INVESTMENT IN THE CHINESE ECONOMY

INVESTMENT IN THE CHINESE ECONOMY

26.

Dr Amy Khor Lean Suan asked the Minister for Trade and Industry following the recent visits to China by several Ministers (a) what sectors of the Chinese economy

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Singaporeans and Singaporean businesses (i) are already involved and (ii) can participate in as China continues to grow; and (b) how must Singaporeans prepare themselves in order to participate more significantly in the growth of China as a major trading nation.

BG George Yong-Boon Yeo: Sectors of involvement, present and future

China is our fifth largest trading partner. It has been our top investment destination since 1997. At present, our investments are concentrated mainly in the coastal areas, primarily in Shanghai and the provinces of Jiangsu , Fujian and Guangdong .

Our economic engagement with China has increased significantly over the past two decades and now covers a wide range of sectors. Our firms are strong in real estate and infrastructure development, trading and manufacturing. For example, Ascendas and CPG group have leveraged on their successful experience in Suzhou and secured projects to do master planning and building infrastructure in other parts of China . Our manufacturing companies have established their presence in China , supporting MNCs there.

Singapore companies have also moved into other sectors like logistics, education and financial services. In port and logistics business, PSA operates ports in Dalian Container Terminal ( Liaoning ), Fuzhou Container Terminal and Guangzhou Container Terminal. SembCorp Logistics is active in Shenzhen and Shanghai . In the education sector, our companies have been successful in marketing their services and products in China . Times Publishing Group has established printing plants in Shenyang ( Liaoning ), Shanghai and Nansha ( Guangzhou ). The Singapore Institute of Management (SIM) has established a Sino-Singapore school with Chengdu University in Sichuan to offer English and Business programmes. Our banks are also making headway in China . DBS, UOB, and OCBC have established operations in Shanghai , Beijing , Shenzhen and Guangzhou .

As China continues to grow, new opportunities will open up. China has been liberating its services sector. With the rapid growth of the middle class, there are good prospects for our services companies. Singapore companies are strong in business services, infrastructure services, lifestyle products, transportation and logistics, international trading, engineering support and ICT.

China is keen on investments in the high-tech industries. Chinese President Hu Jintao proposed Sino-Singapore collaboration in high-tech industries when he visited Singapore in 2002 and several of our companies have already taken up this offer. For example, Hyflux has collaborated with Zhejiang University to establish an engineering company for water treatment and R&D for the production of purified water and has invested S$1.7 million in a biotechnology company in China .

Preparations for participation in growth of China

China is changing rapidly. However, it remains a complex operating environment. To succeed in China , it is important to have deep, up-to-date knowledge of markets, the regulatory and legal environment and local practices. We are building networks to facilitate information sharing and greater interaction among our businessmen. International Enterprise Singapore (IE S'pore) has helped to set up the Singapore Chamber of Commerce

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and Industry in Beijing (SingCham) and Network China in Singapore . Singaporeans should not enter the Chinese market without doing their homework.

Familiarity with the Chinese environment is crucial. In 2001, MTI launched the Asian Business Fellowship Programme. Under this programme, young Singaporeans are sent to various parts of China on training attachments and scholarships. Over 150 Singaporeans have been sent to companies in cities like Shanghai , Beijing , Tianjin , Chengdu , Chongqing , Xiamen , Guangzhou , Dongguan and Longkou.

We have set up six IE offices* in various parts of China to provide our Singapore businesses and citizens in China with a strong support base. We expect to send about 50 business missions to China this year.

Government agencies like IE S'pore can only play a facilitating role. It is our businessmen who will have to assess market opportunities, analyse their own strengths and weaknesses, and decide what risks to take. China is a rapidly growing market and we want more of the businessmen to venture there.

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• IE has six offices in Beijing , Shanghai , Guangzhou , Dalian , Qingdao , and Chengdu

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