Steps to Mitigate Risks for Singapore Government-linked Projects and Investments in China
Ministry of Trade and IndustrySpeakers
Summary
This question concerns the steps taken to mitigate risks for Singapore Government-linked projects in China and manage economic exposure amidst structural, demographic, and geopolitical challenges. MP Gerald Giam Yean Song inquired about diversification strategies, to which Minister for Trade and Industry Gan Kim Yong highlighted Singapore’s use of free trade agreements like RCEP and CPTPP to manage country-specific risks. The Minister noted that China accounted for 14.2% of Singapore's merchandise trade in 2021, with government-to-government projects like the Chongqing Connectivity Initiative showing a 30% year-on-year growth in cargo flows for the first half of 2022. He further detailed that bilateral cooperation in the Suzhou Industrial Park is expanding into biomedical and advanced manufacturing sectors, demonstrating the resilience of these strategic commitments against economic cycles. These initiatives are underpinned by a strategic commitment from both nations, ensuring they remain robust while Singapore proactively broadens its global economic relations to maintain long-term stability.
Transcript
14 Mr Gerald Giam Yean Song asked the Minister for Trade and Industry in light of the structural economic concerns, demographic pressures, continued zero-COVID-19 policies and intensifying major power competition that China faces, what are the steps being taken to (i) mitigate risks for Singapore Government-linked projects and investments in China and (ii) diversify and manage Singapore's economic exposure to China.
Mr Gan Kim Yong: Singapore proactively diversifies our economic relations and industry development. We have strong economic ties with many countries and are party to many free trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This strategy allows us to mitigate cyclical and country-specific risks.
Within this context, Singapore has good economic relations with China, which is our largest trading partner, accounting for 14.2% of our merchandise trade in 2021 and our top investment destination, with 14.4% of Singapore's stock of direct investment abroad in 2020. China's strong growth over the years has benefited Singapore's and the world's economy.
Our government-to-government projects with China are doing well. For instance, the Chongqing Connectivity Initiative – New International Land-Sea Trade Corridor has enhanced connectivity between Singapore and China, with cargo flows growing 30% year-on-year in the first half of 2022. Bilateral cooperation in the China-Singapore Suzhou Industrial Park continues to expand, with recent investments in the biomedical sector, financial services and advanced manufacturing. These projects are underpinned by a strategic commitment on both sides and are less vulnerable to the vagaries of economic cycles.