On 6th November 2021, the Singapore-China Trade and Investment Forum (SCTIF), organised by the Singapore Business Federation (SBF) and supported by Enterprise Singapore, was held physically in Shanghai and also welcomed over 350 online attendees.
The fourth annual SCTIF is a high-level bilateral business forum to foster dialogue and cooperation between the business communities in Singapore and China and was held in conjunction with the ongoing China International Import Expo in Shanghai. The event was graced by Singapore’s Trade and Industry Minister Gan Kim Yong, Singapore Ambassador to China Lui Tuck Yew and SBF chairman Lim Ming Yan alongside esteemed business leaders.
Emerging opportunities amidst the crisis
Despite the COVID-19 pandemic, trade and investments between Singapore and China remain strong. Bilateral trade for the first three quarters of 2021 grew by 20.6%, compared with the same period in the previous year. China continues to be Singapore’s largest trading partner since 2013 and was Singapore’s largest investment destination in 2019. The pandemic has highlighted the vulnerabilities of global trade, forcing many companies to capture new opportunities, restructure their business models and find innovative ways to engage stakeholders and consumers.
In his Welcome Address, Mr Lim shared that China remains a top priority for Singapore businesses despite the pandemic. He also noted that China announced its “dual circulation” strategy, last year, to boost its domestic consumption and enhance foreign investments, and Singapore can continue to play an important role as a regional hub in China’s new economic strategy. “For Chinese investors, Singapore can be a springboard into ASEAN and the rest of Asia, and for investors from the rest of the world, Singapore can be a key hub for their investments into China,” he said.
In the Opening Address, Mr Lui urged companies to pay more attention to trade in services between China and Singapore as “China is our largest trading partner in merchandise trade but is not yet near to being our top trade partner in services.”. He expects that in years to come “China… will find a new balance between the contribution of manufacturing and services to its economy, and this will create new opportunities for Singapore businesses.”
During his Keynote Speech, Minister Gan shared three key economic trends that present opportunities for Singapore companies:
- Opportunities in the growth of China’s domestic market
China’s overall economy has bounced back quickly since the start of the pandemic and continues to register resilient GDP growth. As its economy recovers, China has committed to boosting domestic consumption and increasing spending from its vast consumer market. This will continue to be a key driver of economic growth in the next few years, in line with China’s “Dual Circulation” strategy.
Singapore companies and products are reputed for their high quality, safety, and reliability, and are well-positioned to serve the Chinese market. The prolonged pandemic has also led to shifts in consumer behavior with young Chinese consumers now choosing to spend on higher quality products. We can expect this trend to persist as the purchasing power of the Chinese consumers continue to grow.
2. Rapid digitalisation of the global economy
China boasts a digital economy worth USD 6 trillion or 38.6% of its GDP in 2020 and technologies such as mobile platforms, big data and cloud computing have completely transformed its economy.
The pandemic has further accelerated digitalisation in China with Chinese consumers now spending more time online. As a result, e-commerce has seen remarkable growth, accelerated by the rapid rise of video livestreaming during the pandemic. This opens more opportunities for companies to access the Chinese market through digital channels. To harness these, Singapore is actively investing in digital infrastructure to enhance its capabilities in the digital economy.
3. Emerging green economy
Minister Gan noted that, “Climate change is a global priority. Countries and businesses alike need to… integrate sustainability into our plans. This is core to our long-term competitiveness.” He further highlighted that Singapore and China are like-minded in their intent to address the climate crisis.
The Chinese government issued its 1+N policy framework last month to promote green development and provide guidance to meet the country’s decarbonisation goals. Meanwhile, Singapore launched its Green Plan 2030 this year which aims to halve its emissions from the 2030 peak by 2050 and to achieve net zero emissions as soon as viable. Singapore is keen to develop new green growth sectors, such as carbon services and green finance, and to work with global and regional partners to conduct R&D in green technologies.
The green economy presents a wealth of opportunities and it is paramount for businesses to reinvent themselves and stay relevant. Those that embrace sustainability quickly will reap first-mover advantages.
Singapore-China: Seizing New Opportunities Together
During the Ministerial Dialogue, Minister Gan shared his insights on Singapore’s economic recovery as well as opportunities for businesses.
Singapore is expecting a 6 to 7% growth in the economy this year. Although domestic sectors such as F&B and retail continue to face challenges, manufacturing and exports are growing strongly due to increased global demand.
Minister Gan also emphasized that Green economy and sustainability are areas where Singapore can ride on its strength as a financial and trading hub to promote green financing and the development of carbon trading platform.
On supply chain resilience, Minister Gan noted that some countries wanted to adopt onshoring strategies which may prove unfeasible. In turn, he emphasised that diversification is key and having alternative supplies would enable a quick shift in the face of disruptions. Furthermore, such shifts in production will undoubtedly have an impact on the current global manufacturing system which must be addressed.
Strengthening bilateral economic cooperation
The SCTIF also saw an MOU Signing Ceremony between several Singapore and China companies, underscoring the strength of bilateral economic cooperation. The live streaming concluded with remarks from business leaders as well as business pitches by Singapore companies while the physical forum continued with a Networking Cocktail Reception.
In this time of both crisis and opportunity, the business community plays an important role in spearheading Singapore and China’s bilateral economic cooperation to achieve greater and mutual economic growth.