Opening Speech by Mr Edwin Tong SC, Minister for Culture, Community and Youth, and Second Minister for Law, at SIAC China Conference 2024

11 JUL 2024

Mr Zhang Xiong, Deputy Secretary General of the Shanghai Municipal People’s Government

Ms Lucy Reed, President of SIAC Court of Arbitration

Ms Gloria Lim, CEO of SIAC

Friends and colleagues from China and Singapore

Distinguished Guests

Ladies and Gentlemen

Introduction

  1. Good morning to everyone. 大家早上好！
  1. Very happy to see so many familiar faces standing here from where I am in the audience – not just from Singapore, but also from Shanghai and the rest of China. In fact, I see a few of our Shanghai exchange lawyers, as well as practitioners whom we met yesterday, and also when I was in Shanghai earlier this year in January. Very good to see all of you again!
  1. I am very glad to be back in Shanghai again. When I last did a check, I think this is my seventh visit to Shanghai in an official capacity, and my second time this year.
  1. Earlier this week, I co-chaired the fifth Singapore-Shanghai Comprehensive Cooperation Council (SSCCC)with Shanghai Mayor, Mr Gong Zheng. We had a very fruitful SSCCC meeting, with several concrete deliverables, a couple of MOUs that were signed, which entrenched and made our cooperation efforts a lot more sustainable. We expect a very busy year ahead for both sides as we look to carrying out the rest of the agenda items of the SSCCC.

Singapore-Shanghai Bilateral Relations

  1. I will speak a little bit about what we discussed at SSCCC to set the business context in the landscape in which we are operating. Because, as you know, arbitration does not operate in a vacuum – it operates in the context of promoting business, helping business along, in as much as investment mechanisms do.
  1. I will then speak a little about the arbitration landscape, both in Singapore with the SIAC, and in China and Shanghai, in particular, with the Shanghai International Arbitration Centre (SHIAC), and how I believe this space can grow in the context of the operating environment that we see ourselves in.
  1. The SSCCC is the newest of the eight provincial business councils that Singapore has with China. But it has achieved quite a bit since 2019. In fact, despite the fact that most of the period of the last five years was blighted by COVID-19, SSCCC has been quite forward-looking – looking at parts of the economy that are new, novel, and how both Singapore and Shanghai share common and mutual interests in pushing aspects of digital economy, green sustainability and also people-to-people exchange.
  1. I think there are two key reasons why the SSCCC has made such great strides.

(a) The first is the strong leadership and support of the Shanghai Municipal People’s Government, especially my co-Chair Mayor Gong Zheng, and vice co-Chair Vice Mayor Hua Yuan. They have both been very open to ideas, very forward-thinking in their approach, and very driven by outcomes that will benefit both cities.

(b) The second, I believe, is the many similarities that we share in Singapore with Shanghai. We have many areas of common interest – areas that we are concerned about, areas that we can cooperate on, as well as common challenges which we can share experiences on. We are also both international business and financial hubs, and we aim to provide top-class professional services to enable transactions to take place within our jurisdictions. We are both shipping hubs. Our ports serve as crucial gateways for international trade. The Port of Shanghai and the Port of Singapore are in fact amongst the two busiest ports in the world. Our people are highly educated, with a very strong global outlook, and strong work ethic.

Current Operating Environment

  1. If you also look at the operating environment that we see ourselves in, it would just take some numbers to give us an indication of where we are.

(a) If you look at the world's growth rate today, globally, it is at about 3.2%. But if you zero in on Asia alone, it is about 4.5%, which shows that Asia is growing at a pace and rate that is faster than most other regions in the world.

(b) Second, in Asia, we have 705 million young people. By young, it is defined as age 15 to 24. And that accounts for 60% of the world’s total population of young people.

(c) In 2020, we had 2 billion people which we regard as middle class in Asia. By 2030, we expect that number to grow to 3.5 billion. As a number and proportion, by the year 2030, this represents about two-thirds of the world's middle class.

  1. That gives you a sense of where we are in Asia. There are many other statistics and much more you can make out of it. But this gives you an idea – young population, fast-growing middle class, and in some key parts of Asia in particular, rapid urbanisation and industrialisation.
  1. On top of this, today, ASEAN’s economy accounts for about US$3.6 trillion. If you group all 10 countries in ASEAN, we can collectively say that this economy is about the fifth largest in the world. In about five to six years’ time, we expect this to grow to over US$4.5 trillion. So again, the rate of growth in ASEAN is at a pace that is faster, probably outstripping many other regions in the world. But also, by 2030, if we get to US$4.5 trillion, it represents the fourth largest economy in the world. So collectively, in this region, you have China, India, Japan, Korea, ASEAN, all of which contributes to what I said at the outset – a faster pace of growth in Asia than anywhere else in the world.
  1. If you zero in on China, China’s GDP today stands at US$18 trillion. It is the second largest economy in the world currently and looks as if there is no sign of any abating. It is moving on – production, exports, new emerging areas, technology, AI, green sustainability, digital economy – all that powering the economy of the next generation.
  1. So that is the context in which both Singapore and Shanghai, if you look at the SSCCC, are operating in.

