Singapore revises strategy on China

Focus shifts to services as mainland masters bricks-and-mortar competition

The Singapore government is encouraging local enterprise to deliver services and know-how to China, instead of investing in manufacturing - the island state's previous strategy for expanding into the mainland Chinese market.

Tham Poh Cheong, a director of China strategic relations at International Enterprise Singapore (IE Singapore), said it was because Chinese firms were more competitive factory builders than Singapore firms. Mr Tham pointed to Singapore port operators, now being hired as consultants by their mainland counterparts, as an example.

IE Singapore's latest statistics showed that Singapore-China trade amounted to S$34.9 billion ($160.3 billion) in the first seven months of the year, up 24 per cent from the same period last year. Contractual foreign direct investment between Singapore and China was up 5 per cent, at US$2.25 billion, from January to July, Chinese embassy figures show.

Mr Tham said IE Singapore had tailor-made its services for companies looking for business opportunities on the mainland.

'In the past, if a Singapore company wanted to form a joint venture on the mainland, we would provide five choices for them,' he said. 'But now, we will help them sort out the best one.'