Speech by Mr K. Shanmugam, Minister of Law and Home Affairs, at the Opening Ceremony of the Global Lawyers Forum, 9 December 2019, Guangzhou, China

09 Dec 2019 Posted in [Speeches]

Your Excellency Fu Zhenghua, Minister of Justice of the People’s Republic of China; Vice Governor; Your Excellencies; Distinguished Delegates; Ladies and Gentlemen.

1. First, let me begin by thanking Your Excellency Fu for the warm hospitality that you have extended to me and my fellow delegates and all of us here. Thank you very much.

2. We are honoured to be here at this inaugural Global Lawyers Forum.

(I) The Rise of China and the Global Order

3. This Forum intends to focus on Law, in the context of international investments, in particular BRI (the Belt and Road Initiative).

4. As we talk about that, I think it is useful to note two significant dates, ironically in December.

5. The first, this Forum date: 9 December 2019. Almost 18 years ago, on 11 December 2001, China joined the WTO (World Trade Organisation).
a. It was a radical step. There were many contrary views, even within China. But it turned out to be very positive.

b. It made a tremendous difference to China. China changed, and it made a tremendous difference to the world. China became the manufacturing centre of the world.

c. A few years ago, I was at a U.S. department store in New York, and every item I looked at, I asked them where this was made, they said it was China. Finally, the lady said, “You know, whatever you see is made in China. So you don’t need to ask where it’s made.”

d. China has made many things. Small, big, much cheaper, much faster. And international commerce has changed beyond recognition. It has brought greater prosperity across the world.

6. Now the second date, this year: 11 December 2019. The WTO appellate body will stop functioning. The panel members’ terms are expiring in two days’ time.
a. Why? Because new appointments have been blocked. There will not be enough members to decide on new or even existing cases.

b. The belief in free trade, in WTO, has soured in some countries. Support for international rules, organisations – has weakened.

7. How did we get here?
a. The system that has been developed over the last 300 years is undergoing a structural change. The shifts, dislocations, new realities, have led to trust deficits.

b. So there are serious differences of opinion on how global institutions like the WTO, IMF, World Bank should be functioning. And how different countries should be represented in these institutions. Global trade has been affected by these international trade tensions and different views on what fair trade rules are.

8. Meanwhile, looking at our own region, where I come from, Southeast Asia (SEA), China’s rise has brought new opportunities in trade, investments and markets. The linkages and the commercial relationships between China and SEA are moving fast.
a. Last month, we finished negotiations on the Regional Comprehensive Economic Partnership (RCEP). Fifteen participating countries. It will complement the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

b. We hope both the U.S. and China will consider joining the CPTPP one day, because the Asia-Pacific will be the centre of gravity for economic growth in the near future.

9. In Singapore, we are doing our own part in all of this, in a small way
a. On 7 August this year, the Singapore Convention on Mediation (SCM) was signed. It is a United Nations Convention, and it will make it easier for international commerce and to enforce mediated agreements. 46 countries signed on 8 August this year, including China. Five more signed later, so now we have 51 signatories.

b. This is a powerful show of commitment to multilateralism. It shows that countries can achieve consensus.

(II) Stability and Development: the Role of Law

10. Now, let me turn to the Role of Law, Rule of Law.

11. For us in SEA, how China will develop in this respect will have considerable impact on us.

12. The role and development of law is determined by the political system.

13. In China, in 40 years, 850 million people have been moved out of poverty. It’s a tremendous achievement, unprecedented in history. In 1978, China’s GDP per capita was US$156. Last year, it was nearly US$10,000. It is an impossible achievement, extremely challenging; but China did it.

14. Next stage now, China aims to maintain growth, eliminate absolute poverty by next year, 2020. And it is focusing on technology and new and emerging industries.

15. It’s a huge challenge for any country to move from middle-income to the next level. How can these aims be achieved?

16. History shows that at least three factors are in play.
a. One, the political system.
b. Two, the economic structure.
c. Three, the legal framework.

