Strategic governance and economic diplomacy in China: The political economy of government-linked companies from Singapore

In this paper, I define economic diplomacy as interstate economic relations manifested through firm-specific activities. While these economic activities are conducted through national firms, they "carry" with them certain distinctive elements of political and diplomatic overtures. These economic-diplomatic activities therefore cannot be conceptualised as pure market-based transactions. Instead, they should be viewed as institutionally mediated interactions between different nation-states that go beyond profit maximisation and economic efficiency. This paper aims to consider the experience of the Singapore Government in governing its economic diplomacy with China in relation to massive investments in China by government-linked companies (GLCs) from Singapore. By "strategic governance", I mean the strategies and mechanisms through which state agencies in Singapore are able to control and manage their economic activities abroad (i.e., in China). Here, I argue that while certain modes of strategic governance of GLCs may be appropriate and effective in Singapore, these same strategies and mechanisms may not work in a foreign business system that has different configurations of political, social and institutional relationships. Much local adaptation and reconfigurations of governance mechanisms are therefore needed in order for Singapore's economic diplomacy to work in foreign land. In particular, I consider three localisation strategies apparent in my research into the governance processes of Singapore's GLCs in China: (1) partnering with private companies from Singapore; (2) engaging local partners in China and (3) subsidiary autonomy through setting up broad operating parameters by parent GLCs.