Singapore can play a key role in helping Chinese enterprises grow their businesses globally. Transport Minister Lui Tuck Yew made this point on Monday during a trade conference.
A delegation from the Chinese province of Guangdong is in Singapore, seeking to deepen trade ties.
China became Singapore’s top trading partner last year, with bilateral trade exceeding US$91 billion. Almost a quarter of that came from trade between Singapore and Guangdong.
That same year, Singapore became China’s largest foreign investor, committing over US$7 billion in some 700 projects.
Guangdong is China’s richest province in terms of gross domestic product, and the first to hold a trade conference in Singapore since Chinese President Xi Jinping called for increased maritime and economic cooperation between China and ASEAN.
President Xi raised the idea of a 21st century Silk Road between the two sides last October, during his maiden trip to Southeast Asia.
Guangdong’s Party Secretary Hu Chunhua said: “The important task of leading this delegation to Singapore is a step taken towards realising the shared vision of Chinese and Singaporean leaders, to press on with the building of the 21st century maritime Silk Road. This can be achieved through boosting cooperation between Guangdong and Singapore, furthering win-win collaborations that will benefit the citizens of the two countries.”
Mr Hu met Singapore’s Transport Minister Lui Tuck Yew earlier on Monday. Mr Lui is also the co-chairman of the Singapore-Guangdong Collaboration Council.
There are business councils between Singapore and six other Chinese provinces.
Guangdong is Singapore’s top trading partner, with bilateral trade at US$17.9 billion in 2013.
Speaking at the conference on Monday, Mr Lui said Singapore can also help Guangdong build world-class, liveable cities.
He elaborated: “The challenge here goes beyond just physical infrastructure. We need to build communities with social cohesion. Singapore has been through the same process, and indeed we are still going through that same process as we rejuvenate ageing urban districts, resettle residents, and balance economic growth while addressing social needs and environmental issues.”
At the conference, more than 10 industry partnerships were inked between Singapore and Chinese companies.
Some companies involved include Guangdong Zhenrong Energy Company, ceramic membranes maker Ceraflo, business park developer Ascendas, and CapitaLand.
CapitaLand is participating in the Datansha Island Urban Redevelopment project. Datansha is a 3.55 square kilometre island located in the western part of downtown Guangzhou.
There are also non-industry related collaborations, such as a joint research institute between the South China University of Technology, Nanyang Technological University, the Technological University of Munich, and the Sino-Singapore Guangzhou Knowledge City Investment and Development Company.
The Sino-Singapore Guangzhou Knowledge City Investment and Development Company, Knowledge City Administrative Committee, and the Intellectual Property Office of Singapore also signed an agreement to jointly develop an intellectual property hub in the Sino-Singapore Guangzhou Knowledge City.
Mr Lui said Singapore will be glad to partner Guangdong as it spearheads “China’s renewed efforts to engage the world through the 21st century maritime Silk Road”.
The idea of a maritime Silk Road evokes some of the routes taken by Chinese admiral Cheng Ho on his voyages in the 15th century.
Now, observers said because Cheng Ho was largely seen as a trade emissary, China wants to latch on to that idea and rebrand itself amid military and territorial tensions in the regional seas.
Source : Channel News Asia | April 21, 2014
Wipro, one of India’s biggest outsourcing exporters by sales, reported Thursday quarterly net profit jumped 41 per cent as clients increased spending on the back of a pick-up in the global economy.
For the financial fourth quarter ended March 31, Wipro’s net profit totalled 22.3 billion rupees ($371 million) on revenues that climbed 22 percent to 117.04 billion rupees.
Billionaire Wipro chairman Azim Premji, India’s richest tech tycoon, said the technology services company’s quarterly profit was helped by “the steady improvement in the global economy”.
The profit outpaced market expectations of 21 billion rupees.
Earnings of Wipro’s rivals, Infosys and Tata Consultancy Services, have also been boosted by reviving demand in their key US and European markets.
“We saw strong deal closure in the fourth quarter, with our order book being one of the highest we have ever seen,” Wipro chief executive T.K. Kurien told reporters in the company’s home city of Bangalore.
But the firm, which has been decentralising its operations to become more swift in decision-making, forecast quarter-on-quarter revenue growth for the three months to June of around zero to two percent.
