China tech firms’ entry brings ‘bonanza’

TECH firms, including those from China, have added heat to the talent war in Singapore – but industry players and academics to whom Lianhe Zaobao spoke felt that although this creates short-term pressure, it also creates more long-term opportunities for the country.

Huang Yishu, founder of IT specialist recruitment agency Dada Consultants, said that his business had suffered in the last 2 years as companies retrenched workers or even wound up due to the pandemic. “If not for the arrival of the tech giants in the last 2 years, it would have been hard for my company to endure,” he said.

He thus believes that while Chinese tech companies have brought about more competition in Singapore, they have also brought new opportunities for small and medium-sized enterprises (SMEs) amid the profound impact of the pandemic.

Thanks to these “Big Factories” – as China’s tech giants are dubbed – SMEs have more opportunities for financing and collaboration, he said: “Small businesses rely on the ‘big trees’ beside them to grow.”

Wang Yanbo, associate professor of Strategy and Innovation at the University of Hong Kong, said that in the short term, intense competition for talent will push up wages and lead to inflation in goods and housing prices, creating a negative impact – but in the long term, the talent brought in by Chinese tech companies will be a “big bonanza” for Singapore.

“This is not just in terms of the talent themselves, but also their wealth of commercial knowledge and international experience,” Prof Wang said.

Huang agreed that whether tech titans are Chinese or US-funded, they fill capability gaps in Singapore; bring in advanced productivity, technology, and know-how; inject vitality into the local market; and generate more opportunities.

Meanwhile, the fortunes of China tech companies have been on the wane in the past 2 years, especially late last year when Kuaishou, Bytedance, Alibaba and other market leaders saw unprecedented layoffs.

Government crackdowns on the tech industry in China may have abated for now, but the future no longer looks rosy for the sector domestically.

Prof Wang’s analysis is that the expansion of Chinese tech companies – especially internet companies – into South-east Asia is part of a wider trend that has been accelerated by the issues of data privacy and the regulatory scrutiny on capital by the Chinese government. Singapore, with its highly developed regulatory system, has naturally become the destination of choice for these companies.

As for whether the waves of retrenchments back home will affect Chinese tech companies’ regional headquarters in Singapore, Huang said that the answer seems to be no, for now. Instead, global economic developments are key, he said: “If the economic crisis really hits, no sector will escape unscathed.”