Economic relationship between Asia and Europe: Case studies of Singapore’s exports to China and the EU

Authors

  • Assoc. Prof. Dr. Fumitaka Furuoka Asia-Europe Institute, University of Malaya, Malaysia
  • Aida Idris Asia-Europe Institute, University of Malaya, Malaysia
  • Beatrice Lim Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Malaysia
  • Rostika Petrus Boroh Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Malaysia

Keywords:

export, economic development, free trade agreement (FTA), Singapore

Abstract

Inter-regional trade negotiations between the EU and ASEAN have not met with much success
since they were first tabled in the Asia-Europe Meeting (ASEM) in 1996. This has led to separate discussions between the EU and individual ASEAN member countries to establish bilateral free trade agreements (FTAs). Singapore was the first ASEAN country to formalise a bilateral FTA with the EU, initialled in 2014 as the EU-Singapore Free Trade Agreement (EUSFTA). At the same time, Singapore has also developed a close trade relationship with China by establishing a China-Singapore Free Trade Agreement (CSFTA) in 2008. Despite the obvious significance of the EUSFTA and CSFTA, there has been little systematic research on the export-growth nexus in Singapore. Thus, this paper examines whether Singapore’s exports to China and the EU are beneficial for its economic development. Empirical findings indicate that there is unidirectional causality between exports to China and economic development, consistent with the export-led economic  development hypothesis. Nevertheless the findings also show that, in line with the neutrality hypothesis, there is an independent relationship between exports to the EU and economic development. These findings have considerable implications on Singapore’s international trade policy and practices.

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Published

2021-09-01

How to Cite

Furuoka, F., Idris, A., Lim, B., & Boroh, R. P. (2021). Economic relationship between Asia and Europe: Case studies of Singapore’s exports to China and the EU. AEI INSIGHTS, 4(1), 7–18. Retrieved from https://ejournal.um.edu.my/index.php/AEIINSIGHTS/article/view/31655