SINGAPORE - Companies across China are gradually resuming their operations as the world's second-largest economy recovers from the fallout of the coronavirus outbreak, Senior Minister of State for Trade and Industry Chee Hong Tat said in Parliament on Wednesday (March 25).
"The situation in China is stabilising with a progressive return to normalcy," he said.
"Given the size and growth potential of China's economy, many businesses are likely to see continued value in keeping some production capabilities close to their final demand markets in China," he added.
Mr Saktiandi Supaat (Bishan-Toa Payoh GRC) had asked whether the Government sees a need to relocate commercial factories run by Singapore small and medium-sized enterprises (SMEs) from Hubei, Zhejiang, Henan and Guangdong provinces for their long-term survival.
The World Health Organisation said last month that it was closely watching the four provinces, among others, for signs of growing infection hot spots. Hubei had been identified as the epicentre of the deadly Covid-19 outbreak.
Mr Chee said: "Whether Singapore SMEs based in these four Chinese provinces will relocate their factories is a commercial decision that they have to make. Businesses regularly review their markets and supply chains."
Elaborating, he said that companies had been thinking about the resilience of their supply chains, and that the Covid-19 outbreak has given them greater impetus to do so.
He added that the Covid-19 spread has also gone beyond the four provinces Mr Saktiandi asked about.
Nevertheless, the four provinces comprised about 17 per cent of Singapore's direct investment in China though the ministry does not have data on the number of factories local SMEs have set up overseas, he added.
Seven in 10 Singapore companies have started resuming their operations in China, the Singapore Chamber of Commerce and Industry in China said last month.
Mr Chee said: "We can expect this figure to rise as the situation in China gradually improves."
He added that the Chinese Ministry of Commerce has also introduced measures to support foreign companies, including expediting licence approvals and resolving labour shortages, to quicken the recovery process.