People walk past the skyline of Marina Bay central business district in Singapore April 26, 2013. Photo: Reuters, Edgar Su

The golden jubilee of Singapore’s navy provides a timely and useful vehicle to examine the country’s continuing foreign-policy tightrope walk as maritime tensions continue to simmer in the South China Sea. Singapore’s small size and strategic position have crafted the micro-nation’s shrewd foreign policy, as it rose from fishing village to financial hub.

Balancing the interests of regional players is a familiar game for Singapore, yet 2017 offers a window into the region’s changing dynamics – dynamics that Singapore needs to continue to master if it wishes to remain a relevant player. Singapore faces choices, both political and economic, that invariably brush up against the sensibilities of the two dominant powers in the Pacific: China and the United States.

A flurry of important dates in 2017

This year marks the 50th anniversary of the Republic of Singapore Navy (RSN), and it highlights Singapore’s interactions with Washington and Beijing. May 15 will mark the country’s first ever International Maritime Review, with ships from 20 countries on display as part of the RSN’s celebrations. Despite squabbles with Beijing over the seizure of Singaporean military vehicles in Hong Kong, China will nevertheless attend the event, one that will act almost as a debutante ball for Pacific navies to see and be seen. Prominent contingents from the US and China will be on display as each country seeks to highlight its ties with Singapore.

This year is also seeing a flurry of renewed and new military cooperation by Singapore with both China and the US. The Maritime Review will also host exercises to prevent encounters at sea spiraling out of control, an apt event for the occasion, one that highlights Singapore’s efforts to keep the peace and simply go about its business unhindered. That is the narrative at least, as Singapore enjoys close ties with Washington and the US military, to the point that Beijing has complained about alleged preferential treatment of US interests.

It remains difficult for Singapore to maintain a balanced approach in trilateral relations when its very development was greatly aided by Washington’s Pax Americana in the Pacific, and the ensuing unhindered movement of trade. So when Singapore suggested in Venezuela during the meeting last September of the Non-Aligned Movement to include a reference to The Hague’s ruling on the South China Sea disputes, it was not trying to enrage China, but to promote a stable status quo. Any interruption in shipping confidence in the region would be a major blow to Singapore’s economy, but since China views said status quo as pro-American, any endorsement of one is seen as an endorsement of the other, and in turn a slight to Beijing. The fact that Singapore’s military assets were seized a month later points to more than just coincidence.

Consequently, Beijing worries about Singapore’s involvement with the US military, especially in 2017. Recent months have seen a flurry of bilateral efforts, including a meeting in early April between Singaporean officials and US Defense Secretary James Mattis to update the new administration of President Donald Trump. Indeed, this week Trump invited Singaporean Prime Minister Lee Hsien Loong to visit the White House.

Moreover, the Singapore’s air force is training with the US in Guam until May 12. This month will also see the annual Singapore-US Cooperation Afloat Readiness and Training (CARAT) event. In addition, the US Navy has announced the creation of a new two-week bilateral exercise in Guam with Singapore, codenamed Pacific Griffon. Speaking about the event, US Rear Admiral Don Gabrielson said: “I am highly confident it is going to meet the RSN’s needs to hone their skills out at sea.” Last, June will mark the Trump administration’s first Shangri-La Dialogue in Singapore.

Bilateral exercises not only reinforce strategic partnerships, but for countries with the kinds of resources the United States has, they also turn their militaries into service providers, such as of training and live-fire weapons testing. This makes Singapore’s participation a dual annoyance to China, in that it reaffirms America’s presence in the region, but also from a consumer standpoint that shows that Singapore would rather sail halfway to Hawaii than train with China in its own back yard.

While China and Singapore conducted their first joint military exercise in 2015, and while Singapore’s navy made a port call in Qingdao from April 23 to 26, the disparity in bilateral military cooperation is clear. Throw in plans to station four US littoral combat ships on a rotating basis at Changi Naval Base by 2018 and the message (as far as Beijing is concerned) is clear.

