Professor Tan Chorh Chuan, President, National University of Singapore
Dean Bernard Yeung
Chairman, Mr Liew Mun Leong, and Members of the China Business Centre Advisory Council
Distinguished Guests, NUS Business School alumni, staff and students
Ladies and gentlemen,
Good evening,
It gives me great pleasure to join you today for the launch of the China Business Centre of the NUS Business School. Let me first congratulate the NUS Business School on this significant initiative. With its track record of rigorous academic research and extensive network of relations, the NUS Business School and this Centre is well-poised to play a key role in deepening mutual understanding in order to realise the full potential of China-Singapore economic ties.
There are three reasons why this initiative is apposite and timely. The first is China’s remarkable economic growth in recent decades, and the opportunities it offers the people of China and the rest of the world. Indeed, a significant global milestone was achieved in 2013, when China replaced Japan as the world’s second-biggest consumer economy. Domestic consumption will continue to increase as China embarks on structural reforms to rebalance the economy, from investment-led growth towards one anchored by consumption.
There are several drivers that contribute to China’s economic prospects. One factor is the growth of the middle class and its rising disposable income. This translates into higher demand for quality products and services in sectors as diverse as food and retail, to healthcare and education services.
Another factor is urbanisation. Today, according to official data, there are already 14 cities with a population of 4 million or more in China. China plans to move a further 250 million rural residents into cities by 2025. This calls for major investments in public infrastructure, transport and other urban solutions, to support expanding urban populations while ensuring that the cities remain environmentally sustainable places to live, work, and play.
Given the competitive strengths of Singapore companies, these trends offer them interesting opportunities to participate in China’s growth. Singapore companies venturing into China have also benefited from the strong reputation of the Singapore brand. Indeed, the China Business Climate Survey, conducted by International Enterprise (IE) Singapore, found that Singapore businesses enjoy good standing in China due to our trustworthy image and cultural affinity including language. But, to fully realise the potential, it is essential that our businesses understand the nature and nuances of the opportunity, the regulatory environment, and the variations across the cities, provinces and regions in China. And in that regard, the China Business Centre is well-placed to address this need.
The second reason is the evolving nature of China’s engagement with the regional and global economy. China is a key member of the World Trade Organisation. It is also participating in regional free trade initiatives like the Regional Comprehensive Economic Partnership (RCEP) involving ASEAN and China, Japan, South Korea, India, Australia and New Zealand.
As China’s economy has expanded, its companies have also grown in size with many seeking to expand their footprint globally. Chinese companies now occupy five of the top ten spots in the Forbes Global 2000 ranking of the largest companies in the world, including the top three spots. Singapore is also host to many major Chinese companies including Huaneng Power in the energy sector, the Industrial and Commercial Bank of China (ICBC) in the financial sector, and Huawei in the information and communications technology sector. The most recent addition is Alibaba which invested in SingPost.
Singapore can serve as a node in the regional and global expansion plans for Chinese companies. Already, over 5200 Chinese companies have established operations in Singapore. And, the work of the China Business Centre can help to further facilitate this process. In particular, the Centre can help Chinese companies understand how they can benefit from Singapore’s connectivity with regional and global markets, through our 20 Free Trade Agreements (FTAs), and the many Investment Guarantee Agreements (IGAs) and Double Taxation Agreements (DTAs). China incorporated companies can also directly list on the Singapore Exchange (SGX), allowing them to tap on the Singapore’s deep and liquid capital markets. Being the world’s largest offshore Yuan clearing centre outside of China and Hong Kong, Singapore is also well positioned to serve as a gateway for trade and investment flows from China into Southeast Asia.
Finally, the China Business Centre can also catalyse the process of Chinese companies using Singapore as a springboard to expand into Southeast Asia. ASEAN, with a population of 600m and combined GDP of US$2.4 trillion is an attractive investment destination, a sizeable market and competitive manufacturing base. These opportunities will be further enhanced with the establishment of the ASEAN Economic Community (AEC) next year, which will create a single regional market, facilitate the flow of goods and services, and reduce tariff and administrative costs. Chinese companies can partner and tap on the familiarity and expertise in the region of Singapore companies to pursue opportunities in Southeast Asia. A recent example is the collaboration between SingPost and Alibaba, which leverages on SingPost’s strong delivery networks in the region, and Alibaba’s expertise in e-commerce and technology.
In conclusion, the China Business Centre is being established at a time when developments in China and the region offer interesting possibilities. There is great potential for both Chinese and Singapore companies to collaborate to venture into China, Singapore, and Southeast Asia. And, I believe that the China Business Centre can play a useful role in this regard, not only through its research and academic courses, but also by providing a platform for industry leaders to discuss pertinent issues and build lasting partnerships. Given its close ties with its industry partners, I am confident that the Centre will surpass these expectations and be of value to businesses.
I congratulate the National University of Singapore and NUS Business School on this initiative, and wish the China Business Centre all the best. Thank you.