The cooperation between Singapore and China makes both economies more resilient, especially in the context of the weakness of global economy, Singapore Prime Minister Lee Hsien Loong said.

Speaking in a recent interview with Chinese media ahead of his official visit to China, Lee said he expected the pattern of the bilateral economic cooperation, which has been supported largely by the complementary nature of the two economies, to change in the future as both upgrade their economies.

PATTERN OF ECONOMIC COOPERATION

Lee said China is upgrading itself and doing more sophisticated activities, not just labor-intensive manufacturing, but high- skilled technology-intensive manufacturing and some of the services where Singapore and other more developed economies have had a strength.

"It's a way the international division of labor works. When one country moves up, the other have to develop new skills to complement the new players so that we can continue to make a living for ourselves," he said.

The cooperation between China and Singapore have been expanding fast over the past decades, especially since the establishment of official diplomatic ties in 1990. Bilateral trade grew by 11.2 percent year on year to 63.5 billion U.S. dollars in 2011, according to Chinese official statisitcs. The bilateral trade in the first half of this year totalled 32 billion U.S. dollars, growing by 1.3 percent despite the challenging environment.

Singapore is the fourth largest foreign investor for the Chinese mainland, with 6.33 billion U.S. dollars of new investment made in 2011.

Many Singapore companies, including the home-grown banks, developers, logistics firms and consumer brands, are expanding their operations in the Chinese mainland market. Some of them are involved in the flagship bilateral cooperation projects -- from the Suzhou Industrial Park in the 1990s to the recent major projects such as the Tianjin Eco-City and the parks in Guangzhou, Nanjing, Jilin, Chengdu, Xi'an and Henan.

Many Chinese companies are using Singapore as a platform to tap the Southeast Asian market, with Chinese investment in Singapore growing by 52 percent year on year to 1.07 billion U.S. dollars in 2011.

Lee said Singapore is moving forward, too, and does not want to remain where it is.

"I see ourselves developing more capabilities and we hope these will also be capabilities which will have a market in China and which will complement what China's doing. There will always be rooms for different economies to do different things. It's a very big world," he said.

ASIAN ECONOMIES OUGHT TO WORK TOGETHER

Lee said that countries should be prepared for a very weak recovery in the United States, and that the problems in Europe are deep-seated.

"They (the European problems) are structural. They are political. They will not be easily overcome. It's not a cyclical downturn which will recover given so many weeks, so many months or one or two years," he said.

Asia is the brighter spot in the global economy and Asian economies ought to work together to keep the vitality and vibrancy so as to make up for the absence of demand in the developed west, Lee said.

The Singapore prime minister said he is impressed with China's progress over the last decades.

"We have also been very happy because it has benefited the whole region, that China has been progressive, stable, prospering and cooperating with countries in the region on an equal win-win basis," he said.

He said that Singapore has good economic and political relations with China and that it tries to "exercise a moderating influence" in preventing frictions in the South China Sea from developing into conflagrations.

The prime minister said that Singapore is not a claimant state on the South China Sea and does not take sides in any of the disputes, but that it does have interests as an economy heavily dependent on international trade and a member of the Association of Southeast Asian Nations (ASEAN).

"In the case of the South China Sea, ASEAN has concluded a Declaration of Conduct (of Parties in South China Sea) with China, and we hope we will be able to build on that and develop a Code of Conduct with China so that we can manage the disputes even if we can't resolve them," he said.

SIGN OF FRIENDSHIP

Lee will embark on a six-day official visit to China on Sunday at the invitation of Chinese Premier Wen Jiabao. He said he wanted to "update himself" after visiting China in 2010 during the Expo in Shanghai.

China is facing domestic challenges that are "not small," but Singapore sees the confidence and the drive and the determination to keep China growing and moving forward and taking its rightful place in the world as a member of the international community, he said.

"I wish China every success, because I believe that it will be good for China, and good for the world," he said.

The Singapore prime minister will meet with Chinese leaders and visit some of the cooperation projects, including the Tianjin Eco- City, a flagship cooperation project built on a land of 30 square kilometers and envisioned to be a socially harmonious, environmentally friendly and resource-conserving city in the eastern coastal city of Tianjin. It is designed to be practical, replicable and scalable. He has also been invited to give a speech at the Party School of the Central Committee of the Communist Party of China.

The cooperation between China and Singapore has expanded beyond the economy to culture, education and many other areas. Many senior Chinese officials have been trained in Singapore in recent years, hoping to learn from the city state's experience in economic development and society management.

Two giant pandas loaned from China will arrive in Singapore on Sept. 6 and stay here for 10 years.

"It is a sign of the friendship between our two countries, and the pandas will be very popular. There is a lot of interest in Singapore in Kai Kai and Jia Jia," Lee said.