Mr Lee Yi Shyan at SSBA-SCS 5th Annual Business Forum, 27 Nov 2009

Speech by Mr Lee Yi Shyan, Minister of State for Trade & Industry and Manpower, SSBS-SCS 5th Annual Business Forum, 27th November 2009, 9.15AM, Shangri-La Hotel, Pudong 

Distinguished Guests,

Ladies and Gentlemen,

Good morning,

Thank you for inviting me to the SSBA-SCS’s 5th Annual Business Forum this morning.

That many Singaporean businesses are coming together to share insights with each other speaks well of our growing desire in wanting to collaborate and cooperate with each other.

Yes, collaboration and cooperation, or hunting in a pack, is an important point which I will come back to later on.

I have just arrived in Shanghai yesterday after a three-day business mission to Suzhou and Wuxi with over 50 Singapore businessmen. We held the 3rd Singapore-Jiangsu Cooperation Council meeting in Wuxi’s Lingshan Buddhist Scenic Site. I have seen many historical and architectural sites around the world, but I must say I was very impressed with the architecture, internal decorations, carvings, paintings and cultural artifacts inside the Lingshan Braham Palace (灵山梵宫). In my view, it is a world-class development. The project reflects the skillful combination of Chinese intricate architecture with western, Roman-style grandeur.

It is yet another manifestation of Chinese ability to assimilate the best knowledge of the world into its creation.

Coming back to the Council meeting, we had fruitful discussions with Jiangsu Party Secretary Liang Baohua and other leaders on how Singapore and Jiangsu could deepen our cooperation in six key areas: Trade & Economic, especially the Singapore-Nanjing Eco High-Tech Island and Suzhou-Nantong High Tech Park; Environmental Management, especially Taihu’s conservations); Education and Vocational Training; Tourism; Science and Technology; and Training of Jiangsu officials.

The Singapore-Jiangsu Cooperation Council is one of the seven provincial councils between our two countries. The other six councils are with Liaoning, Tianjin, Zhejiang, Shandong, Sichuan and Guangdong. In fact, later this afternoon, I will be flying over to Jinan to chair the Singapore-Shandong Business Council meeting tomorrow.

These seven business councils, under the umbrella of Joint Council for Bilateral Cooperation (JCBC) co-chaired by DPM Wong Kan Seng and Vice Premier Wang Qishan reflect the strong and substantive ties between our two countries. Our bilateral relation is strategic and long term in nature. The councils provide us the platform for frequent interactions to build trust and appreciation of each other’s developmental needs. In his recent visit to Singapore, President Hu Jintao noted with satisfaction China’s many regional cooperation mechanisms with Singapore.

Next year marks the 20th anniversary of Singapore-China diplomatic relations. He urged both countries to consolidate our achievements in the first 20 years of our bilateral relations, and think of ways to bring our relations to the next level in the future.

This brings me to the theme of today’s forum: “China- the next leap". Post-economic crisis, China’s role in the global economy has become even more pressing. With its GDP soon surpassing Japan to be the second largest in the world, China seems to be assuming a larger role as a domestic-consumption driven economy, rather than one being an overwhelmingly export-dependent economy. How soon China can make this transition is obviously of great interest to all of us because the new global trade patterns will also shape our future business models: what our businesses must do to cater to and compete in the new market order.

As a person travelling frequently between markets in China, the Middle East and Russia, I see new and growing trade patterns between East Asia and West Asia, China and Africa, China and Austra-Asia, China and ASEAN. While it may be an over-simplification to paint a picture of a China-centric trade model for the future, China’s increasing prominence as both an export and consumption economy cannot be denied. Already, it has climbed up its trade rankings with countries near and afar, including ASEAN and Singapore.

China in her next leap will be even larger. The political, economic and people-to-people connectivity's we have built up with China will enable us to continue to create win-win opportunities with the Chinese economy. But how effective we can turn these connectivity's into economic spin-offs depends on how well we can meet the needs of the future Chinese economy. The question of how fast our firms are adapting their business models, developing new products and services for this market becomes key.

It is not possible to discuss all variations of firm-level strategies here, but I would like to suggest three points for your considerations.

The first consideration is to uphold and re-invest in the Singapore Brand. To be sure, the Singapore Brand enjoys good or even high standings in many countries, ranging from provinces and cities in China to countries I visited in the Middle East and Africa. Many of them are intrigued by how we built our city in Singapore, combining so many desirable attributes: most competitive economy, garden city, air-hub, busiest container port, financial center, manufacturing powerhouse etc. And all these were done without natural resources. Looking into the future, 5, 10 and 15 years from now, would others still find Singapore so intriguing? When others have caught up, what would we offer that is new and unique? The Singapore brand now has the attributes of high quality, integrity, dependability and efficiency. What would be our future brand attributes?

Without constant re-investment and injection of new contents, a brand would wane. This is true for a country, and also true for firms. We know brand building is not an overnight effort, nor simply a new logo or advertisement collateral. Branding is created through consistency in product and service quality delivery. Our firms will therefore have to constantly innovate and adapt, enriching its offerings ahead of competition to stay relevant.

The second consideration is collaborating and cooperating with each other, or hunting in a pack. This is so that our firms can take on much larger and complex projects in markets such as China. Our developmental experience using Singapore as a test-bed has been useful to many other cities.

But with Singapore’s economy maturing in terms of having less developmental space, our experience of building the next Greenfield airport, seaport, rail-station, new township or new MRT line will have to come from overseas projects. If we disadvantage ourselves by not working together, and be contented with doing small parts of a large project, many other firms would overtake us. Today, our firms can market themselves based on installed sites in Singapore. In time to come, when many other cities have built up their infrastructure, they would have acquired larger and more sophisticated experience in the process. It is therefore not an option for our firms to remain small. Instead, they have to think of ways to band together to take on large and complex projects overseas, including China. This is how they can move up the value chain, to grow their competencies.

The third consideration is hiring international talents. When I speak to our firms with operations overseas, they often tell me that they would grow faster if they were not constrained by the lack of managerial talents in their teams. Hiring and putting together a team of talents from different nationalities have never been an easy job. But many multinational corporations have done it, and it can be done. Our firms must change their mindsets, they have to think like a small MNC. They have to evolve a culture that is based on meritocracy, that regardless of nationalities, employees of the company can rise to the top based on merits. Some of our leading companies already have foreign talents in their boards and management teams. More can be done to help Singapore firms build up the capacity to absorb and organize talents.

Coming back to China. As of 2008, Singapore firms have cumulatively invested around US$38 billion in over 17,000 projects in China. Last year, one million Chinese visited Singapore and 900,000 Singaporeans visited China. Our knowledge of the China market is substantial, but it has to be renewed and refreshed ever so often because the market here is changing rapidly.

I am glad to know that there are more than 5,000 Singaporeans working and living in Shanghai, and many more in the vicinity and other cities of China. Each one of you in SSBA and SCS serves as a ‘live’ node in the web of China knowledge that Singaporeans and firms back home and elsewhere can tap on. I commend you for organizing this forum and other activities among your members to help us sense the heartbeat of this market.

Let me also encourage you to use this platform and others to create more partnerships among Singapore companies for greater success. Let us make the next leap together!

Thank you.