A cacophony of Mandarin and English echo through the streets of Singapore's Chinatown as crowds of shoppers buy joss sticks and fruit as offerings to the spirits during the Seventh Month Ghost Festival.

    English has long united the ethnically diverse island-state but Singapore's leaders now foresee a time when Mandarin will be the country's dominant language and they are aggressively encouraging their people to become fluent in Chinese.

    "Both English and Mandarin are important because in different situations you use either language. But Mandarin has become more important," said Chinatown shopkeeper Eng Yee Lay.

    Hit hard by the global slowdown, strengthening ties with China has taken on a strategic imperative in Singapore which seeks to leverage the bilingual skills of its ethnic Chinese majority to get a larger slice of China's fast expanding economic pie.

    "With the growing importance of China on the world stage, Chinese Singaporeans who are competent in the language and familiar with the culture would have a distinct advantage when working and interacting with Chinese nationals," Lim Sau Hoong, chairwoman of the Promote Mandarin Council, told Reuters.

    The government-sponsored campaign to promote Mandarin began in 1979 to unite under one language Singapore's disparate Chinese communities that spoke a multitude of dialects passed on by their ancestors who came from China in the 19th and early 20th century.

    Unifying the Chinese majority in a country with sizeable Malay and Indian minorities was a priority and in the early days the Speak Mandarin Campaign discouraged ethnic Chinese from speaking the dialects that prevailed such as Hokkien.

    Now, with a majority of Singaporeans speaking Mandarin in their homes, according to government figures, the focus is on improving fluency in spoken and written Mandarin.

    "In two generations, Mandarin will become our mother tongue," said Singapore's first prime minister Lee Kuan Yew at the launch of the 2009 Speak Mandarin Campaign earlier this year.

    His vision is for Singapore to become China's Southeast Asia hub as it expands its commercial interests in the region, while Singapore firms would entrench their positions in China, giving them a first-mover advantage over foreign firms.

    Already, despite its small demographic size, Singapore was China's third largest foreign investor with total foreign direct investment of S$6.5 billion in 2008, a 40 percent rise from 2007, according to the Chinese government.

    Trade between the countries has risen 17-fold since 1991 to S$91.4 billion ($63.34 billion) in 2008.