17. What has worked for China so far, the key factor, is that the political system has ensured political stability and at the same time policies that encouraged economic growth, so that the people’s aspirations could be met.
a. Without political stability, the economic progress would not have been possible.

b. Political stability and economic progress results in upliftment of people. It’s unfortunately not something that is understood well, that political stability is essential; a *sine qua non*.

18. If China had adopted a liberal democratic model, this progress would probably not have been possible and the majority of its people would probably not have been better off.
a. In Western liberal democracy, small groups can lobby, they can have disproportionate power. The mediation between interest groups makes progress slower. That is intentional in the system. But often the interests of the majority could be held to ransom because each interest group focuses on its own interest.

b. It is a system that can work well when the country has already reached a high level of development and literacy, and has a very strong and large middle class. Even then, we now see some problems which need to be fixed, and people’s lives are not improving as much as they would like to see.

c. Certainly, it is unlikely to work well when countries are in the early stages or even middle stages of development.

19. Criticisms of China’s political system overlook, ignore, the history of how many Western countries developed; the real progress that China has made in the last 40 years; and that such progress would probably not have been possible under any other political system.

20. The next stage for China is to ensure broad-based prosperity and move from middle-income status.

21. It generally requires a greater role for the law, to achieve the desired economic progress while maintaining political stability in a society where many are well-educated.

22. Again, looking at history, in Western societies, that development has been possible because of rule of law, which will include: protection of property rights; business certainty; equality before the law; due process; enacting clear, fair, and publicised laws; ensuring accountability before the law; impartial and effective delivery of justice.

23. The question for China will be how to shape these concepts and fit them with its own national conditions and political system. To what extent will these specific factors be relevant, and to what extent will they have to be adapted?

24. And quite importantly, fundamentally, how to do this without threatening political stability.

25. It will be an experiment that will have huge implications for China and for all of us.

(III) Singapore-China Legal Cooperation

26. Thirdly and finally, let me touch on the legal cooperation between Singapore and China.

27. Singapore and China have committed to closer judicial and legal cooperation.
a. Since 2018, legal and judicial cooperation has been included as an agenda item under BRI cooperation at the annual JCBC (Joint Council on Bilateral Cooperation) meeting chaired at the Deputy Prime Minister level – by a Politburo Standing Committee Member on the Chinese side and the Deputy Prime Minister on the Singapore side.

b. In November last year, Premier Li Keqiang made an official visit to Singapore. In a joint statement issued during that visit, both sides agreed to strengthen legal and judicial cooperation and exchanges.

28. We are stepping up exchanges and cooperation. At the Second Belt and Road Forum this year, Prime Minister Lee and President Xi also agreed that legal and judicial cooperation would be a new area of collaboration between Singapore and China.

29. The BRI involves high-value, long-term and complex investments. Singapore will be happy to work with China.
a. We are open, trusted, and neutral.

b. We have strong economic and trade linkages with China.

i. China has been Singapore’s largest trading partner since 2013.

ii. Singapore has been China’s largest foreign investor since 2013.

iii. Singapore is also China’s largest foreign investment destination along the Belt and Road in 2018, taking close to 23% of the investment flow.
c. Singapore has developed expertise and products to handle disputes relating to large-scale infrastructure projects. For example, the Singapore Infrastructure Dispute Management Protocol incorporates novel features, which take a proactive dispute prevention approach – even before the dispute arises.

30. We hope to work together to enhance the suite of dispute resolution options including arbitration, mediation and litigation, to support businesses.

31. With the development of the Greater Bay Area and the BRI, more Chinese companies are becoming international. They are investing in projects overseas. Their legal and dispute resolution needs will grow.

32. They present new opportunities for us to work together. We look forward to deepening our partnership.

Conclusion

33. Once again, we thank the Ministry of Justice for organising this Forum. I hope it grows from strength to strength. Thank you for having me here. Wishing everyone a productive Global Lawyers Forum.

Last updated on 9 Dec 2019