The Legacy of Lee Kuan Yew and Deng Xiaoping in Southeast Asia's New Economic Strategy

Lee Kuan Yew and Deng Xiaoping's historical political and economic partnership laid the foundation for China's transformation into a global financial powerhouse. Their shared vision and collaboration offer a compelling framework for modern Southeast Asian leaders, such as the Prime Ministers of Singapore and Malaysia, who are now emulating similar principles in their newly announced Johor Special Economic Zone (SEZ).

Lee Kuan Yew, Singapore's founding Prime Minister, was pivotal in advising Deng Xiaoping on modernization and governance during China's economic reform era in the late 20th century. Deng's decision to establish Special Economic Zones like Shenzhen drew inspiration from Singapore's efficient governance and ability to attract foreign investment. Together, these leaders forged a diplomatic and developmental bond that transformed China and reinforced Singapore's position as a global financial hub (Centre for International Law, 2020).

The Johor SEZ: A Modern Echo of Past Collaborations

The Johor SEZ represents a significant step in Southeast Asia's economic evolution. The initiative builds on the complementary strengths of Singapore and Malaysia: Singapore's capital and technological expertise and Malaysia's land and workforce resources. The project, spanning 3,500 square kilometres—over four times the size of Singapore—will offer a conducive environment for investments, modelled after the success of Shenzhen (Reuters, 2025).

This agreement reflects a strategic response to current global economic trends. Amid increasing talks of decoupling and re-shoring supply chains, Southeast Asia is emerging as a competitive alternative to China. The Johor SEZ is expected to attract global investments and generate 20,000 skilled jobs within five years (CNA, 2025). The SEZ's framework draws on reducing corporate taxes and fostering innovation, echoing the economic strategies that once transformed China (The Straits Times, 2025).

Challenges and Opportunities

While the Johor SEZ offers immense potential, historical tensions between Singapore and Malaysia pose challenges. If not resolved amicably, long-standing disputes over water supply, maritime boundaries, and airspace could impede collaboration. However, leaders of both nations have expressed a commitment to addressing these issues, emphasizing mutual economic benefits (Reuters, 2025).

Another significant factor is China's role. While the SEZ seeks to attract global investors, Chinese businesses are also being welcomed, reflecting the region's strategic balancing act. By drawing inspiration from Deng Xiaoping's success with Shenzhen and maintaining diplomatic ties with Beijing, the Johor SEZ could emerge as a transformative hub for Southeast Asia's economic landscape (The Diplomat, 2023).

Conclusion

The Johor SEZ is a testament to the enduring relevance of Lee Kuan Yew and Deng Xiaoping's legacy. By leveraging mutual strengths and fostering regional collaboration, Singapore and Malaysia are charting a path toward sustained economic growth and global competitiveness. The project highlights the power of visionary leadership and underscores Southeast Asia's potential to reshape the global economic order.

References

Centre for International Law. (2020). Building on Deng Xiaoping and Lee Kuan Yew's Legacy: Today marks the 40th anniversary of Deng's historic visit to Singapore. Retrieved from https://cil.nus.edu.sg

Reuters. (2025). Malaysia and Singapore announced a deal on the Johor economic zone. Retrieved from https://reuters.com

The Diplomat. (2023). Lee Kuan Yew: The father of modern China? Retrieved from https://thediplomat.com

The Straits Times. (2025). S'pore, Malaysia, signed an agreement on the Johor-S'pore Special Economic Zone; 20,000 jobs will be created. Retrieved from https://straitstimes.com

CNA. (2025). Malaysia-Singapore Leaders' Retreat: New Johor SEZ deal guns for global investments, 20,000 skilled jobs in 5 years. Retrieved from https://channelnewsasia.com