The first quarter of the financial year is traditionally a higher-spending one by clients and analysts had been hoping for a prediction of up to four percent quarter-on-quarter revenue growth.
The revenue “guidance was slightly disappointing”, said Dipen Shah, head of private client group research at Mumbai’s Kotak Securities.
But Shah added the company’s revenue “growth trajectory has improved in the past few quarters”.
Wipro, which has been seeking to be more aggressive as it struggles to gain back market share lost to rivals, said the results were calculated according to Indian accounting standards.
As part of Wipro’s reorganisation, it spun off its non-IT business into unlisted Wipro Enterprises and the company now trades on the stock exchange as a pure IT share.
India’s flagship outsourcing industry has posted generally robust profits for the final quarter of the last financial year to March 2014.
But the companies have been generally muted in their revenue outlook for the first quarter of this financial year to March 2015, disappointing some investors who had been hoping for a dramatic upturn.
Source : Channel News Asia | April 18, 2014
Foreign direct investment (FDI) into China increased 5.5 percent in the first three months of the year despite faltering in March, the government said Thursday, though outbound investment slumped.
FDI, which excludes investment in financial sectors, totalled $31.55 billion in the March quarter, the commerce ministry said in a statement. However, investment in March declined 1.47 percent to $12.24 billion, it said.
“Major Asian countries’ and regions’ investment in China generally maintained a steady growth momentum,” ministry spokesman Shen Danyang said.
Foreign investment into China rebounded in 2013 to $117.59 billion as confidence in the country’s growth potential picked up, but the forecast this year is for slowing expansion in gross domestic product (GDP).
China announced Wednesday that GDP grew 7.4 percent in the first quarter, slowing from 7.7 percent in October-December and marking the slowest expansion in 18 months.
During the first quarter, FDI from the 10-member Association of Southeast Asian Nations (ASEAN) increased 7.84 percent to $1.97 billion, the ministry said.
Investment from the United States fell 1.91 percent to $1.04 billion, while that from the European Union (EU) slumped 24.52 percent to $1.55 billion.
Separately, Chinese overseas investment, excluding financial sectors, fell 16.5 percent in the first quarter year-on-year to $19.9 billion, the ministry said, with investment to Hong Kong, ASEAN and European Union leading the decline.
Investment to seven economies — Hong Kong, ASEAN, the EU, Australia, the US, Russia and Japan — amounted to $12.63 billion, or 63.5 percent of the quarterly total, the ministry said.
Chinese investment to the EU declined seven percent, it said.
“Two-way investment between China and the EU declined in the first quarter due to factors such as specific projects, industries and areas,” Shen said. “But we think the fall will be temporary rather than a trend.”
Investment to the United States, however, jumped 105.2 percent to $1.07 billion.
China’s total outstanding overseas investment in non-financial sectors as of the end of March stood at $545.6 billion, the ministry said.
Investment overseas rose last year, hitting $90.17 billion, and officials said it could overtake FDI this year.
Source : Channel News Asia | April 17, 2014
Singapore’s economy grew by 5.1 per cent in the first quarter of 2014 from a year ago due to an improvement in manufacturing, with moderate economic growth expected with a projected expansion of 2–4 per cent in 2014.
Singapore’s economy grew by 5.1 per cent in the first quarter of 2014 from a year ago as an improvement in manufacturing offset a slowdown in services, the Ministry of Trade and Industry said on Monday.
As for inflation, the Monetary Authority of Singapore said in a separate news release that it’s expected to pick up in the coming months as firms continue to pass on accumulated cost increases to consumer prices, but it should ease in the second half of 2014.
It added that it will maintain its policy of a modest and gradual appreciation of the S$NEER policy band.
According to the latest advance estimates released by the Ministry of Trade and Industry, Singapore’s GDP rose by a modest 0.1 per cent in Q1 2014 on a quarter-on-quarter seasonally adjusted annualised basis, following the 6.1 per cent expansion in Q4.
The 5.1 per cent growth rate was, however, lower than the median expansion of 5.4 per cent forecast by economists and below the 5.5 per cent growth achieved in the previous quarter.
Economists said the advance estimate of 5.1 per cent is a conservative one and likely to be revised upwards.
