INVESTMENTS in China were one of the largest external final demand drivers for Singapore's economy in 2015.
But faced with the risk of debt defaults and a restructuring economy in China, Singapore officials on Thursday highlighted consumption-driven sectors in China for firms here to foray into.
And taken together with drivers from other economies, consumption is becoming a main external driving force for Singapore's economy.
Said Jacelyn Teo, group director for planning at trade-promotion government agency International Enterprise (IE) Singapore on Thursday: "For Singapore companies that have gone to China, those that are plugged into their consumption-driven economy have continued quite well.
"Similarly for Asean, as consumption continues to go, the kinds of players we have like retail, food, if they can remain competitive, there will be good opportunities for them."
Ms Teo was responding to queries at a press conference on report findings released on Thursday by the Ministry of Trade and Industry (MTI).
MTI economists who drafted Thursday's Economic Survey of Singapore report calculated that investments in China contributed to a 5 per cent share of Singapore's overall gross domestic product (GDP) in 2015.
This makes it the third largest contribution in terms of final demand for goods and services produced by Singapore's economy last year.
Consumption in the United States was the largest at 7.7 per cent, while consumption in the Asean-5 countries (comprising Indonesia, Malaysia, the Philippines, Thailand and Vietnam) was second at 6.1 per cent.
In terms of markets as a whole, Asean-5 overtook the US to be the largest final demand market for Singapore's economy in 2015. Its share was 10.4 per cent, ahead of 10.1 per cent of the US.
But even as investments in China have become one of the largest drivers of Singapore's economy, there are fears that the country's slower growth and restructuring will have knock-on effects on Singapore.
Loh Khum Yean, permanent secretary of MTI, said at the same press conference that slower growth is expected in the second half of this year for China, weighed down by a slowing pace of investments.
Furthermore, "a risk that debt defaults could spike as the (Chinese) economy continues to restructure" could pose even more risks for Singapore's economy, added Mr Loh.
Thursday's report noted that Singapore's firms could tap opportunities arising from China's restructuring: "The shift towards consumption-driven growth in China as well as robust demand prospects in Asean-5 and India may present new opportunities for Singapore's goods and services exporters."
IE Singapore's Ms Teo noted anecdotally that some Singapore players in the retail space are doing well in China.
Tourism is also expected to be another major driving force for Singapore, with Chinese outbound tourist numbers continuing to grow in the short to medium term, MTI economics division director Yong Yik Wei said at the press conference.
Joseph Arena, managing director and head of global trade and receivables finance at HSBC Singapore, said infrastructure spending could also be a "ballast that is righting the ship" as Singapore's economy slows.
For one, there is immense potential demand for this in Asean, with HSBC estimating the demand at US$2.1 trillion by 2030. China's "One Belt, One Road" initiative could also boost infrastructure spending in Asean.
"The huge amounts of infrastructure spending will also generate business and trade opportunities in sectors such as transportation, construction and energy - industries in which Singapore has a world-class reputation and ones which many global companies leverage in this region," said Mr Arena.