Delivering a keynote speech at the New Economy Conference held by Singapore's Economic Development Board (EDB) Society and its 15 partners from public sector agencies, the deputy prime minister told the 1,200 audiences that Singapore must "focus on how we cope with, and benefit from, the emergence of the Chinese economy."

Lee pointed out that "the biggest new variable" in the equation of world economy is China, which is already a global center for hardware manufacturing and also rapidly building up its capability in the more knowledge intensive areas of software and service.

Tech manufacturers worldwide are expanding their operations in China lured by low costs, abundant talents, industrious workers and professionals and the hope of a huge domestic markets, he added.

Lee stressed that " China's rise is, beyond doubt, a plus" as international trade is a win-win endeavor and it is far better to trade with an affluent partner than impoverished one.

"A more prosperous China will mean a bigger market, more investment opportunities and a bigger trading partner," He said. " As China exports more, it will also import more, because China cannot run a balance of payments surplus indefinitely."

He also emphasized that whether a country can emerge better off in the context of overall wealthier world economy depends whether the country can find ways to benefit from China's progress and can develop capabilities and strengths of its own."

Countries competing head-on with China may suffer painful adjustments but those who have kept ahead will find opportunities to expand trade and investment with China and benefit from China's growth, he added.

The deputy prime minister urged Singapore companies to update knowledge of China and engage China effectively, saying a pre- requisite from any country hoping to tap on China's growth is up- to-date knowledge of the vast economy and a good understanding of how business is done there.

He said that management of Singapore companies must understand well the opportunities and complexities of the business environment in China and need to construct a network of economic agencies that can market Singapore, gather business information and disseminate this to businesses.

He also said that Singapore has more advantage than other countries and Singapore companies must avail themselves of these advantageous conditions, referring to their proficiency in the Chinese language, their Chinese heritage and their extensive dealings with the Chinese.

"We must therefore quickly build on our knowledge of China and develop greater expertise on the country," he said.

"This would enable us to leverage on our global links to become one of the gateways between China and the rest of the world, " he said.

(People's Daily 08/02/2001)