Forty years of reform: China vs Singapore

This week marks the 40th anniversary of the official beginning of China’s reform and opening-up, when the Third Plenary Session of the 11th Central Committee of the Communist Party of China was held from December 18-22, 1978.

Just one month before the historic conference, in November 1978, Chinese paramount leader Deng Xiaoping visited Singapore, marveling over its great development achievements. During the trip, Deng was told by Singaporean prime minister Lee Kuan Yew: “Whatever we have done, you can do better, because we are the descendants of the landless peasants of south China. You have the scholars, you have the scientists, you have the specialists. Whatever we do, you will do better.”

At that time, Deng did not respond. However, in 1992, during his famous South China tour speech, Deng clearly stated, “We must learn from Singapore.” China subsequently initiated a large-scale campaign of learning from Singapore.

Now, 40 years later, has China done better than Singapore?

Economic achievements

First, in terms of their economies, both China’s and Singapore’s performances have been extraordinary.

Over the past 40 years, China’s gross domestic product has grown at an average annual rate of 9.3%, and its share of the world’s total economy has jumped from 1.8% to 15%. China has been the second-largest economy for years, after only the United States.

Meanwhile, China has achieved food self-sufficiency and successfully lifted 800 million people from absolute poverty. China’s foreign-exchange reserves, manufacturing capacity and international trade volumes are all No 1 in the world.

When it became independent in 1965, Singapore’s nominal GDP per capita was around US$500, similar to Mexico and South Africa, but by 2015, its nominal GDP per capita had caught up with Germany and the United States. Now, Singapore is among one of the richest, most open, most pro-business, most competitive and least corrupt economies globally.

When China and Singapore established diplomatic relations in 1990, China’s GDP was less than 10 times that of Singapore, but now it is close to 40 times. China’s erstwhile “small fishing village” of Shenzhen now has a larger GDP than Singapore. However, as of 2017, China’s GDP per capita (US$8,827) was still less than one-sixth (15%) of Singapore’s (US$57,714).

In the past, China learned a lot from Singapore on how to run its economy. However, nowadays Singapore is also realizing the urgency to learn from a rapidly growing China, especially in the areas of “Chinese innovations” such as mobile payment, sharing economy, artificial intelligence and so on. The two nations have entered a new era of mutual learning.

Social development

In this area, China is obviously lagging Singapore. As a globally renowned “Garden City,” Singapore is one of the cleanest and most civilized countries in the world, while China is still fighting with its massive environmental pollutions and pushing its “toilet revolution.”

Singapore has developed a very comprehensive and robust social-security system covering housing, health care, education and retirement, while those are still top concerns Chinese people are complaining about.

Taking housing issues as an example, Singapore was once described as “one of the world’s worst slums – a disgrace to a civilized community” by a 1947 British Housing Committee report. Now Singapore has successfully implemented a superior public housing program, named “the Home Ownership for the People Scheme,” and its home-ownership rate was 90.7% in 2017, one of the highest in the world. In comparison, China is still struggling with a property bubble that may threaten its social stability.

Governance

Putting aside the controversial topic of Western-style democracy, Singapore has gained a global reputation for strictly upholding the rule of law, ranking No 1 in Asia and 13th globally, while China ranked 75th out of 113 countries in the World Justice Project’s Rule of Law Index 2017-2018.

According to Transparency International’s Corruption Perceptions Index 2017, Singapore was the sixth least corrupt country in the world, while China ranked 77th out of 113 countries and territories.

According to the World Economic Forum’s Global Competitiveness Report 2018, with the most “future-ready” government and best public-sector performance, Singapore was the second most competitive country, while China ranked 28th out of 140 economies.

However, we must be aware that Singapore and China are fundamentally different entities, so it may be unfair to judge their performances only by these kinds of measures. Singapore is a small city-state with limited natural resources, while China is a big country with many complex problems, so both nations have been facing their own challenges to development. Moreover, the two countries generally view each other as partners rather than competitors.

Former Singaporean foreign minister George Yeo once said: “From then on, when talking about Singapore’s relations with China, I would describe Singapore as a bonsai, which is of occasional interest to China because of genetic similarities.” That was a humble and advisable analogy.

As a sovereign and independent nation, Singapore is not a Chinese country, but it has a majority-Chinese population. That is why many of Singapore’s best practices are still most relevant to China, and it can remain the ideal role model for China at least for a considerable length of time.

A version of this article was first published by the South China Morning Post, and this version was provided to Asia Times by the author.