You are here
Not bound by neat and tidy definition of a foreign player
HAVING operated in Singapore for the past 25 years, the neat and tidy definition of a foreign player does not seem to sit well with China Construction (South Pacific) Development Co Pte Ltd (CCDC) anymore.
And it is not hard to see why. More than half of its staff based here are Singaporeans or PRs; all suppliers and subcontractors that it engages are also Singaporean firms.
"We are more localised in the way we operate, in our management model, and in terms of staff composition compared to many Chinese companies operating here," said vice-chairman Li Xiao Qian, who has been working in Singapore since 1996 and has been in the management team for over 15 years.
Mr Li felt that market watchers should not paint Chinese contractors and developers with a broad brush, as each firm has its own management style. The definition of a Chinese player is also becoming murkier.
"What is the standard by which you define a company as a Chinese company? What if the company hailing from China is headed by someone with a Singapore passport?" he asked rhetorically.
On criticisms by some media reports which claim that Chinese contractors are undercutting their competitors, sourcing their own labourers and importing their materials from China, Mr Li felt that sceptics were "wearing tinted glasses" as he found no basis for these comments.
"Most projects here require qualified persons, so we need to hire such persons to meet the criteria. Having both quality and low cost is good but where can you find such workers?" he said.
But clearly, even if the suppliers and subcontractors are all Singaporean firms, they can still source their products from anywhere in the world. While many may opt for European and American products, they may still choose products under the same brand but made in China because they are cheaper, Mr Li said.
This situation may be evolving as what is made in China now is no longer cheap, but more expensive than from places such as Vietnam.
Even if construction companies prefer to hire Chinese workers due to their higher productivity among foreign workers, the number of Chinese workers wanting to work in Singapore has come down over the years, Mr Li pointed out.
At the approved overseas test centre that CCDC runs in Nanjing, in collaboration with Singapore's Building & Construction Authority, there has been a steep drop in the number of Chinese workers taking up the training and requisite exam. This could be due to high wage growth in China and fewer Chinese wanting to work in the construction sector.
Also weighing in on concerns raised by some market watchers that Chinese developers may be crowding out local ones in land tenders, Mr Li said: "From the land prices, we can see that many local developers are also throwing in high bids, so they are also confident of the market. It is not one or two developers but a number of developers have become more aggressive now in their bidding."
There was a general sense of market unease when China-based developers Logan Property and Nanshan Group put in the top bid of S$1.003 billion for the 21,109 sq m site in Stirling Road, which was 8.3 per cent higher than the second highest bid from MCL Land.
Mr Li pointed out, however, that CCDC's tender for the West Coast Vale site in February trumped the runner-up by less than one per cent. Local developers are also winning back in the collective sales market, securing most of the en bloc sites.
No doubt, for the many cash-flush Chinese developers still looking to deploy capital outside of China, Singapore is a natural choice, but this is only logical, he said.
"After 30 years of rapid growth, many Chinese private companies - whether they are of mixed ownership or private firms - have accumulated a lot of capital. Now, China's GDP growth has shrunk in the past few years while its property market is also undergoing cooling measures.
"Meanwhile, many private companies are internationalising. When they look out, Singapore's an obvious choice given its common law jurisdiction and the lack of a language barrier," he said.