One Belt, One Road (to ruin?)

Whereas Singapore leans toward the US in military matters, economically it is firmly in China’s court, having become the largest foreign investor in China since 2013. The problem is that Singapore’s economic commitment to China is less visible, as it does not make the same of kind of powerful statements that military affairs enjoy.

The irony is that China complains about Singapore’s US leanings when Singapore has spent just as much, if not substantially more, on Chinese assets than on American military hardware. With the Trans-Pacific Partnership dead in the water, Singapore’s decision to also sign on to China’s Regional Comprehensive Economic Partnership has proved prescient, but one that now further economically binds Singapore to Beijing.

May 9-10 will mark the 12th China-Singapore Forum, and Singaporean Ambassador at Large Tommy Koh has taken the time to highlight the two countries’ history of strong bilateral ties.

“Three generations of Singapore’s leaders have tried to promote better mutual understanding between China and the United States,” he wrote  this week. “Singapore was one of the first countries to support the Asian Infrastructure Investment Bank. Singapore is also supporting the One Belt, One Road (OBOR) Initiative.”

The increasing focus on OBOR does present Singapore with some opportunities, but it also threatens the tiny nation’s disproportionately influential role. Long considered to be the maritime capital, Singapore is increasingly facing the prospect of being sidelined by Chinese efforts to develop alternative commerce routes.

Overland transportation links work to diversify the routes taken by imports from, and exports to, China. The arrival of the first direct Chinese train to Britain in January, as well as the arrival of the first British train to China on May 2, poignantly highlight this trend. Alongside growing overland energy imports from Russia and Central Asia and the growth of green technology in China, both freight and energy shipping via Singapore faces competition.

To be sure, terrestrial OBOR initiatives are not going to supplant maritime trade, nor stop Singapore from being an important port, but it throws into question Singapore’s status as the port. While many have pointed to Shanghai as a potential “Singapore-killer”, others have claimed that Shanghai represents a red herring, with Hong Kong the real threat. This year also marks the 20th anniversary of the handover of Hong Kong to China. Uncertainty in the late 1990s about the fate of the capitalist island has given way to impressive growth, with Hong Kong becoming a primary financial hub for the largest growth engine in world history.

The maritime portion of OBOR emphasizes the creation of a “string of pearls” across the Pacific and Indian oceans, a notion that undermines the special “linchpin” status Singapore has enjoyed for long. For decades Singapore has taken advantage of the dearth of financial centers and major ports between Cairo and Canberra, but Chinese efforts to create logistical and financial centers across the region relegates Singapore to one of many pearls – albeit a rather lustrous one – on a chain, with Hong Kong increasingly becoming the clasp on this pendant. Chinese-led investment in Darwin, Dawei, Gwadar, Kra Canal, Port Klang, Hambantota and others all point to an erosion of Singapore’s dominance.

The increasing demand for professional services facilitating access and business in China, from shipping to taxes and tariffs, puts Hong Kong at an advantage to become the main Asian professional services hub. Moreover, Hong Kong dwarfs Singapore when it comes to listed companies, more than 1,880 (with turnover of US$18.4 billion) versus Singapore’s 769 (with US$800 million in turnover).

Besides being connected to the world’s largest market, Hong Kong also outmaneuvers Singapore with regards to demographics. As Singapore urges its aging population to have more children, Hong Kong has (despite mainland China’s own slowing birth rate) a massive population surplus on its doorstep on which to draw from.

The dragon in Chinese mythology represents ever-changing fluidity: The Chinese dragon is breathing change across the region. It remains to be seen if the Lion City can weather it.

Jeremy Luedi

Jeremy Luedi (@jeremyluedi) is the editor of Asia by Africa, a blog highlighting under-reported stories in Asia and Africa and the surprising ways both regions interact. His writing has been featured in Business Insider, Huffington Post, Nasdaq.com, Yahoo Finance, The Japan Times, FACTA Magazine, The Diplomat, and Qrius, among others.

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