Thank you for inviting me to speak at the inaugural CIFTIS, a milestone event for China’s growing services industry. May I congratulate MOFCOM and the Beijing Municipal Government on their strategic decision to organise CIFTIS. I have no doubts that CIFTIS will serve as a significant, international platform to promote the global trend of increasing trade in services.
Role of the services sector: World, Europe and China
The services sector plays a crucial role in the global economy. For developing economies, the services sector comprises 50% of the economy; and for developed economies, it comprises 70% of the economy. The economic structure, the mix of secondary versus tertiary activities, can significantly impact a country’s growth trajectory. This is not surprising because services sector is an attractive source of growth and provides high value-added job opportunities. A good services sector is also very important because it lowers demands on energy as well as on the environment. A comprehensive and competitive provision of services can therefore improve people’s standard of living and quality of life. This is a very important competitive advantage for all global cities looking to attract highly-mobile, quality talent, knowledge networks and dynamic firms.
Services and manufacturing sectors are not mutually exclusive, in fact they are synergistic. So to achieve a balanced and diversified economic structure, both sectors have to be promoted. Spillover effects from the manufacturing sector into the services sector can also generate business, and value-added jobs. Finally with the current slowdown in the economy, international collaboration in the services sector is very important. So drawing lessons from this global experience, China has also deemed it timely and essential for the services sector to play a greater role in China’s next phase of economic development.
All of us have admired China’s rapid growth in the last three decades. Urbanisation and market reforms have propelled the Chinese economy to be the world’s second largest economy. It has lifted half a billion people out of poverty and created a growing middle class population. Rapid economic expansion, however, introduced some economic imbalances which the Chinese 12th Five-Year Plan seeks to address. In this new vision of a more balanced growth structure for China, high-quality growth will be increasingly driven by domestic consumption, services and human capital enhancement.
As this transformation of the Chinese economy represents a significant structural reform, it is essential that the transition be handled speedily but carefully. The Singapore economy has previously undergone similar adjustments. And we would be happy to share our experience and contribute towards China’s laudable efforts to restructure her economy. Let me elaborate on three sectors that Singapore can play a role
Strengths of Singapore’s services sector and complementarities to China
First in urban solutions, Singaporean companies are established global leaders. We shape the international urban solutions agenda annually through iconic events such as the Singapore International Water Week, World Cities Summit and Singapore International Energy Week where international thought leaders in the urban solutions industry get together to exchange ideas and expertise. Since 1994, through the Singapore-China collaboration in the Suzhou Industrial Park, we have developed our master-planning and urban management expertise relevant to the Chinese environment. To this day, our urban solutions companies continue to enjoy the support of the Chinese leadership and contribute to projects spanning across Tianjin, Shandong, Guangdong, Jiangsu and many other provinces. We look forward to more opportunities to continue our collaboration.
Second in educational services, the Singapore education system enjoys an excellent reputation in Asia. Here let me emphasise on two areas where we have particular competencies. One is in our preschool, where we lay a very solid foundation in the learning of science and mathematics and also a very important foundation for the learning of languages, because Singapore is a bi-lingual nation. Second, in our emphasis on continuing education and training, we have a very comprehensive national framework providing vocational and technical training and retraining for workers. This is very important because in the life of a worker, they would have to re-adapt and re-train many times in order to hold meaningful jobs.
The third area that Singapore is well-known is as a popular medical tourist hub, because of our stringent quality of medical care and high standards in medical research and education. Several of our healthcare providers, such as Q&M Dental Group, Parkway Holdings, Healthway Medical Group, having delivered quality services back home are keen to bring our expertise to share in China. Encouraged by China’s commitment to healthcare reforms, our Singapore healthcare services providers are increasingly looking to serve the communities in China’s second-and third-tier cities.
I could continue at length and share how Singapore services can contribute to and complement China’s economic development. It is perhaps best to invite you to see for yourselves at the Singapore Pavilion that we have put up at CIFTIS where we showcase some of our services players in the areas of urban solutions, healthcare, education, transportation, retail and F&B.
Summary and closing
The growth of China’s services sector is critical to its transformation towards an inclusive, balanced economic growth model. This is particularly timely, given the expectation of slower global growth in the years ahead. Investment in services such as health-care, education and urban solutions will go significantly towards achieving inclusive and sustainable growth. As China looks towards accelerating growth in its inland regions, as well as its second and third-tier cities, I would like to encourage our services providers to contribute their expertise and experience towards achieving this high-priority objective.
Next let me also congratulate the organisers for putting together a platform such as CIFTIS, as a very highly effective way to foster innovation and sharing of experiences in the services sector. On this note, I wish everybody a very fruitful time in this event .
Thank you very much.