Senior Economist of DBS Bank, Irvin Seah, said: “You got to take the set of figures with a pinch of salt, because the recent track record for the advance estimate number hasn’t been that good. For example, last year, in three out of four quarters, the advance estimate totally missed the mark, in the sense that, you know, the advance estimate shows that the economy is heading one directions, and then when the final figure came out, you know, it was the other direction.”
On a year-on-year basis, the manufacturing sector grew by 8.0 per cent, following the 7.0 per cent expansion in the previous quarter.
The faster pace of expansion was largely due to a sharp rebound in biomedical manufacturing output and stronger growth in chemicals output.
Services grew by 4.7 per cent on a year-on-year basis in the first quarter, lower than the 5.9 per cent growth in the previous quarter.
The moderation in growth was largely due to slower expansion in the wholesale & retail trade and finance & insurance sectors.
Economists said it is hard to quantify exactly by how much, but the manpower crunch faced by the services sector could be a reason why its growth has been constrained.
Curbs on foreign worker growth have added more to the challenges faced by several sectors.
Edward Lee, Regional Head of Research – Southeast Asia, Standard Chartered Bank, said: “Possibly, you can say foreign labour force adds about one to 1.5 percentage points to growth over the last 10 years or so. But it’s really hard to be precise. This is sort of average growth. But we do know on anecdotal evidence that businesses, especially the smaller and medium enterprise companies, do complain about their inability to find workers.”
On a quarter-on-quarter seasonally-adjusted annualised basis, the economy grew by 0.1 per cent — moderating from the 6.1 per cent expansion in the preceding quarter — as services contracted.
According to the MAS, the Singapore economy is projected to expand 2–4 per cent in 2014, although the growth profile could be uneven.
“The Singapore economy is expected to grow at a moderate pace in 2014,supported by the cyclical uplift in the industrialised economies.
“Notwithstanding the weak growth outturn in Q1, the level of economic activity should stay on a broad upward trajectory for the rest of the year” said the MAS in a statement.
It went on to say that the outlook for the global economy has brightened, especially with the US recovery in the labour market expected to continue, lending support to consumer spending and the Eurozone forecast to emerge from two consecutive years of economic contraction.
Against this backdrop, the MAS said Singapore’s trade-related sectors should grow at a moderate pace.
Domestic-oriented activities are expected to stay resilient, supported by construction of transportation, housing and social infrastructure.
Overall growth, it cautioned will be capped by supply constraints, particularly in the labour market.
Source : Channel News Asia | April 14, 2014
Global commerce is set to grow by 4.7 per cent this year, the World Trade Organization (WTO) said on Monday, with recovery in rich economies expected to mitigate risks in developing nations.
The WTO previously had forecast that trade would expand by 4.5 per cent in 2014, up from an estimated rate of 2.1 per cent in 2013.
So the latest forecast points to substantially more than a doubling of the growth achieved last year.
Trade is a key measure of the health of the global economy which it both stimulates and reflects.
Asia will continue to fuel growth rates, the WTO said, although China’s exceptionally strong expansion is slowing.
In addition, Europe and North America’s recovery is also set to be a key driver on both the import and export fronts.
“For the last two years trade growth has been sluggish. Looking ahead, if GDP (gross domestic product) forecasts hold true, we expect a broad-based but modest upturn in 2014, and further consolidation of this growth in 2015,” WTO chief Roberto Azevedo told reporters.
The WTO predicted that trade growth would pick up pace next year, reaching 5.3 per cent.
“Prospects for world trade and output in 2014 and 2015 are better than they have been for some time, but leading economies remain fragile, including some of the most dynamic developing countries that until recently were propping up demand,” the WTO said in a statement.
“Downside risks to trade abound, but significant upside potential also exists, as the US economy seems to be gaining momentum and the European Union appears to have turned a corner,” it said.
“At the same time, developing economies have slowed appreciably, for a variety of reasons both internal and external. Which of these forces is stronger may determine how world trade evolves over the next one to two years”.
WTO economists noted that a growth rate of 5.3 per cent in 2015 would bring trade growth back to its 20-year average.
For the past two years, growth has averaged only 2.2 per cent.
WTO economists said that the 2014 forecast was based on an assumption that global GDP would expand by 3.0 per cent.
“Risks to the trade forecast are still mostly on the downside, but there is some upside potential, particularly since trade in developed economies is starting from such a low base,” the WTO said.
