It's all about making connections. Networking is a crucial element of effective business practice. This is equally true for people, companies and countries.

It is also particularly vital for economies that rely heavily on trade and external economic relationships. This is the case with Singapore, which has a trade volume that is three times the size of its gross domestic product.

Lim Hng Kiang, Singapore's minister of trade and industry, says he has worked hard to build relationships with officials and businesspeople around the world. "Human connections are very important," he says.

As China's biggest trade partner in Southeast Asia, Singapore is naturally keen to maintain positive relations with China. Prime Minister Lee Hsien Loong last month paid his first visit to China since he took office last year. A primary goal of the week-long visit was to put bilateral relations back on track. Ties between the two countries had soured after his visit to Taiwan, just before he became prime minister.

At lower levels, however, bilateral relations have remained positive.

The training of Chinese officials and company executives has been an important element in bilateral ties. Singapore is among several countries that provide such training, but the city-state differs from others in that it shares cultural similarities with China.

The fact that many Singaporeans speak Mandarin makes the country's training programmes even more effective.

The Singaporean side also obtains a better understanding of China by providing the training. Many of the sessions were held at Singaporean universities and other educational institutions, but some of the programmes were conducted in China.

The two sides jointly launched the Suzhou Industrial Park in 1995, for example. It provides an excellent example to Chinese cities on how to organize industrial parks and attract investment.

Co-operation was not as smooth as expected, but Singapore still benefited from the connections that were established, Lim says.

Training courses

The Suzhou site, in East China's Jiangsu Province, was used as a venue to run training courses for mayors, vice-mayors, department directors, and other Chinese municipal officials.

Lim was minister for national development through the early years of the park's development, and the training programme was one of his responsibilities.

"Chinese officials learned from Singaporean experience, and we tried to use that to build positive connections with the Chinese Government," Lim said.

About 400 Chinese officials were trained. Most of them were in their thirties or forties, and quite a few of them have since moved on to higher positions.

"We have established lasting relationships with several hundred officials," Lim says.

"We have good friends in a range of different places now... the networking was very useful."

Sino-Singaporean trade also got a boost, topping off at US$27 billion in 2004. A small surplus in favour of Singapore represented a 38 per cent annual increase in the country's trade volume. Over the first three quarters this year, bilateral trade grew by 26 per cent.

Singapore is China's eighth biggest overseas investment target. Singaporean investments in China had hit US$25.5 billion by late-2004.

Singaporean companies used to focus on manufacturing, processing, and real estate in China, but they have begun to branch out to other sectors including infrastructure, shipping, logistics, and other services.

China's emergence as an economic power, particularly as it related to the diversion of foreign investment flows, used to raise concern in the Association of Southeast Asian Nations (ASEAN). India's experience was similar, Lim says.

Over the last three or four years, however, the countries involved have gradually started to conclude that increased integration could benefit China, India, and other ASEAN nations.

These developments will lay the foundation for greater economic integration throughout Asia, Lim says.

Asian network

He says it is already happening, for better or for worse.

"Over the last five to seven years there has been tremendous integration in the electronics sector," Lim says.

Singapore's trade in electronics with Malaysia, China, Thailand, and South Korea has been growing rapidly. Parts and components are passed through an integrated production process that extends across the ASEAN region, he adds.

Similar developments are emerging in the auto manufacturing and financial services sectors.

Lim says there will always be opposition to economic integration throughout the world; local industries often lobby governments to exercise restraint. Yet many of those who oppose integration understand that refusal to participate is counterproductive.

"The challenge for governments is coming up with ways for businesses to continue generating wealth for everyone," Lim says.

The dream of establishing a common market on par with the European Union still has a long way to go, but Lim says ASEAN is heading in that direction.

Integration of ASEAN is the first step towards the development of a common Asian market. It is a prerequisite for expansion into other parts of the continent, Lim says.

ASEAN has already signed a free trade agreement with China on goods; the exchange of services is still being negotiated.

"It is coming, but the speed with which it happens depends on the collective efforts of several governments," Lim says.

"It's difficult to predict, but it will likely happen sooner than not."

(China Daily 11/28/2005 page6)