Asean offers S'pore SMEs more openings than China: SCCCI official

Singapore

INVESTMENT and expansion opportunities in South-east Asia are far more attractive than those in China for small Singapore businesses, which should be educated on how to tap these opportunities, the top executive of a prominent business chamber here said on Friday.

This would have benefits for Singapore as it makes a transition into becoming a high-productivity economy, said Lau Tai San, vice-president of the Singapore Chinese Chamber of Commerce and Industry (SCCCI).

"Enterprises here should look towards the region and treat Asean as one single market. Only then, armed with increased business volume, can we talk about improving productivity for Singapore," he said.

He was speaking to The Business Times at a business outlook forum co-organised by SCCCI and Credit Suisse.

The SCCCI has more than 4,000 corporate members and 150 trade association members. These trade associations in turn represent more than 40,000 companies of all sizes from a wide spectrum of trades and industries.

Singapore had about 189,000 enterprises in 2014, of which 99 per cent were small and medium-sized enterprises (SMEs).

Mr Lau said that the Asean Economic Community (AEC), which came into being on Dec 31 last year and created a single market with few barriers to the flow of trade, capital and professional labour in the region, has come at an opportune time.

Growth in Singapore has slowed, and rentals and labour costs have gone up amid weak economic sentiment, he said, making it hard for businesses here to pass on costs to clients.

At the same time, China, Singapore's largest trading partner, is facing its own slowing economy.

At a time when the global economy is slowing down, SMEs need to work harder to plant the seeds for future growth, he said:

"When times are good, businesses will be busy making money. When things are slow, it's good to go out there and find out more about potential opportunities."

Urging SMEs to find out more about the region, he noted that immense growth potential has been seen in Asean, evidenced by the Indonesian, Philippine and Vietnamese growth rates.

Saying that China was already saturated with institutional investors and big companies, he said: "I think that the AEC will give SMEs more opportunities than China."

The SCCCI is thus hoping to help its members tap into promising markets overseas; it aims to liaise with different government agencies and collate clear information on how the AEC can help its members.

Mr Lau said this does not mean that China should not figure in the plans of Singapore SMEs, because the Chinese government's Maritime Silk Road initiative is expected to direct investment flows into the Asean region, he said.

"Singaporean SMEs can look to partner with Chinese SMEs to tap into more opportunities," he said.

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