Strong Bilateral Relations between Singapore and Shanghai

  1. We enjoy, as two cities, a deep and long-lasting relationship, which span across a broad range of different areas. That includes the Belt and Road Initiative, financial services, technology, innovation, urban governance, people-to-people exchanges, and as I said, the digital economy. In some cases, we may be competitors. But that is not necessarily a bad thing. It is good to have competition, sometimes friendly, sometimes a little less friendly, a bit more tense. But it gives you a sense of trying to push the economy forward, with development, with a little bit of friendly competition on both sides.
  1. If there are a few cities which are strong in certain areas in the region, it will only make the overall region more attractive for such work. If we can have such a posture, attracting work, being business friendly, bringing more investments into the region, overall, the region will grow.
  1. One such area of work, I believe you will see a growth in, is international arbitration, or more broadly, international dispute resolution.
  1. China and Shanghai have improved significantly in this aspect over the last few years. Let me just give you a couple of stats to make this point.

(a) If you pick up the latest Queen Mary University of London and White & Case’s International Arbitration Survey, both Beijing and Shanghai have overtaken Stockholm, which was once seen as the traditional arbitration hub as the preferred seat of arbitration.

(b) Beijing was ranked 6th together with New York, which is another known traditional arbitration hub, and Shanghai was ranked 8th, just below New York and Beijing. The China International Economic and Trade Arbitration Commission (CIETAC) today is also the 5th most preferred arbitral institution in the world.

(c) Furthermore, the international caseloads of Chinese arbitral institutions have increased steadily. If you just take SHIAC, their international caseload increased by 72%, from 125 in 2019, to 215 in 2023.

  1. I would say this is not surprising in many aspects, as China has been proactive and taken bold steps to develop international arbitration and dispute resolution as a whole in a country.

(a) Like Singapore, China has developed a full suite of dispute resolution services, including international arbitration, international mediation, and international commercial court.

(b) Many provinces have also set up have an integrated dispute resolution complex like what we see in Maxwell Chambers in Singapore, to house dispute resolution institutions and top-class hearing facilities all under one roof. The SIAC Shanghai rep office is in fact housed in the Shanghai International Dispute Resolution Centre.

  1. But China developing its international dispute resolution services did not prevent our institutions from working together. I think the growth of the two institutions have been independent, but also complementary.
  1. Our dispute resolution institutions, including SIAC, SIMC, SCMA and of course Maxwell Chambers, have entered into no less than 20 MOUs with partners in China, including Shanghai. These MOUs allow us to collaborate strongly on joint events, training, marketing, and share best practices. I think such close relations with knowledge transfer between our dispute resolution institutions are win-win for both sides.
  1. I hope that you can continue to strengthen that partnership and allow that friendship to develop into something that, as I said, is friendly competition, but also allows both sides to be boosted by development and ideals in the agenda. For the same reason, we encourage our lawyers, in-house counsel, arbitrators and mediators to network and interact a lot more with one another so that they can understand each other better, and in turn support the parties in dispute better.
  1. So overall, I believe there is tremendous opportunity in Asia, and for dispute resolution services, there is a headroom for growth. SIAC and SHIAC are examples that we can both grow together by serving different markets and, in some cases, coming together for collaboration.
  1. In this context, if you look at cases today, and most of you are experienced in arbitration either as counsel, as arbitrators, or you administer arbitration, you will see that cases today are seldom siloed in one domestic jurisdiction, or even in one particular industry. It is spread across a complex array of different types of industries, and more likely than not, across different jurisdictions, bringing different regulations, different policies, different laws into play. The supply chain is also becoming more complex, with suppliers and consumers from different parts of the world, intermingling, coming across one another, sometimes in the virtual space. Therefore, any dispute that arises will invariably involve multiple parties from different jurisdictions.
  1. In some cases, as we have experienced, it is not easy to have SIAC be the chosen forum. Because one party is from Singapore, and the other is from other parts of the world, and you want to find a neutral forum, it is not always likely that you get to insist that Singapore will be the forum.
  1. Likewise, between a Chinese party and a non-Chinese party, I am sure you will find it challenging in some cases to insist on China or even Hong Kong as the venue or the seat unless there is significant leverage or bargaining power. But otherwise, all things considered, you tend to find that you go to a different forum that is different from the parties, and different from where the transaction might well be taking place.

Singapore As A Trusted Option

  1. In these cases, if you are not able to have China or Hong Kong as an arbitration forum, then I would say Singapore and SIAC offer an attractive option in this regard, for a couple of reasons:

(a) First, we have, as you have in China, a strong foundation built on the rule of law. We look at our principles, the development of our institutions, our laws, everything through the lens of what makes the right decision from the context of the rule of law. Our courts and SIAC arbitrators decide every case based on the merits of the case alone, and not based on nationality, background, parties, or counsel.

