Singapore PM says good China-ASEAN ties helpful in tackling global crisis

www.chinaview.cn, Zhang Yongxing, Gao Chuan, 2009-04-08 14:52:03

SINGAPORE, April 8 (Xinhua) -- The good ties and mutual understanding between China and the Association of Southeast Asian Nations (ASEAN) will not only help both sides to work together to tackle the global crisis, but also help them to maintain peace and stability in the Asia Pacific, Singapore's Prime Minister Lee Hsien Loong said on Wednesday.

In an exclusive interview with Xinhua, Lee voiced his satisfaction over the all-round development of China-ASEAN relationship over the past years, saying that both sides have built up good rapport and understanding.

"China is one of ASEAN's most important partners. China's trade with ASEAN makes up over one-tenth of ASEAN's total trade, "he said, adding that "leaders and senior officials from China and ASEAN countries meet several times each year. Our businesses and peoples also interact intensively."

As for the China-ASEAN Free Trade Area (FTA), a vast market with a population of 1.8 billion and a Gross Domestic Product (GDP)of 2 trillion U.S. dollars will be established in 2010, he said that the FTA has further enhanced bilateral ties between ASEAN and China.

"We have progressively built up the FTA, starting with the Trade-in-Goods Agreement in 2004, the Services Agreement in 2007, and finally the Investment Agreement this year. Now that the whole FTA has been completed, our companies should make full use of it. We should also regularly review the FTA to improve its terms and keep it up-to-date," he noted.

Lee praised China for what the largest developing country has done to improve its ties with the 10-member ASEAN, saying that both China and ASEAN are committed to maintaining peace and stability in the Asia Pacific, and this is a pre-condition for economic progress.

"China has acceded to the Treaty of Amity and Cooperation in Southeast Asia, and committed itself to promoting peace, friendship and cooperation in the region. China and ASEAN have also signed the Declaration of Conduct of Parties in the South China Sea which commits us to exercise self-restraint, and to the peaceful resolution of disputes," he pointed out.

Lee said that ASEAN's approach is to build an open and inclusive East Asian community by gradually involving more countries in an enlarging circle.

The ASEAN plus China (10+1) mechanisms provide a sound base for larger regional schemes such as the ASEAN plus China, Japan and South Korea 10+3) process the East Asia Summit (EAS) and the ASEAN Regional Forum (ARF), he added.

Seeing the effort to link up the East Asian economies through Free Trade Agreements (FTA) as "a good example", he said that the ASEAN members, which have had a free trade area since 1992, have in recent years extended the network by negotiating ASEAN plus China FTAs with its Dialogue Partners, and are close to conclude FTAs with all six partners in the East Asia Summit.

At the forthcoming meeting in Pattaya, Thailand this weekend, Lee said, ASEAN economic ministers will sign the China-ASEAN Investment Agreement, and they have also started work on the next steps: an ASEAN plus three FTA and an East Asian Summit FTA.

Talking about the role Singapore can play in the regional bloc, Lee said that as a small country, Singapore tries to be an honest broker.

"We work with our ASEAN counterparts to engage major powers in the region. We contribute ideas, and help to foster consensus among the countries," he said.

Lee stressed that the excellent relationship between China and Singapore can serve as "a bridge" to promote better understanding and cooperation between China and ASEAN.

Hailing the ASEAN Regional Forum (ARF) as "the premier forum" for promoting peace and security in the region, he said that such forum covers both traditional (such as counter-terrorism) as well as non-traditional (such as disaster relief, maritime security and non-proliferation) security cooperation.

As active participants in the ARF, China and Singapore are cooperating on several initiatives in nuclear safety, non-proliferation and disaster relief, Lee said, adding that the two countries are also co-organizing an ARF seminar on laws and regulations in disaster relief in Beijing later this month.

Lee said that they applaud China's commitment to the ARF, and working together, they can jointly enhance the ARF's role in promoting peace and security in the Asia Pacific.

Lee urged Asia to maintain open in trade and investment, saying that such regime is vital to the region.

"All countries depend on trade to develop and grow their economies. Amidst the global economic difficulties, we must signal to the world that East Asia continues to be open for business, to give investors confidence to make long term investments in the region," he said.

In regard to how to deal with the current global crisis, Lee said that the first priority must be to resolve the current global crisis as quickly as possible.

He detailed that this requires countries to work together to address the falling global demand. They must break the debilitating cycle of poor consumer sentiment, weakening economic activity and tightening credit, he added.

The decision of the recent G-20 meeting in London to commit 1 trillion U.S. dollars to mend the world economy through the International Monetary Fund (IMF) and other institutions will contribute to this, he said.

In the developed countries, he continued, the most urgent task is to repair the financial systems. This includes recapitalizing banks and removing toxic assets from their books.

Countries must also continue to reject all forms of financial protectionism, and government measures that push banks to lend more domestically at the expense of their foreign lending will especially hurt emerging economies, he stressed.

Lee also advised that in the medium term, they have to strengthen and improve the regulation of financial institutions and markets. But they must not swing to the other extreme of excessive government regulation which will hamper the flow of credit.

"We will need to improve macro-prudential analysis of the global financial system, draw attention to vulnerabilities in both developing and developed countries, and work out effective responses to these vulnerabilities. This will be extremely challenging," he said.

Lee believes that the emerging economies, which are still much smaller than the developed ones, are a growing factor in global prosperity and financial stability.

The emerging economies, which should play a larger role in the international financial system, should also take on more responsibility for upholding the system and solving problems which affect all countries, he added.

With regards to the planned Patty meeting, Lee said that the deepening economic and financial crisis will be high on the agenda, and East Asian countries must understand what the others are doing, and discuss how they can collectively tackle the crisis.

One important objective, he said, should be to issue a strong statement to support free trade and avoid protectionist measures.

"Governments are under strong pressure to protect domestic producers and discriminate against imports. We need to constantly remind ourselves and our peoples that restricting the free flow of goods and services will make all countries worse off and prolong the downturn, " he said.

On the Chiang Mai Initiative Multilateralisation (CMIM), which needs to be operationalized expeditiously, he said that Asian economies are generally sound, but they should take preventive steps to mitigate against confidence crises and capital flight.

"The CMIM will complement the IMF and World Bank facilities as well as bilateral swap arrangements. All these will help Asian economies to cope with any financial turbulence," he said.

For the longer term, they must continue to bring the East Asian community closer together, he said, adding that regional economic integration will help them to weather such economic storms and also deal with other cross-border issues, such as terrorism, pandemics, and food and energy security.