When mainland China fired missiles into waters near Taiwan in 1996, Lee Kuan Yew made a public plea for calm. "China's leaders have referred to me as an old friend. I am an older friend of Taiwan," the late Singapore leader recalled in his memoirs. "If either one is damaged, Singapore will suffer a loss. If both are damaged, Singapore's loss will be doubled. Singapore benefits when both prosper, when both cooperate and help each other prosper." READ MORE: 'Mister' sets the stage for historic talk between mainland China's Xi Jinping and Taiwan's Ma Ying-jeou in Singapore Lee was gently rebuffed by the mainland's vice-premier Qian Qichen , who said it was an internal matter that did not involve outsiders. Publicly, that was Beijing's consistent stance: Lee and Singapore are not part of the China family. But privately, the island nation is regarded as a close family friend. So while Saturday's summit between President Xi Jinping and Taiwan's President Ma Ying-jeou caught most observers by surprise, the location was predictable. "There are not many choices of venue for mainland China and Taiwan to conduct this kind of meeting at the highest political leadership level," said analyst Li Mingjiang of the S. Rajaratnam School of International Studies. The key criterion is neutrality. Both sides would find it difficult to accept meeting either on the mainland or in Taiwan. Hong Kong was a possible choice, said China scholar Chen Gang from Singapore's East Asian Institute. But as the special region is now part of the People's Republic, it would not be seen as a neutral setting. "People in Taiwan increasingly believe that Hong Kong is politically suppressed by mainland China. For Ma to go to Hong Kong to meet Xi would generate negative political repercussions for the Kuomintang in Taiwanese politics," Li said. Singapore also holds symbolic value for Beijing. In 1993, when the mainland and Taiwan held a landmark semi-official meeting there, they agreed to the "One China" principle with individual interpretations. Xi and Ma's meeting is expected to reinforce the principle. Singapore's predominantly Chinese population is another factor, observers say. "They don't want to discuss family matters in a completely non-Chinese environment," Chen said. Experts have long credited Singapore for its deft balancing act across the Taiwan Strait. "That Singapore should provide the venue is not an accident. Singapore has a 'One China' policy and has close relations with both the mainland and Taiwan," Singapore's former foreign affairs minister George Yeo told the South China Morning Post . READ MORE: From civil war to civil greetings: Why President Xi Jinping’s meeting with Taiwan’s President Ma Ying-jeou is so significant "We are linked to both by history, culture and blood. It is an honour for us to play host." Although Singapore recognises Beijing as the seat of the Chinese government, it has not cut ties with Taipei, says observer Huang Jing from the Lee Kuan Yew School of Public Policy. Its military, for instance, started training in Taiwan in 1975 and has continued sending its troops to the island despite initial misgivings from the mainland. Lee was also trusted as a channel across the strait during the Cold War, delivering messages between late mainland leader Deng Xiaoping and his Taiwan counterpart Chiang Ching-kuo in the 1980s. As late as 2006, Beijing was still looking to Singapore to contribute to cross-strait relations. Then Chinese premier Wen Jiabao told Lee in Beijing that Singapore had a "unique role" in cross-strait stability because it intimately understood the three key players: China, Taiwan and the United States. "We intend, in our own interests, to maintain that stability," Lee said.