Crucial for EU, German firms to entrench presence in region: Chan

Singaporean-German Chamber of Industry and Commerce president Claus Trenner with Trade and Industry Minister Chan Chun Sing at a dialogue session at the Conrad Centennial Singapore yesterday.
Singaporean-German Chamber of Industry and Commerce president Claus Trenner with Trade and Industry Minister Chan Chun Sing at a dialogue session at the Conrad Centennial Singapore yesterday.ST PHOTO: TIMOTHY DAVID

The significant benefits German firms and their European Union colleagues have reaped from using Singapore as their regional base underscore the need for them to build on these foundations, said Trade and Industry Minister Chan Chun Sing yesterday.

Mr Chan, speaking at an event to mark the 15th anniversary of the Singaporean-German Chamber of Industry and Commerce at the Conrad Centennial Singapore, said: "It is crucial that EU and Germany companies work to quickly capture and entrench their place in this regional market and not lose their pre-eminence in this market.

"Asean remains a bright spot of economic growth... The centre of gravity in the economic landscape is increasingly moving towards this part of the world."

Mr Chan noted that Singapore is a favourable Asean starting point for German and European firms, given the similar business environments.

"Almost 2,000 German companies are based in Singapore, in areas such as engineering, logistics and fintech," he said.

"Many of these companies have used Singapore as a base to run extensive operations across multiple Asean markets. I hope to see German companies continue to lead the way and demonstrate by example how Singapore can be a launch pad for EU businesses into Asean."

Dr Claus Trenner, president of the Singaporean-German Chamber of Industry and Commerce, added that the region and Singapore offer opportunities for foreign investment and business.

"We see various German companies cooperate with local entities to implement new processes in smart-city development and high-end manufacturing," he said.

"German companies, the inventors and driving force behind 'Industry 4.0', are also offering various cooperative opportunities for Singaporean businesses, especially in the digital sector, for which Singapore is a preferred destination in South-east Asia."

Mr Chan also raised the EU-Singapore Free Trade Agreement that enters into force tomorrow. "This is a tangible example of how the EU and Germany can work together with Singapore and Asean to uphold the open and rules-based global trading system as well as advance our shared economic interests."

Sustainability is another area in which both countries can work together, he noted.

"As a country that prioritises sustainable development, Germany has developed a complex energy market with strong innovative capabilities. There are certainly many more ways in which German companies can value-add to the growth of Singapore's energy generation landscape," said Mr Chan.

Singapore itself offers businesses stability, which is vital in an increasingly volatile environment, he said in a dialogue session that followed his speech.

"We try to provide stability, predictability in a business environment and the rule of law... these are intangibles... that create an environment for others to want to partner us."

This is especially significant now with global uncertainties, such as the protests in Hong Kong, Brexit and tensions between the US and China, and between South Korea and Japan, he added.

"The impact (of such events) is not just in the short term (with) the lowering of growth or gross domestic product (GDP) forecasts, but in the longer term too," Mr Chan noted. "Investments foregone today will... lead to lower growth trajectory in the medium term... This is more critical than the immediate effect."

He also said the EU has a big role to play amid the US-China trade war. "We keep talking about US-China trade tensions but their combined GDP is about a third of global GDP. There is another two-thirds and a huge part of that comes from Europe.

"That is why Europe has great powers and great responsibilities to uphold the (international) trading status."

A version of this article appeared in the print edition of The Straits Times on November 20, 2019, with the headline 'Crucial for EU, German firms to entrench presence in region: Chan'. Print Edition | Subscribe