“However, volatility is likely to be a defining feature of 2014 as monetary policy in developed economies becomes less accommodative,” it said.
The WTO said that risks had receded in Europe thanks to an easing of the eurozone crisis, and in the United States owing to the easing of brinksmanship over budget limits and tax policy between the Obama administration and the Republicans which led to last year’s government shutdown.
Concerns in developing economies include large current account deficits in countries such as India and Turkey, currency crises in some countries including Argentina, over-investment in productive capacity, and rebalancing economies to rely more on domestic consumption and less on exports.
The WTO also pointed to geopolitical risks, notably conflicts in the Middle East, Asia and Ukraine, which it said could provoke higher energy prices and disrupt trade flows if they escalate.
The 158 economies which make up the WTO set trade rules among themselves in an attempt to ensure a level playing field and spur growth by opening markets and removing trade barriers, including subsidies, excessive taxes and regulations.
Created in 1995, the WTO launched its Doha Round of trade liberalisation talks in 2001 with the stated aim of underpinning development in poorer nations.
The talks repeatedly faltered in the face of obstacles set in particular by China, the EU, India and the United States, but negotiators last December struck a partial deal to cut trade costs by slashing red tape in customs services.
Azevedo urged governments to build on that modest breakthrough.
“It’s clear that trade is going to improve as the world economy improves. But I know that just waiting for an automatic increase in trade will not be enough for WTO members,” he said.
Source : Channel News Asia | April 14, 2014
Eye care pharmaceutical firm Alcon has moved into its new S$200 million manufacturing plant in Tuas Biomedical Park in Singapore.
The move will help the firm boost its capacity to meet the growing eye care needs in Asia.
The new 330,000 square foot plant will manufacture products for patients with dry eyes, glaucoma, allergies and bacterial infections in the eye.
US-based Alcon is the second largest division of the Novartis Group.
This is Novartis’ third manufacturing plant and Alcon’s second facility in Singapore.
In 2005, Alcon opened a contact lens manufacturing facility in the Tuas Biomedical Park.
Country President for Novartis Singapore and Head of Group Country Management, Christopher Snook, said: “Singapore’s robust biomedical presence, and the highly skilled and knowledgeable workforce made it easy to choose Singapore for our new site.”
“Asia is a very fast growth market and region for us and it is right therefore that we produce products nearby where our customer base is. That’s why this facility, our third factory in Singapore, is a specialist eye care facility and this is on top of the other facilities, pharmaceutical manufacturing and contact lens factories that we have in Singapore already,” he added.
Source : Channel News Asia | April 14, 2014
Foreign Affairs and Law Minister K Shanmugam has urged Singapore businesses to go for quality growth to tackle the challenge of growing manpower constraints.
Speaking at the Deloitte’s Global Tax Conference on Wednesday, he said it is not viable for Singapore to keep increasing manpower at the same rate as in recent years.
Mr Shanmugam said: “The individual perspective assumes you can keep growing with more and more input of labour, without any constraints on land.
“We have to take the hard position and say that we accept that we have to cut back on the factor of input of labour, because it’s not sustainable to keep growing at this rate. We have to try and go for quality growth.
“That’s a nice catch phrase but for a lot of people, without additional labour, quality growth would not be possible. But these are the trade-offs we have had to make.”
He also addressed questions about Singapore being seen as a ‘tax haven’, especially for tax evasion.
Mr Shanmugam said Singapore has a fundamentally clean system, with robust safety mechanisms to protect against money laundering.
Banks are also required to get to know clients and their sources of funds.
Mr Shanmugam also expressed his bullish outlook on regional integration efforts through the ASEAN Economic Community.
He said that significant diversity within the grouping may pose challenges in the near-to-medium term.
However, he believes the economic potential for integration is substantial.
Mr Shanmugam said: “600 million people in a geographically defined area, sitting between three large economies — India, China and Japan — second largest, third largest, and India among the top 10 economies in the world.
“So you actually have four major blocs — India, ASEAN, China, Japan — huge potential. And if you integrate Australia, which is another G20 country, also $2 trillion, we’re talking about very substantial synergies, which is why ideas like the TPP (Trans-Pacific Partnership) make a lot of sense.”
Source : Channel News Asia | April 9, 2014