Speech

Foreign Secretary's speech on the UK in Asia Pacific

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Foreign Secretary Philip Hammond gave a speech on the UK in Asia Pacific at the S.Rajaratnam School of International Studies, Singapore.

Foreign Secretary

Where better to start my first tour of Asia as Foreign Secretary than in Singapore? My first bilateral on taking office was with Foreign Minister Shanmugam. I visited three times as Secretary of State for Defence. And I am delighted to be back here today.

Her Majesty the Queen has made three State Visits to Singapore. It was a pleasure to hear today from President Tan how much he enjoyed Singapore’s inaugural State Visit to the UK last year. And we were delighted to welcome Prime Minister Lee to London last March, where he met thousands of the Singaporeans studying and working in the UK at a Singapore Day in London’s Victoria Park.

This year, of course, is the 50th anniversary of Singapore’s independence and the 50th anniversary of diplomatic relations between our two countries. It seems fitting, then, that I am speaking today under the auspices of RSIS, which takes its name from S. Rajaratnam, a one-time resident of London, your first Foreign Minister, and one of the pioneer leaders of modern Singapore.

S.Rajaratnam was a visionary: he foresaw Singapore’s potential to become a multiracial ‘global city’; he brought Singapore into the United Nations; and he was one of the “founding fathers” of ASEAN.

Such was his prescience that I very much doubt that he would be surprised by the manner in which global economic and political power is shifting Eastwards. Indeed, the 21st Century was already being hailed as the “Asian Century” before it had even started. Two of the world’s top three economies are now Asian.

The continent matters: it matters in relation to the development of the rules-based international system which maintains global security; it matters as an engine of the growth which drives global prosperity; and it matters in relation to resolving issues like climate change, without which that growth will be unsustainable.

To some, the global crises we face on any given day, whether it’s Ebola, ISIL, Ukraine – might obscure this long-term, geo-strategic trend.

But the UK Government has not and will not let itself be distracted from the importance of building strategic relationships for Britain across the Asia Pacific region which are fit for the 21st Century.

Indeed, few western countries can claim to know Asia as well as Britain. We first attempted to find a trade route to China in the 16th century. It took us four decades to find and another three to establish a trading post, but these early lessons in persistence have not been forgotten. We have been part of the Singapore story for two centuries. Along with Australia and New Zealand, two of the stops on my current trip, our history is so closely interwoven that we have ties which the oceans cannot loosen.

My predecessor, William Hague, told an audience here in Singapore three years ago that “We are looking East as never before.”

And he meant it. We’ve expanded our diplomatic network in China, to ensure we are placed to respond to China’s historic re-emergence as a global power, and to build what Premier Li has described as an “indispensable partnership” between our two countries - opening a new Consulate in Wuhan last month and ramping up the number of our diplomats in China, so that they can get out of the capital to build new links in fast-growing cities like Harbin and Qingdao.

We have reopened our Embassy in Laos to give us diplomatic representation in all of ASEAN and we have opened defence sections in Hanoi and Rangoon and accredited a Defence Attaché to the Philippines.

…And our government is pursuing an “All-of-Asia” policy to build partnerships between equals which can help us confront our common challenges and maximise our shared opportunities, including through mechanisms like the Ministerial-level Strategic Dialogue with the Republic of Korea and recently, a couple of weeks ago in London, our first ever 2+2 meeting with Japan which I had the honour to host.

Our partnerships in Asia rest on three pillars:

  1. strong people-to-people links and deep bilateral relationships across the Asia Pacific region;
  2. a shared vision of free trade and economic openness; and
  3. common recognition of our responsibilities to maintain the rules-based international system which protects our shared interests.

Our historical, cultural and commercial links mean the UK already enjoys thriving ties with the Asia Pacific region. We share with you in Singapore the worldwide language of business, science and engineering. Britain boasts a leading financial and creative hub, one of the world’s few truly global cities and is home to many vibrant Asian communities: 37,000 UK residents were born here in Singapore; 175,000 in Australia and New Zealand combined; and nearly 200,000 UK residents were born in China.

And Britain is also home to more of the top 100 universities in the world than any other country bar the United States, all of them welcoming students from across the Asia Pacific region.

And geographical distance has been no barrier to the development of shared values between the UK and countries in the region. With three of the countries that I am visiting – Singapore, Australia and New Zealand – we not only share a common language but common law traditions and Commonwealth membership as well. The same applies, of course, to India – that giant of democracy and integral part of the rising Asia story.

