Visiting Malaysian Deputy Prime Minister Muhyiddin Yassin revealed this to reporters after his talks with his Singapore counterpart, Mr Teo Chee Hean, on Tuesday.
Mr Muhyiddin, who is in Singapore for a two-day visit, also met Prime Minister Lee at the Istana.
Mr Muhyiddin expressed appreciation for Mr Lee's efforts in resolving the longstanding Points of Agreement (POA) issue on Malayan Railway Land as well as the smooth handover of the waterworks to Johor authorities free of charge and in good working condition.
During their talks, both Mr Teo and Mr Muhyiddin expressed satisfaction at the state of bilateral ties between Malaysia and Singapore.
They also discussed the many programmes both countries are working together on, including measures to improve the flow of people and goods between the two countries, covering immigration matters and the rapid transit link, as well as the iconic projects being undertaken by Malaysia's Khazanah Nasional and Singapore's Temasek Holdings in Singapore and Iskandar Malaysia.
Mr Teo said these projects "send a signal of commitment of the two countries to strengthen and develop relations between us. Apart from that, we also have a whole host of things we are doing together - especially in Tan Sri (Muhyiddin)'s very important portfolio of education."
On his part, Mr Muhyiddin revealed that Singapore is now Malaysia's largest trading partner, overtaking China.
Hence, Malaysia hopes to encourage more small and medium-sized enterprises to locate their businesses in the developing Iskandar Malaysia region.
Malaysia also looks forward to enhancing further bilateral ties especially in areas like tourism development and Mr Muhyiddin believes the cruise industry can contribute to this development.
He said: "I have suggested that the working group on tourism look further beyond them and get the private parties to come in and get a clear direction how this area can move forward."
Mr Muhyiddin also spoke of projects by Khazanah Nasional and Temasek Holdings in Singapore and Johor, adding that there is also a need to look into other projects such as in Desaru.
"The cooperation with Singapore will continue. We do hope that the Prime Ministers will meet at a retreat in Kuala Lumpur in December. We have proposed some dates and we hope Mr Lee Hsien Loong will agree. That will provide an opportunity for the two Prime Ministers to discuss what we can do in terms of our bilateral relations," said Mr Muhyiddin.
For Malaysia, one sector which it wants to see improvements in is vocational and technical education.
And, Mr Muhyiddin got a deeper insight into the programmes which Singapore has in place at its ITE colleges when he visited ITE College West with Education Minister Heng Swee Keat.
He said Malaysia's need for skilled manpower is huge and it needs to transform the country's vocational education system.
He believes Singapore has good experience in this field and some models which Malaysia could emulate.
Earlier in the day, Mr Muhyiddin was given a briefing on Singapore's tourism development plans and he noted that 2010 was a very good year for the tourism industry in Singapore.
- CNA/ck/fa/ir
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