Mr Toshinao Nakagawa,

Parliamentary Vice-Minister, Ministry of Economy, Trade and Industry

 

Mr Hiroyuki Ishige

Chairman and CEO, Japan External Trade Organization

 

Distinguished Guests

 

Ladies and Gentlemen

皆様、おはようございます

 

1. It gives me great pleasure to speak at this business symposium to mark the 50th anniversary of bilateral ties between Singapore and Japan. I would like to thank the Straits Times, Nikkei Business Publications, JETRO and IE Singapore for bringing everyone here together to celebrate this special occasion.

 

 

2. Singapore and Japan share longstanding and deep bilateral economic relations. We are important trading partners to each other. Our bilateral trade volume has increased 80-fold since we first established diplomatic relations 50 years ago. We are also the top Asian investor to each other. In fact, Japanese investments into Singapore have jumped 900-fold since 1970. Conversely, Singapore companies’ investments in Japan are diversifying from traditional sectors like real estate and logistics to new areas like healthcare, retail, and food & beverage services.

3. Our strong trade and investment relations are underpinned by the Japan-Singapore New-Age Economic Partnership Agreement (JSEPA). Signed in 2002, the JSEPA is a significant milestone of our relations. It was Japan’s first bilateral economic partnership agreement and Singapore’s earliest with a major trading partner.

 

4. We are also like-minded partners in regional economic integration. Singapore and Japan are both members of the Trans-Pacific Partnership (TPP), the ASEAN-Japan Comprehensive Economic Partnership (AJCEP) and the Regional Comprehensive Economic Partnership (RCEP). These bilateral and regional agreements reflect the multiple pathways through which we advance free trade. We should continue to show our commitment to free trade in the face of increasing global protectionist tendencies. Hence, besides working on ratifying the TPP, we are both looking to review the JSEPA to ensure its relevance to Singapore and Japanese companies.

 

5. Beyond economic cooperation, the friendship between Singapore and Japan has deepened through frequent cultural exchanges. Language is the window to culture, and Singapore’s Ministry of Education has supported the study of Japanese as a third language for many years. I myself had studied Japanese for five years, and visited Japan as a 交換留学生 when I was in secondary school. Many Japanese and Singaporeans have also been learning about each other’s culture through food. For example, the Japan Food Town in Singapore is a hit with many Singaporeans. In turn, Japanese friends now have the opportunity to taste Singaporean chicken rice from Wee Nam Kee and desserts by award-winning pastry chef Janice Wong in Tokyo. If you like the fragrant barbecued pork from Bee Cheng Hiang, which you will have the chance to sample today, you can visit their newly-opened store in Ginza for more.

6. People-to-people exchange programmes promote mutual understanding. For example, through the Southeast Asian and Japanese Youth Programme (SSEAYP) and the Japan-East Asia Network of Exchange for Students and Youths (JENESYS), youths from Japan, Singapore and other ASEAN countries have the chance to interact and foster regional friendships.

 

 

7. I would now like to elaborate on how ASEAN is a bright spot and remains an important market for companies.

 

8. First, as a growing market of 620 million people, ASEAN is a pivotal consumer market of the future. McKinsey estimates that by 2025, 125 million ASEAN households will belong to the “consuming class” with incomes above a level at which they can make significant discretionary purchases. Growth opportunities are also expected in ASEAN’s relatively underdeveloped e-commerce space due to increasing spending power and Internet penetration.

 

9. Second, ASEAN is increasingly integrated. The ASEAN Economic Community (AEC), which was established in 2015, has created more business opportunities for companies in the region by eliminating barriers and improving market access. ASEAN is also estimated to become the fourth largest single market in the world after the European Union, United States and China by 2030.

10. Third, a fast urbanising ASEAN will generate demand for infrastructure development. By 2030, about 65% of ASEAN’s population will live in urban cities. An estimated US$60 billion is needed annually till 2022 to fulfil all the region’s infrastructure needs. There will be opportunities in areas such as transport, healthcare, water and sanitation.

 

11. Singapore is already tapping this large market through a network of multilateral development banks and network of professional services with strong ASEAN knowledge and networks. For instance, Singapore worked with the Asian Development Bank (ADB) to establish the Asia Infrastructure Centre of Excellence (AICOE) in 2014 to structure a strong pipeline of bankable projects.

 

12. I welcome Japanese companies to work with Singapore companies to realise the potential of the world’s next largest market together.

 

 

13. In our next phase of growth, we are promoting Singapore as a sustainable location for innovation such as advanced manufacturing and Internet of Things (IoT) solutions. Singapore and Japan share complementary strengths that make us good partners to pursue innovation-driven business opportunities in ASEAN and beyond.

14. First, Singapore is an ideal base for Japanese companies to undertake innovation-intensive activities and develop solutions tailored for regional consumers. This is because Singapore is a microcosm of a highly-diversified Asia and in close proximity to important markets like ASEAN, China and India. For example, Japanese pharmaceutical giant, Takeda, announced in 2015 that it would be setting up its Emerging Markets Business Unit headquarters in Singapore. This will help Takeda to better understand and meet the needs of Asian patients and consumers. Last year, Yamato Asia set up its Business Model Innovation Centre under its regional headquarters in Singapore. The Centre will perform regional market studies, business development and network development that are aligned with Yamato’s customers’ needs.

 

15. Second, Singapore possesses an ecosystem of industry partners that can work with Japanese companies to conduct research, improve business operations and develop innovative new products. For instance, few may know that the SK II brand is managed out of Singapore. Its new product extension, “SK II men”, was developed through working with Singapore’s consumer insight firms to derive insights on the Asian male perception of beauty. In another example, NEC led a consortium to participate in Singapore’s Safe City Test Bed in 2013. The test bed resulted in the successful development of new public safety solutions, and NEC’s Global Headquarters for its Public Safety business is now in Singapore.

 

16. There are also means for interested SMEs to find suitable partners. For instance, JETRO recently collaborated with SPRING Singapore to conduct the Velocity Accelerator in February 2016, resulting in two successful partnerships struck between participating companies.

 

 

17. As we celebrate fifty years of collaboration, Singapore and Japan should continue to leverage on each other’s strengths to tap on business opportunities, address regional trade and investment challenges, while exploring new technologies and services to serve societal needs.

 

18. I look forward to active discussions amongst the panellists and wish all participants a fruitful session ahead.

 

19. 皆様、ご清聴ありがとうございました。