China-Singapore Bilateral Cooperation: Agreement on Mutual Visa Exemption

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On 9th February 2024, a wave of change swept across the China-Singapore bilateral relations with the implementation of the mutual visa exemption agreement. This holds immense potential to reshape the economic landscape, tourism industries, and social fabric of both nations. From the cautious establishment of official ties due to Cold War dynamics to the subsequent flourishing of diplomatic connections, particularly demonstrated by the strong connection between two political leaders Lee Kuan Yew and Deng Xiaoping, historical precedents have paved the way for the contemporary cooperative framework. However, a careful analysis necessitates examining not only the potential benefits but also the challenges and considerations that lie ahead.

China-Singapore Bilateral Relations

In 2023, China-Singapore bilateral relations were upgraded from an “All-Round Cooperative Partnership Progressing with the Times” to an “All-round High-Quality Future Oriented Partnership.” It reflects the mutual aspirations of both countries regarding the desired direction and nature of their evolving relations. This is rooted in history as China and Singapore underwent rapid political changes while prioritizing economic development in the early phase of their diplomatic relations.

Singapore’s exceptional economic growth since its independence in 1965, transforming from a “third world to first” under the leadership of Prime Minister Lee Kuan Yew, became a paradigm for one-party rule prosperity. This resonated with the Chinese communist party, undergoing economic reforms in the late 1970s, seeking inspiration from Singapore. Most importantly, personal ties between leaders Deng Xiaoping and Lee further solidified the relationship, with Deng endorsing Singapore as a development model for China in 1992. Subsequent Chinese leaders including Li Peng and Qiao Shi also praised the Singaporean governance model and sent cadres for training.

Now, the China-Singapore cooperation model is a multifaceted one. Since 2013, China has been Singapore’s largest trading partner, and Singapore has been China’s largest foreign investor. In 2009, China and Singapore signed a bilateral free trade agreement with Singapore which was the first of its kind for China with an Asian country. The cooperative framework extends beyond the economic realm as demonstrated by three Government-to-Government projects, encompassing the China-Singapore Suzhou Industrial Park, the Sino-Singapore Tianjin Eco-City, and the China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity. These initiatives signify the depth of cooperation, extending beyond economic considerations to encompass governance, connectivity, and the well-being of the populace. The recent signing of a mutual visa exemption agreement is anticipated to catalyze advancements across various sectors, offering a substantial impetus to the multifaceted collaboration between China and Singapore.

Agreement on Mutual Visa Exemption

China and Singapore signed a landmark agreement on mutual visa exemption during the 19th meeting of the China-Singapore Joint Council for Bilateral Cooperation (JCBC) on January 25, 2024. This will allow citizens of both countries to enter each other country without a visa for tourism, family visits, and business or other private matters, with a stay of no more than 30 days. For those intending to engage in activities such as employment and journalism, prior approval is required, and those planning to stay in the other country for more than 30 days must obtain the corresponding visa before entering.

Before that, a 15-day visa-free policy was in place for Singapore citizens who intend to travel to China. However, it was suspended when China imposed travel restrictions during the Covid-19 pandemic. This new agreement is set to be a game changer in China-Singapore relations as it will not only bring the people of both nations closer but also help political leaders build a connection of trust and confidence.

Economic Engines Revving Up

During the 19th JCBC meeting, both countries also reached a protocol to further upgrade the China-Singapore Free Trade Agreement (CSFTA) which was originally signed in 2009. Under the protocol, the two countries committed to a negative-list model of services and investment opening up, which will provide a broader space for investors and service providers. For instance, China will lift foreign equity limits – currently set at 50 percent – for Singapore investors in 22 sectors such as construction, as well as retail and wholesale. In 2021, China was Singapore’s fourth-largest trading partner in services, while Singapore was China’s third-largest.

Figure 1: Rising Singapore-China Bilateral Trade (1990-2014)

In 2021, China recorded exports amounting to $53.9 billion to Singapore, while Singapore’s exports to China reached $56.8 billion. Over the past 26 years, the annualized growth rate of Chinese exports to Singapore has been 10.6%, escalating from $3.89 billion in 1995 to $53.9 billion in 2021. In parallel, Singapore’s exports to China have experienced an annualized growth rate of 11.8%, progressing from $3.13 billion in 1995 to $56.8 billion in 2021. Recognized as a pivotal global trade hub, Singapore serves as a strategic conduit for Chinese enterprises seeking entry into the expansive Southeast Asian market, comprising over 690 million potential consumers. Simultaneously, China’s extensive consumer market, housing 1.4 billion people, acts as an irresistible magnet for Singaporean enterprises. The recently established visa-free entry agreement is poised to substantially augment trade and investment activities between the two nations, facilitating increased business engagements and the formation of new trade agreements, thereby catalyzing economic advancement for both entities.

Tourism Takes Flight

No doubt, it is the tourism industries of both countries that will benefit the most due to the visa exemption agreement. Singapore, already a sought-after destination, is gradually rebounding from the adverse impacts of the COVID-19 pandemic on its tourism sector. In 2023, Singapore witnessed a notable surge in visitor arrivals, marking a 115 percent increase to reach 13.6 million, equivalent to approximately 71 percent of pre-pandemic levels, with 1.4 million comprising Chinese tourists. Forecasts anticipate continued recovery in the tourism sector in 2024, attributed to the implementation of the mutual 30-day visa-free travel arrangement between China and Singapore, with Chinese tourists ranking second highest among all nations in 2023. Concurrently, the Chinese tourism sector has demonstrated a remarkable resurgence in revenue, reaching $730 billion in 2023, representing an impressive 91 percent of the 2019 figure.

