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.'
He added that the department also gathered mainland market information and analysis for Singapore companies.
While Singapore is still highly attractive to the Southeast Asian market, Mr Tham noted that Hong Kong's position as the gateway to China seemed imperilled by the steady rise of Shanghai and Beijing.
A survey published this month by the World Bank ranked Hong Kong seventh out of 155 economies for the ease of doing business, behind second-ranked Singapore.
Since the beginning of this year, it has been possible to use China UnionPay national payment network cards in Singapore, as the country aims to boost business and exhibition tourism.
The Singapore government is set to invest US$18 million, mainly for office space, in hosting the annual IMF-World Bank Group meeting in September next year.
Clara Goh, a spokeswoman for the Monetary Authority of Singapore, said the event would draw 16,000 visitors and that an international visual arts festival would be run on its sidelines with the aim of wooing visitors to stay longer.