This year, we mark the 800th anniversary of the sealing of Magna Carta, which took place, as it happens, in my Runnymede and Weybridge constituency – I thought I should mention that! This ancient document agreed between a 13th Century English King and the barons who challenged him enshrined, for the first time, the principle of equality before the law that lies at the heart of our rules-based system of governance.

In the UK, in the Commonwealth, and beyond, it has had a profound impact in the development of the rule of law, strong institutions and accountable government on which our societies have built enduring prosperity and stability. Nowhere is this truer than here in Singapore where there is a close correlation between the rule of law and the prosperity generated by global investment.

These shared traditions bind the wider region, and beyond. Indeed, judges from the UK, Australia and New Zealand sit on the Court of Final Appeal in Hong Kong, where the rule of law has been a fundamental component of continuing economic success.

And as countries such as Indonesia press ahead with ambitious plans to tackle corruption we should be ready to share our experiences, not as a one size fits all model, but as a set of basic principles which have been successfully adopted and adapted to underpin prosperity in many very different Asian nations.

The story of Asia in the 21st Century will be, first and foremost, a story of rapid economic growth.

That is certainly true of a country like Indonesia where President Jokowi’s reform agenda combined with Asia’s third largest population could, if it’s handled correctly, unleash a growth bonanza. So, perhaps, in honour of Indonesia’s potential, we should start to spell BRIIC with two ‘I’s.

Britain’s economy is on the move too. Ambassador, you said in your introductory remarks that Britain was the world’s sixth largest economy and I don’t often engage in Schadenfreude with my French neighbours, but we are now the world’s fifth largest economy!

The government in which I serve has taken some very tough decisions in order to rebuild and reinvigorate Britain’s economy to create the most dynamic, job-creating, tax and regulation busting, investor-friendly environment in Europe, with the fastest growth in the G7; an economy set, by some projections, to become the largest in Europe by 2030.

That means the fundamentals have never been better for flourishing trade and investment relationships between the UK and the Asia Pacific region. The statistics tell the story: in Singapore alone there are over 1,000 British companies. The UK’s stock of investment in Asia reached a new high of £96 billion in 2013. And when he spoke here three years ago, William Hague announced our ambition to make Britain the home of Asian investment and Asian finance in Europe. And that is just what we’ve been doing.

Nearly three quarters of Singapore’s investment into the EU goes to the UK. Chinese investment in the UK has grown by 85% a year for the last five years. Last November, the UK Government launched our first RMB-denominated sovereign bond, reflecting the growing interconnectedness of financial centres in London, Hong Kong and Shanghai. Japanese companies now employ over 140,000 people in the UK. Indeed, last year, more cars were made in a single Nissan plant in Sunderland, in the North East of England, than in the whole of Italy.

This can be just a taste of things to come: free trade is in Britain’s DNA and that is the code that is unlocking prosperity across the Asia Pacific region. So it is in all our interests to maintain the momentum behind trade and investment liberalisation in the region.

This is a process which can be led right here in the heart of South East Asia. I am delighted that ten South East Asian nations will launch the ASEAN Economic Community at the end of 2015. This could, and should, be one of top four single markets in the world by 2030. The Trans-Pacific Partnership and Regional Comprehensive Economic Partnership are potentially important liberalising steps forward.

I hope the EU and Singapore will match this by implementing the FTA between them in the very near future. It should be the precursor to political agreement to the EU-Japan FTA this year, as well as further FTAs with Asia Pacific economies, including Australia, New Zealand and Vietnam.

This passion for trade is why Britain has not only advocated early completion of negotiations on the EU-China Investment Treaty, but why we are championing an ambitious EU-China FTA to build on this.

The British government wants to translate our knowledge of, and enthusiasm for, Asia into action to create a more competitive Europe which is more attuned to the emerging opportunities in this continent. So I am devoting a significant proportion of my time as Foreign Secretary to making the case in Europe for bold and ambitious reform to create a more outward-looking and more competitive European Union, better equipped to be a partner for such a dynamic region as yours.

We are embarking on a negotiation with our EU colleagues on the future shape of the Union, and the result of that negotiation will be put to the British people to decide on our future membership in a referendum in 2017. It is fair to say that since the global financial crisis struck, the scales have fallen from many European eyes on the need for a more competitive, outward looking bloc, more focused on delivering economic growth, maintaining our standard of living and creating jobs.

Increasingly, our partners across Europe share this reform agenda. I am confident that we will be able to deliver it. A Europe reformed in this way will be a Europe the British people want to be part of; and a Europe reformed in this way is also a Europe in Asia’s best interests. Britain relishes its role as the gateway to Europe for many Asian businesses – and intends to build on that role.

