[SINGAPORE] The city-state has benefited from its ability to connect with both the US and China, but these relations risk having a “worst of both worlds” outcome if it gets wrongly caught up in the sharpening rivalry between both superpowers, said Foreign Minister Vivian Balakrishnan on Wednesday (Sep 3).
Instead, local businesses should respond to these tensions by doubling down on internationalisation and exploring opportunities in the region, as well as in emerging markets such as India, South America, Africa and the Middle East.
“As we navigate these changes globally – regionally and domestically – we need to reimagine how we do business, how we connect with one another, and how we take advantage of the new technologies,” he said.
“We need to enhance our regional networks, and look for new opportunities amongst this new reshuffling of production and supply chains.”
On its part, the government is pushing for greater Asean integration, with the aim of creating a single market and investment zone in South-east Asia.
“Asean is a big opportunity, which we would be foolish to miss,” he said, noting that the region has a growing middle class, which signals that the market will continue to grow.
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He cited the Johor-Singapore Special Economic Zone (JS-SEZ) as an example of how Asean countries can scale up collaboration. Small and medium-sized enterprises (SMEs) can benefit from Johor’s production resources while continuing to base their headquarters and key functions in Singapore.
Both sides are also exploring how the JS-SEZ can enhance collaboration with Indonesia – particularly Batam and Bintan – to unlock further opportunities.
Beyond the region, Dr Balakrishnan highlighted “significant opportunities” in other parts of the world.
He pointed to India, where Prime Minister Lawrence Wong is currently on an official visit, as offering great economic potential. Dr Balakrishnan specifically flagged India’s maturing semiconductor sector as an area where SMEs can participate.
The government is also actively encouraging enterprises to consider opportunities in South America and Africa. Singapore has signed several free trade agreements in Latin America through the Mercosur trade bloc – which includes Argentina, Brazil and Paraguay – and the Pacific Alliance, comprising Chile, Colombia, Mexico and Peru.
“The point I’m making is: there’s still a lot of business, and you are welcome. You are trusted. They want to meet you,” he said.
Asean integration
Dr Balakrishnan was speaking at the annual SME Infocomm Commerce Conference (SMEICC), a bilingual conference organised by the Singapore Chinese Chamber of Commerce and Industry (SCCCI) for SMEs.
Asean integration, and how member states and business chambers can encourage further collaboration, emerged as a major theme among speakers.
During his opening address, SCCCI president Kho Choon Keng highlighted renewed interest in the region, which is set to become the world’s fourth-largest economy by 2030.
“There is limitless potential to strengthen and advance the integration of Asean, offering businesses a substantial single market to make access and operations seamless across the region,” said Kho.
During a fireside chat, representatives from Chinese commerce chambers across Malaysia, the Philippines, Singapore, Thailand, Brunei and Indonesia raised greater regional integration as a way of hedging against current global economic uncertainties.
The participants also agreed that Asean should remain united and neutral amid US-China geopolitical tensions.
Prasong Owlarn, vice-president of the Thai-Chinese Chamber of Commerce, noted that it is now more “appropriate” than ever to “stick together, work together” and treat the whole of South-east Asia as one market. “We are forced to do so.”
Addressing concerns that greater integration could bring more competition alongside cooperation, SCCCI vice-president Lee Sze Leong said nations should view integration as complementary.
“We should tap on each other’s strength to create this zone or create this partnership, rather than… compete with each other on certain products,” said Lee.
Using the JS-SEZ as an example, he noted that the agreement works because Singapore is not competing to offer low-cost labour, as the city-state’s strengths no longer lie in labour-intensive industries.
“Each country will probably have to compete at a level (of the) advancement in (its) economy,” said Lee.
