Asia well-placed to help global growth: DPM Heng

The global economy may be going through its worst recession in a century, but Asia is well positioned to contribute to global growth, Deputy Prime Minister Heng Swee Keat said yesterday.

Noting that China is the second largest economy in the world, and that the 10 Asean economies grew around 5 per cent last year, Mr Heng said the outlook for Asia remains bright.

Asia's economic fundamentals are strong, too, having undertaken reforms after the Asian and global financial crises, he added.

"Many Asian economies have a large and growing middle class, providing a strong base for production and consumption. Asia is home to a vibrant start-up ecosystem and to many innovative companies."

He said all countries and businesses will have to make adjustments in a post-Covid-19 world, which is likely to place a bigger premium on supply chain resilience, digitalisation and innovation, as well as new areas of growth.

Mr Heng, who is also the Finance Minister, was giving a keynote address at the FutureChina Global Forum, whose theme is A Resilient Future: Post-Pandemic Transformation and Opportunities in China and Asean.

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The annual forum brings together government and business leaders as well as leading thinkers on a range of China-related issues.

The forum, which ends tomorrow, is held virtually this year because of the Covid-19 pandemic.

Mr Heng spoke of what countries can do to contribute to the region's growth and build a more resilient future.

First, they need to stay open and connected to the world, while reforming their economies so that globalisation works for all.

Singapore is reviewing its work pass policies, strengthening fair consideration, upskilling workers and strengthening social safety nets for those affected by economic disruption, he said.

"But we must not undermine what has made us successful by closing ourselves off from the world...

"We must continue to signal our commitment to multilateralism, and to free and open trade."

China, too, he said, is continuing to reform its economy under a new economic model of "dual circulation" - defined as "taking the domestic market as the mainstay while letting internal and external markets boost each other".

Mr Heng said that while China's reliance on its domestic market will grow, "international circulation" will not diminish in importance, and the two types of circulation must reinforce each other.

Singapore also has to strengthen its connectivity with the region and the world.

It is facilitating the movement of goods, data and people in various ways, including working with like-minded partners to keep trade lines and supply chains open, having smart cities initiatives with Asean and China, plus opening its borders for essential business and official travel with China, Malaysia, Brunei, South Korea and Japan, he added.

And Singapore must build partnerships among businesses.

Examples he cited include the Emerging Stronger Taskforce, to find new bright spots in Singapore and the region; the industry-led Alliances for Action, to prototype new solutions quickly in areas such as smart commerce and sustainability; and cross-border collaborations in areas like infrastructure.