The tangible impact of the visa exemption agreement is readily apparent, evidenced by the swift and heightened interest among tourists from both nations eager to capitalize on the newly established visa-free entry provisions. Notably, travel platform Trip.com reported a substantial surge in real-time search popularity for Singapore immediately following the announcement. Within a mere 10 minutes post-announcement, the heat index for travel products related to Singapore surged by over 30 percent and sustained an upward trajectory. Concurrently, there was a pronounced surge in enthusiasm among Singaporean travelers for visits to China, with Trip.com data indicating a notable increase of more than 20 percent in searches for China by Singaporean tourists. These indicators collectively underscore a rapid and promising upswing in the tourism industries of both nations in the forthcoming years.

People-to-People Bridges

Beyond business and tourism, the agreement fosters deeper connections between individuals. On the eve of signing the agreement, Chinese spokesperson Wang Wenbin told that “entry into force of the agreement before the Chinese New Year of the Dragon is a new year gift for the peoples of the two countries.” According to Trip.com data as of January 24, 2024, bookings for the Spring Festival holidays by Chinese tourists to Singapore surged more than 14 times in comparison to the previous year.

Visa-free travel facilitates cultural exchanges, with student programs like the Singapore-China Joint Premier Scholarship Program witnessing a substantial increase in participation. Besides that, there exist different training programs for both public and private sector officials in between the nations. As such, the Singapore-China Youth Interns Exchange Scheme was officially launched in July this year. These person-to-person interactions build a strong foundation for a more robust and multifaceted relationship, fostering mutual respect and appreciation between the two societies.

Strategic Implications

The visa exemption agreement may harbor strategic objectives within its purview. China has made arrangements to sign similar agreements with two other Southeast Asian nations Thailand and Malaysia. This appears to align with China’s overarching foreign policy goal of utilizing soft power instruments to cultivate amicable relationships with Southeast Asian nations, thereby expanding its regional influence. Crucially, the maritime domains of all three nations encompass the strategically pivotal “Strait of Malacca,” a conduit of paramount significance for Chinese global trade, particularly in terms of energy imports. The signing of such agreements will definitely help China maintain cordial relations with these countries while securing its uninterrupted access to the important sea route.

Figure 2: Map of Strait of Malacca

In recent years, China has been actively pursuing “visa exemption” agreements with different countries. China has successfully concluded visa exemption agreements with 157 countries, streamlined visa procedures with 44 nations, and achieved comprehensive reciprocal visa exemption status with 22 countries. Furthermore, over 60 countries and regions extend visa-free or visa-on-arrival privileges to Chinese citizens. Such agreement signifies an opening to the world, aligning with its “peaceful rise” focused on peaceful development and regional cooperation. It also elevates the value of the Chinese passport, currently ranked 52nd in the Passport Index 2024. Nonetheless, such development helps China to rebuild its international image and fosters goodwill on the global stage.

The agreement holds substantial strategic significance for Singapore, exerting a pronounced impact on its trade and economic dynamics and reinforcing its position as a regional hub. By fostering close economic ties with China, Singapore not only bolsters its economic resilience but also mitigates potential over-reliance on any singular power. This approach aligns with Singapore’s strategy of diversifying partnerships to ensure a robust and multifaceted foreign policy. The burgeoning partnership with China serves as a complement to Singapore’s historically close ties with the West, affording the nation a unique diplomatic advantage. Leveraging its balanced relationships, Singapore can navigate diplomatic intricacies, contributing to its evolving role as a neutral interpreter of China for the Western world, thereby facilitating diplomatic engagement between these powerful countries.

Nevertheless, this agreement sets a precedent for further regional integration and visa liberalization within Southeast Asia, facilitating trade, people-to-people exchanges, and regional cooperation. The success of this agreement could encourage other countries to establish similar arrangements, contributing to a more interconnected and open global community.

Challenges and the Road Ahead

It is important to acknowledge that while such a visa exemption agreement will facilitate smooth travel for the citizens of both countries, there might be several technical challenges. Both countries need robust immigration control measures to ensure security, while harmonization of different security protocols might prove difficult. Additionally, raising public awareness about the regulations and eligibility criteria is crucial to avoid confusion and ensure seamless travel experiences. Addressing these challenges with proactive measures and open communication will be key to reaping the full benefits of this agreement.

While increased people-to-people connection will have a positive impact on the bilateral relations between China and Singapore, certain issues necessitate meticulous attention to ensure the sustainability of such developments. Issues like Singapore’s support to Taiwan and disputes regarding the South China Sea need to be addressed through discussion to make a common ground. For instance, China condemned Singapore for sending nine armored vehicles to Taiwan back in 2016 which was eventually seized by the Chinese government. Singapore also expressed its support to the decision of a Hague-based international tribunal which dismissed the legal basis of Chinese claims in the South China Sea based on the Chinese nine-dash line. Unless such issues are addressed properly, it will be difficult for both countries to reap the benefits of such a visa exemption agreement to its maximum level.

Conclusion

The China-Singapore visa exemption agreement is more than just a travel perk; it is a strategic move with far-reaching implications. By working together to address potential challenges and leverage the full potential of such an agreement, China and Singapore can set an example for mutually beneficial cooperation, paving the way for a brighter future not only for themselves but also for the region. This agreement marks a significant milestone in their bilateral relations, one that will undoubtedly shape the years to come.

– Muhammad Estiak Hussain is a Research Assistant at the KRF Center for Bangladesh and Global Affairs (CBGA).

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