(b) Second, our arbitration regime is open. What does that mean? It means parties can engage counsel and arbitrators of any nationality. At SIAC, on last count, we have more than 700 arbitrators coming from 40 different jurisdictions. This also means that if you are a Chinese counsel or a Chinese arbitrator, you can represent your clients in Singapore in an arbitration, even it is governed by Singapore law, and you do not need to register with us or get a separate licence to conduct an arbitration. And if you are a business, you can engage the Chinese law firm or the lawyer that you are most comfortable with for such an arbitration.

(c) Third, our people are familiar with each other which makes working together smoother. Sometimes, the language, the cultural preferences, and the kind of contextual nuances, these are all important soft factors, as we manage and navigate the arbitration.

(a) Our law firms and lawyers work closely with each other. In fact, we are seeking to increase that pool with the Singapore-Shanghai Lawyers Exchange Programme, where lawyers from respective jurisdictions spend time embedded in the practices of the other jurisdiction.

(b) Last evening, we hosted a dinner. I went around speaking to various lawyers who have come back from that experience in Singapore, as well as lawyers who are currently now placed in various leading firms in Shanghai, about their experiences. They told me exactly what I thought was the real benefit of this programme – that beyond learning about the laws, learning about the way in which regulations take place and what kinds of regulations regulate what transactions, they understood the contextual nuances a lot better by being embedded in the firm, working side by side with a fellow Singapore or Chinese lawyer.

(c) SIAC, as Gloria mentioned, has also Chinese nationals on their Board, Court and Secretariat as well. As I mentioned earlier, we have 700 arbitrators, and a sizable number – more than 40 – are from China.

(d) Fourth, we are widely accepted by parties from around the world, not just in Asia, and your counterparties would likely accept us if offered as a choice.

(a) The same international arbitration survey which I mentioned earlier, found both Singapore and SIAC to be amongst the top five most preferred seats and institutions in arbitration in all regions, including Latin America and Africa.

(b) So, familiarity, brand name, understanding, socialising, the fact that we have an extensive panel from different jurisdictions, arbitrators which come from common law jurisdictions, as well as civil law jurisdictions, are all fairly well-known.

(e) So overall, as we look at the space in which both Singapore and Shanghai are operating in – to recap, growing headroom, more businesses coming in, FDI has remained strong over the last couple of years, even with COVID-19, lots of growth potential in ASEAN, lots of growth potential in Greater China and the rest of Asia.

(a) Shanghai can operate as a gateway to the rest of Greater China, and Singapore could operate as a gateway into the rest of ASEAN.

(b) When there are Shanghai companies that wish to break out of the Chinese market, under the SSCCC, we make an attempt to try to partner them with the right Singapore entities and companies, partner them so that they can grow their businesses into the rest of ASEAN.

(c) Likewise, when Singapore businesses come into China. Shanghai is the natural landing point. They come into Shanghai, partner with a local company here, and find a business model that works for the particular business for the rest of Greater China.

  1. I feel that this model works in the same way for arbitration. As we grow the space, as we look at increasing business in this part of the world, dispute resolution, including arbitration, mediation, conciliation and neutral evaluation, are all going to be increasingly important, as we allow parties to make the investment, and also ensure that the investment, should it have a dispute, can be fairly and objectively, openly and transparently resolved.

Conclusion

  1. Before I conclude, I want to join Gloria and make a plug for the Singapore Convention Week (SC Week), which happens in Singapore around the same time every year. This year, it will be on from 26 August to 30 August. It will be a week of events focused on the exchange of thought leadership, coming together to discuss the emerging trends in dispute resolution, including arbitration, mediation, and litigation. There will also importantly be networking events, where you can interact with practitioners from all over the world in one space.
  1. These are important because in as much as you go to a conference like this, to learn about trends, learn about the law, learn about the new rules, and so on, it is almost as important, if not more important, to come away with it with new context, new networks from different jurisdictions, because these contexts help us to expand the ability to serve our clients better in different jurisdictions. You can easily tap into someone, pick up the phone, or in this case, have a chat with someone from a different jurisdiction, where your client might be trying to think of penetrating or going into. So, these kinds of networking events are not unimportant.
  1. Finally, if you want to learn a bit more about Singapore, the SC Week will give you that platform, as I said, in different aspects of dispute resolution, expand your professional network and you will find that it is a pretty good platform and also a fun one on which to do so.
  1. On that note, let me end by wishing all of you a very good day ahead for this event. I had a quick look at the programme, and I think it covers all the emerging areas and you have got a number of great speakers at the panels. I am sure you would be looking forward to the sessions and to the panel discussions later this afternoon.
  1. Thank you.

Last updated on 11 July 2024