Singapore firms continue to tap into China’s growth

Lithium-ion battery manufacturer Durapower started building a factory in Suzhou, China, with completion slated for 2025. — The Straits Times

SINGAPORE: Singapore companies are shrugging off short-term headwinds and keeping their eye on the long game as they continue to expand in China.

Sim Choon Siong, executive director (China) at Enterprise Singapore (EnterpriseSG), said Singapore firms remain interested in China.

He told The Straits Times: “Beyond being a key global manufacturing hub with a robust supply chain infrastructure and skilled workforce, there are now new opportunities in areas like the digital economy, green economy as well as healthcare, given the increasing focus on these areas.”

EnterpriseSG, which helps Singapore companies expand abroad, has assisted businesses to access market opportunities and grow their presence in China through 300 projects over the past two years.

About 250 firms tapped the agency’s Market Readiness Assistance Grant to enter the Chinese market in 2023 – up 50% on 2022 and more than in pre-Covid-19 2019.

EnterpriseSG, in league with the Singapore Chinese Chamber of Commerce and Industry’s Singapore Enterprise Centres in Shanghai and Chengdu, received about 50% more inquiries on China in 2023 compared with 2022, Sim said.

Singapore Business Federation (SBF) chief executive Kok Ping Soon said there are new opportunities to expand and entrench market presence in China.

“While investment allocation and trade flows are becoming more concentrated among countries that are geopolitically aligned, and no longer purely based on competitive or comparative advantages, China would still be an important market for many Singapore companies outside Asean,” Kok said.

Beijing has also been introducing new measures to attract foreign companies and investment, including expanding market access and implementing policies to remove barriers on foreign investment in the manufacturing sector.

Singapore businesses in the services sector would also benefit from upgraded aspects of the China-Singapore Free Trade Agreement signed in 2023.

Companies in industries such as construction, retail and wholesale, architectural and urban planning services, and technical testing and analysis services, would not be subjected to foreign equity caps, Kok said.

Singapore investors and service providers would also enjoy more liberal and transparent rules under the revised agreement, he added.

Its economy grew 5.3% in the first quarter, against a forecast of 4.6% in a Reuters poll of analysts.

Singapore’s OCBC Bank has built up an expansive network of branches across key Chinese cities over the years.

It opened its newest outlet in Wuhan in 2023, bringing the total number of branches and sub-branches to 16 across 14 cities.

OCBC China chief executive Ang Eng Siong said that China provides opportunities with its core markets in Asean.

“Asean as a region is the largest trading partner of China, and the Asean-Greater China trade and investment flows present huge opportunities for us.

“Capturing these flows is one of the key pillars of our corporate strategy,” he said.

OCBC serves Chinese companies that operate in Asean countries such as Malaysia and Indonesia, using Singapore as a base. It also supports customers doing business in China.

The bank said in 2023 that it aimed to generate S$3bil in incremental revenue by 2025 from a sharpened focus on Asean and Greater China.

Ang said China has ample human capital, with a labour force of over 800 million and a substantial pool of close to 12 million college graduates in 2024.

“China is also poised to ramp up investment in research and development, with the digital and green economies serving as pivotal growth drivers.

“Combined with its robust production capacity and expansive consumer market, China offers foreign investors ample growth and investment opportunities,” he added.

Lithium-ion battery manufacturer Durapower Holdings is another Singapore company expanding in China.

It started building a 32,500 sq metre factory in Suzhou in March, with completion slated for mid-2025.

Chief executive officer Kelvin Lim said the expansion would help the company meet Chinese and regional demand.

Medical concierge Premium Care SG will join the Singapore delegation at the China International Import Expo in 2024 for the first time to seek opportunities in the booming healthcare sector, given the country’s ageing population, said SBF’s Kok. — The Straits Times/ANN