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A conduit for strong business links
THE good diplomatic ties between Singapore and Germany have been paralleled by the progress made in business relations between the two countries.
"Over the past 50 years, business relations between both Singapore and Germany have seen a lot of progress. Economically, much has been developed through strong partnerships between both countries," says Singaporean-German Chamber of Industry and Commerce (SGC) president Wolfgang Huppenbauer.
During the period when Singapore's first prime minister Lee Kuan Yew was leading the country, there were many interactions in the 1970s and '80s between the leaders of both countries. As a result, Germany has evolved to become Singapore's top trading partner in the European Union.
"The SGC's role in strengthening the business relations between both countries was made visible from 2004 when the chamber was officially set up. Since then, the SGC has been consistently involved in promoting Germany to companies in Singapore and vice-versa," Mr Huppenbauer says.
Beyond that, the increasing number of mutual visits by delegations from the two countries paved the way for many German companies to set up office in Singapore and also more companies from the city-state have expanded into Germany.
For example, Prime Minister Lee Hsien Loong's visit to Germany in February this year was organised by the SGC in close partnership with the Singapore Business Federation, points out Mr Huppenbauer.
This delegation, comprising business leaders from diverse industries, was given first-hand knowledge of the market dynamics and opportunities in Germany. It also marks an important milestone in the 50 years of relations between both countries.
Mr Huppenbauer sees tremendous potential for more investment flows between the two countries. For example, he notes that the number of German companies in Singapore has almost tripled from around 600 10 years ago to nearly 1,500 currently, with interest continuing to grow.
"Reasons for the draw of Singapore are many. The reliable infrastructure, financial stability, the sound political, economic and legal framework governing the country and, of course, the qualified workforce and absence of corruption. All these factors not only draw German business to Singapore, but also entice them to establish Singapore as their regional hub for Asean and beyond," says Mr Huppenbauer.
Germany is the largest economy and largest market in the European Union. An extremely skilled and qualified workforce producing products of exceptional quality and a strong focus on research and development (R&D) have made the country a technological leader in various industries.
"The country is also well-known for the 'Mittelstand' (large mid-sized companies) that, in many cases, are world leaders in their respective fields. Singapore, therefore, gains by establishing technological cooperation with Germany," he adds.
Mr Huppenbauer sees two important developments within the region that will be key to shaping business and trade ties between Germany and Singapore.
Firstly, the EU-Singapore Free Trade Agreement, slated to be implemented in 2016, will allow for more flexible and easier trading between both countries. Among other things, it will also open up more market opportunities for both German and Singaporean companies, he notes.
"Both nations stand to gain from one another in many areas of expertise and experience," Mr Huppenbauer points out.
Secondly, the Asean Economic Community (AEC), which has the goal of regional economic integration by the end of this year, will see the eventual establishment of one single market and production base which will provide myriad opportunities for German companies.
"The AEC, while offering greater market opportunities to European companies, will also integrate the entire region, thereby offering more synergy for businesses, enhance regional trade and strengthen cooperation between the member countries and also enhance Singapore's role as the economic centre of Asean," Mr Huppenbauer says.
"The SGC serves as the first point of contact for German companies interested in Singapore as well as for Singaporean companies interested in either doing business in Germany or with German companies based in Singapore," he adds.
Mr Huppenbauer explains that the SGC plays the role of a conduit between Germany and Singapore, and links people and businesses. The SGC also offers a platform for making contacts and for networking with expert groups through the many seminars it organises. "This, in itself, is a significant and important role which SGC plays in the growth of bilateral business relations," he notes.
Looking ahead, he says there are many initiatives being introduced by the Singapore government that offer great opportunities. In the education field, for example, the dual academic education, Skills Future and applied university training offer prospects for German companies to share their knowledge.
"Similarly, in the technological sector, with the recent development of the Smart Nation initiative, you see more innovative solutions being offered in the areas of public transport systems, waste management, water purification and management, as well as healthcare and medical technology for an ageing society, an issue of specific and increasing relevance to Singapore," he notes.
Meanwhile, within the R&D sector, there has been close cooperation with Singapore agencies and GLCs (government-linked companies) in the design of products to meet local and Asian demands. The high-end manufacturing and Industry 4.0 programmes are also highly important areas of focus for Singapore, and Germany has significant expertise in these areas and can provide the specialisation it requires, Mr Huppenbauer concludes.