Impact of China's "One Belt, One Road" Initiative on Singapore SMEs
Ministry of Trade and IndustrySpeakers
Summary
This question concerns the impact of China's "One Belt, One Road" initiative on Singapore’s small and medium-sized enterprises (SMEs) as raised by Mr Thomas Chua Kee Seng. Minister for Trade and Industry (Industry) S Iswaran stated that SMEs benefit from collaborating with Chinese firms in transport and logistics and accessing development projects like the Chongqing Connectivity Initiative. He highlighted that SPRING Singapore and IE Singapore provide capability development and internationalisation schemes, noting that over 80% of the 34,000 companies IE Singapore supported in 2015 were SMEs. To facilitate growth, IE Singapore signed MOUs with major Chinese banks to provide financing for infrastructure projects along the Belt and Road. Additionally, the government collaborates with Trade Associations and Chambers to organize in-market workshops that help SMEs build local networks and understand market conditions.
Transcript
26 Mr Thomas Chua Kee Seng asked the Minister for Trade and Industry (Industry) what is the impact of China's "One Belt, One Road" initiative on our small and medium size enterprises.
Mr S Iswaran: Singapore welcomes China’s "Belt and Road" Initiative (B&R), as it is a mutually beneficial initiative that will encourage further economic integration, infrastructural cooperation and people-to-people linkages between countries in the region.
A key component of this initiative is the internationalisation of Chinese companies. As a key financial, transportation and trading hub in the region, Singapore is well-positioned to be a base for Chinese enterprises venturing into Southeast Asia. In 2015, Chinese investments into Singapore amounted to US$4.96 billion, an increase of 76.5% from the previous year. To date, more than 6,500 Chinese companies have established their presence in Singapore, almost twice the number of companies five years ago. Singapore companies can benefit from collaboration opportunities with this growing pool of Chinese companies venturing into the region in sectors, such as transport and logistics, mixed-use park developments, construction materials and financing.
The B&R initiative will also open up possibilities for Singapore companies in China. Various provinces in China have rolled out infrastructure and development plans to support the initiative, resulting in greater opportunities for Singapore companies in sectors, such as information and communications technology (ICT), urban solutions, transport and logistics, as well as infrastructure and related services. A key example of this is the Chongqing Connectivity Initiative, the third Government-to-Government project between Singapore and China. Under this initiative, Singapore companies can access opportunities and bring on board our expertise in the areas of financial services, aviation, transport and logistics, and ICT.
The Government is helping our SMEs to prepare themselves to seize these opportunities. For example, companies can seek support from SPRING Singapore for capability development efforts in developing innovative technologies, products and services in areas, such as environmental management, logistics and engineering services.
Companies can also tap on IE Singapore's schemes and initiatives to access opportunities in China and countries along the B&R. The Market Readiness Assistance (MRA) scheme provides broad-based assistance for companies new to internationalisation, while the Global Company Partnership scheme provides customised help for companies with more established presence overseas. In 2015, IE Singapore supported 34,000 companies in their internationalisation efforts and over 80% of these companies were SMEs.
IE Singapore has recently signed MOUs with the Bank of China, China Construction Bank and Industrial and Commercial Bank of China to provide more financing options for Singapore companies undertaking infrastructure projects along the B&R. IE Singapore also works with Trade Associations and Chambers to organise overseas in-market workshops in key target markets, including China. These workshops help SMEs gain first-hand experience of market conditions and facilitate the building of networks with potential local business partners.