Chinese firms catch up with US companies in value added to Singapore’s economy, fixed-asset investments hit 10-year high

New data shows firms from China make up 39.7 per cent of the US$23.4 billion expected to be added to the city state’s economy, with US companies accounting for 40.9 per cent

Meanwhile, Singapore recorded foreign investments of US$12.9 billion in facilities, equipment and machinery last year, despite being mired in its deepest recession since 1965

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The Economic Development Board attributes the growth to investments made by Chinese firms that were “largely digital in nature”. Photo: AFP

Published: 7:30pm, 20 Jan 2021Updated: 12:01am, 21 Jan 2021

Chinese companies are catching up with firms from the United States in terms of how much value they add to Singapore’s economy, according to the city state’s economic planning agency, which also revealed that business-investment commitments in the trade-reliant country last year had risen to their highest in a decade.

According to data released by the Economic Development Board (EDB) on Tuesday, investments secured from foreign companies last year are expected to add S$31.2 billion (US$23.4 billion) per annum to the country’s economy when the relevant projects are completed. Chinese firms accounted for 39.7 per cent of that total, or S$12.39 billion, compared with 40.9 per cent or S$12.76 billion for their American counterparts.

The figures for companies from China were up from S$2.53 billion in 2019, when they made up 8.6 per cent of the total of S$29.4 billion. Investments from US firms fell from S$20.1 billion that year, or 68.4 per cent of the total.

EDB managing director Chng Kai Fong attributed the growth to investments made by Chinese firms that were “largely digital in nature, largely tech”. Among the firms the agency highlighted were Tencent – China’s largest social media and gaming company – and ByteDance, owner of the popular but beleaguered app Tiktok, which has been the subject of sanctions from Pakistan, India and the US.

Tencent has chosen Singapore as its regional headquarters. Photo: Reuters

Tencent has chosen Singapore as its regional headquarters amid speculation it is looking to shift its international game-publishing business from mainland China to the city state. ByteDance has taken up 60,000 square feet of office space in Singapore, where reports indicate it is planning to spend several billion dollars and add hundreds of jobs.

Chng said while digital and tech companies had grown rapidly in recent years, this trend had been further accelerated by increased usage of technology during the Covid-19 pandemic, allowing the companies themselves to project an “outsized contribution” to Singapore.

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