S'pore seeks to be launch pad for China businesses

With more Chinese firms now ready to venture abroad, Singapore is keen to become the de facto launch pad for those that want to expand into Asia and beyond.
With more Chinese firms now ready to venture abroad, Singapore is keen to become the de facto launch pad for those that want to expand into Asia and beyond. ST PHOTO: YEN MENG JIIN

Republic to leverage reputation in S-E Asia, knowledge of region to help firms go abroad

When a Chinese IT firm dealing in telco encryption software wanted to expand abroad last year, a big question mark was how to eliminate the negative baggage sometimes associated with Chinese products.

The solution was to enter into a joint venture with a Singapore partner, restructure itself so its operations were controlled from Singapore, and, in the process, adopt a more international face potential customers would be more comfortable with, said Mr Ching Mia Kuang, managing director of corporate advisory firm Le Yu.

With more Chinese firms now ready to venture abroad, Singapore is keen to become the de facto launch pad for those that want to expand into Asia and beyond.

"Structured in Singapore, they could market and promote better, and their customers felt greater confidence because they were now trading and dealing with a company that has internationalised and value-added with a Singapore brand," Mr Ching said of his client.

But along with the image makeover, the client found that being based in Singapore came with a host of other benefits, such as easier access both to capital and to the city-state's extensive international business networks, he added at a seminar yesterday to reach out to Chinese companies.

Last year saw China overtake the United States for outbound mergers and acquisition volume for the first time, with US$226.5 billion (S$316 billion) of deals, according to research firm Dealogic - a 500 per cent growth from 2009.

Singapore wants to leverage its reputation in South-east Asia and its knowledge of the region, said the Republic's firms present at yesterday's seminar, which was hosted by the Singapore Business Federation and the Singapore Chamber of Commerce and Industry in China.

And the selling points are many: one of the lowest corporate tax rates in the world, for instance, and a constellation of 130 free trade agreements, and investment guarantee agreements that the Republic has signed.

Chinese firms have also found that a Singapore partner can be a boon when entering markets in Asean, given their unfamiliarity with the culture, language and even the social media platforms that work best, said Mr Kong Fern Chiang, managing director of integrated marketing communications firm Four Media.

"Advertising in China is very developed, but the style may not work for more conservative countries like Malaysia, and that's where we can advise customers on what works for each market," he said.

This round of seminars, which will see the Singapore contingent hold seven outreach sessions in as many days across four cities (Beijing, Nanjing, Suzhou and Shanghai), will spotlight the growing number of industrial park projects that Chinese firms can tap.

A version of this article appeared in the print edition of The Straits Times on March 28, 2017, with the headline 'S'pore seeks to be launch pad for China businesses'. Print Edition | Subscribe