But if Asia’s rapid economic growth captures headlines around the world, the question which preoccupies many is whether it could yet be undermined by political instability and rivalries in the region.

The UK has an important stake in Asian security…

…As a nuclear power with one of the largest defence budgets in the world and membership of the P5 and United Nations and of NATO;

…and as a trading nation, conscious that £3 trillion worth of trade passes through the South China Sea each year;

Britain is also a party, alongside Singapore, Malaysia, Australia and New Zealand to the Five Powers Defence Arrangements – still the only formal multilateral defence arrangements in South East Asia.

That means we are ready and able to mobilise in support of Asia Pacific allies friends and partners… As we did in response to Typhoon Haiyan, facilitated by the Royal Naval presence here in Singapore and again when the world came together in search of missing Malaysian airliner MH370.

Many inside and outside Asia are watching nervously as political tensions and nationalism heighten in East Asia. 100 years ago, the Great War demonstrated that an economically connected Europe could still be pulled apart by strategic rivalry.

That is no longer conceivable in Europe. Our continent was twice ravaged by war in the first half of the 20th Century and spent much of the rest of it under the shadow of the Cold War. We have come to learn that multilateral institutions, from the United Nations down – though rarely glamorous – are invariably the best ways to build dialogue and so create confidence and trust between regional powers.

So 70 years after the end of WWII we share a sense of concern, indeed I would go as far as to say dismay, at the slow pace of historic reconciliation on this continent, despite the increased economic interconnectedness.

And a manifestation of that is the plethora of territorial claims which still plague the region. Let me be clear: Britain does not take a position on the underlying sovereignty disputes in the South and East China Seas. But we most certainly do take a view on how those claims should be pursued and ultimately resolved. Our position is clear: we support a rules-based, not a power-based, order in Asia. It is critically important for regional stability, and for the integrity of the rules-based international system, that disputes in the region are resolved, not through force or coercion, but through dialogue and in accordance with international law.

Through initiatives like the ASEAN Regional Forum and the East Asia Summit, ASEAN has demonstrated its significance can extend well beyond the economy, by acting as the centre point of the emerging Asian security architecture, seeking to manage these tensions. And I will urge you as a region to continue down this track.

It is also strongly in our collective interest that a rules-based approach encompasses respect for the values which, as I have already noted, we hold in common; and for the international system of commitments and treaties which protect them.

It is a convenient truth that human rights, prosperity and security are mutually reinforcing. For example, the free flow of ideas and innovation - the life-blood of economic growth coursing through the veins of the free Asian nations, is a driver of economic growth, and a key differentiator in favour of democracy.

That is why we have been vocal in championing the process of reform in Burma, in pressing for the restoration of elected civilian rule in Thailand, and in urging a meaningful advance to democracy in Hong Kong, within the terms of the Basic Law.

So, to answer my own question (which I have generally found is always the best way to get the right answer), I believe with goodwill and hard work from all concerned, the security challenges in this region can be successfully managed. And the staggering potential of Asia can be fully unleashed. Bringing new levels of prosperity to the people of this continent; new opportunities for global trade; and higher standards of living for all.

But Asia’s re-emergence as a real force in the world can achieve more besides, bringing fresh energy, new ideas and enhanced capacity to help us all meet the global challenges of our age.

Because this, surely, will be the measure of Asia’s success: not just the size of its population, not just its share in global GDP but Asia’s contribution to tackling the challenges facing our world.

So the response to climate change… Or the threat posed by Jihadi terrorism… Or the challenge posed by Russia’s actions in Ukraine to the rules based system… these are not issues which obscure the growing weight of Asia.

On the contrary these are some of the issues where Asia’s growing weight must be brought to bear – whether it be through the presence of Malaysia and New Zealand on the UNSC this year, or through the more engaged approach to international peace and security that Japan is taking, or through China’s engagement on non-traditional security threats like climate change and Ebola.

The threats we face together as challenges to our common prosperity, to the values that bind us, and to civilisation itself can only be overcome through the kinds of partnership the UK is already developing across this region…from Afghanistan to Ebola, from counter piracy in the Gulf of Aden to counter-radicalisation at home.

The UK and the countries of the Asia Pacific region are already working as partners for a safer and more prosperous world. But I firmly believe the best is yet to come; that the most important chapter of our shared history is the one we are about to write together.

Published 30 January 2015