has adopted a stiff policy of neutrality in the rivalry between the two powers, and aims to balance its relationship with both. The country does not want to choose sides. Singapore's Foreign Minister Vivian Balakrishnan commented that the city-state "will be relevant and useful, but will not be used" in the U.S.-China rivalry.
Singapore and the United States, while not being formal allies, have enjoyed a broad and deep partnership for decades. The relationship is based primarily on a shared belief that a strong U.S. presence in the region is vital for peace, stability and prosperity, and translates into strong economic and military ties.
Singapore's policy of non-alignment began after its independence in 1965, when in the midst of the Cold War, it decided to maintain relations with the US, the Soviet Union and Russia. The US saw Singapore as a partner contributing to US interests in its strategy of containing communism in South Asia. And, on the other hand, Singapore viewed the U.S. as a partner that helped it achieve its immediate goals of security, nation building and socioeconomic development.
Economic cooperation forged a strong bond between Singapore and the U.S. and endowed the Singapore government's neutralism with a strong U.S. bias. Today, the city-state is the 17th largest trading partner of the United States.
Returning to the Cold War of the 21st century, during the days of 22-26 last month (August), US Vice President Kamala Harris visited Singapore and Vietnam. In the city-state, she met with Prime Minister Lee Hsien Loong and gave a speech on the US´ strategy in the Indo-Pacific. This trip is part of US strategy of containment of China´s influence in the region, and could be seen as a symbolic move by the Biden administration to assert its commitment to the Indo-Pacific region.
Prior to the VP Harris' visit, senior U.S. officials, including Secretary of State Anthony Blinken and Secretary of Defense Lloyd Austin, had already visited Singapore's leaders in recent months.
In his speech, Harris reaffirmed the U.S. government's commitment to regional security by maintaining a significant economic and defense presence. He reiterated that the United States rejects China's claim to the South China Sea and defends freedom of navigation. However, she affirmed that U.S. policy is not against any country and will not force countries in the Indo-Pacific region to choose sides. Several agreements were reached during the visit, including supply chain matters, cybersecurity, cooperation on the adoption of international standards on emerging technologies and health cooperation. Singapore ratified its commitment to continue hosting U.S. Armed Forces and to continue supporting the U.S. military and diplomatic presence in the region in order to balance China's growing influence.
On the other hand, it is imperative to mention the China+1 Strategy for a deeper understanding of the issue. The global Covid-19 pandemic and the intensifying strategic rivalry between the U.S. and China have amplified the need to restructure U.S. global supply chains. As a result, the Biden administration has established the China + 1 strategy, which compels U.S. companies with a manufacturing presence in China to also establish a production base in Southeast Asia. This allows a suitable and reliable alternative to be established in an ASEAN economy, and thus to progressively move the U.S. business community from China to ASEAN.
To accelerate the process of manufacturing and assembly offshoring to ASEAN countries, the strategy envisions establishing greater investment in Southeast Asia in infrastructure, education and training to increase the efficiency of production processes and the skills of workers in the region. It is likely that one of the objectives of the China + 1 strategy is to lay the groundwork for negotiations with ASEAN member states to reduce political and economic barriers and thus attract them to its sphere of influence.
This is why VP Harris discussed supply chain issues at length with the Prime Minister of Singapore. However, the conversation was framed around the need to facilitate supply chain resilience and security in the context of pandemic management, rather than the geopolitical battle between the U.S. and China.
Singapore and the People's Republic of China enjoy a special relationship based on cultural affinity and close economic interdependence. The city-state was a model of development for China after it abandoned Maoist autarky. In fact, Singapore trained more than 55,000 Chinese officials.
China is Singapore's largest trading partner, and in 2019, Singapore became the country with the highest amount of Foreign Direct Investment coming from China. The country is becoming a center of attraction for Chinese tech giants such as Tencent, Alibaba and ByteDance - owner of Tik tok. However, Chinese FDI in Singapore remains relatively small compared to cumulative investments from the United States. On the other hand, Singapore has been the largest foreign investor in China since 2013. In addition, the two countries have established a work program to negotiate a Free Trade Agreement between the two countries.
Singapore is a big supporter of Beijing's projects such as the Asian Infrastructure Investment Bank (AIIB) and the Belt and Road Initiative (BRI), despite U.S. displeasure. And one-third of China's total investment related to the Belt and Road Initiative around the world is in Singapore. At the same time, the city-state is one of the top investment destinations for Chinese companies investing abroad.
China and Singapore also have close military cooperation. China's People's Liberation Army (PLA) and the Singapore Armed Forces have been conducting joint military exercises since November 2010. And in October 2019, Singapore and Beijing expanded a defense pact that instituted frequent high-level dialogues and larger-scale military exercises and interactions involving their three military arms: the army, navy and air force.
Interestingly, Singapore was the coordinator of the ASEAN-China Dialogue between 2015 and 2018. Which indicates that Singapore has a bridging figure between China and the rest of the ASEAN nations.
Going back to the China-US battle, Beijing's top diplomat Yang Jiechi visited Singapore in August and held talks with the prime minister. Now, the Chinese Foreign Minister Wang Yi is visiting Vietnam and Singapore in order to reassert Beijing's influence following trips by U.S. Vice President Kamala Harris and the Defense Secretary in recent months. Wang's Asian tour also includes Cambodia and South Korea.
Chinese diplomacy in Southeast Asia has entered a phase of hyperactivity over the past year, the main pillar of which is being vaccine and health diplomacy.
What can we learn from Singapore? To be diplomatic and to equilibrate partnerships. Singapore is a good example to follow for the EU and its member states, which must learn to balance their relationship with the Great Powers and avoiding entering into a hybrid war that would be detrimental to the EU economy.