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Tuesday, November 18, 2003

Future past

The emergence of the Chinese market has been nothing short of phenomenal.

Once you recognize that China and Hong Kong should be rightly treated as one market, the Chinese market becomes the largest market for Taiwan, S Korea and Singapore exports ... by far.

For SE-Asian countries Malaysia, Thailand and Philippines, China is the number 3 market.

The thing is, speed. Last year, S’pore’s exports to China/HK was about the same amount as S’pore’s exports to the US. This year, S’pore’s exports to China exceed the US by a fifth!

At this rate, S’pore’s exports to China will be twice its exports to the US in another 2 years.

The other thing is, change. Exports to China aren’t benefiting S’pore manufacturers as much as exports to the U.S. used to. China is forcing S’pore back to its historic role as an entrepot port. More than half of S’pore’s exports to China are re-exports.

This role is 2 ways. Not just to China, but from China - as the second article below illustrates. Here, Singapore’s multi-lingual society is its advantage, with a little help from trade tensions brewing between the U.S. and China!

Looks like the middle-man is where the City-state will have to rediscover its new role.

China now S'pore's top export market

CHINA has eclipsed the United States to become Singapore's top export destination for the first time, a phenomenon becoming increasingly common for many Asian countries.

For the first nine months this year, Singapore's exports to China and Hong Kong, which redirects much of the exports to China, hit $30.6 billion, compared with the $24.8 billion to the US in the same period.

In a fillip for the all-important electronics sector, which accounts for a third of Singapore's manufacturing output, microchip exports to China almost doubled for the first nine months of this year, compared with the previous year.

However, economists cautioned against writing off the importance of the US just yet.

While there is little doubt that the fast-growing mainland economy is emerging as an engine of growth for many of Asia's export-oriented economies, the US remains the single-most important barometer of Singapore's economy, they said.

Much of what is exported to China is components for goods whose ultimate destination is the US, the economists pointed out ...
Straits Times

'Little America' That's how some China firms see Singapore

LIKE thousands of Chinese businessmen, Mr Feng Jun wants his burgeoning technology company to crack the lucrative US consumer market and to sell his product - hard disk drives - directly to Americans.

But for many in China's growing entrepreneurial class, selling to the West seems as difficult as mastering the tongue-twisting English language.

To make the leap, Mr Feng is taking a route increasingly popular among smaller Chinese companies - setting up an office in Singapore, possibly Asia's most Westernised city. Its base of 6,000 multinational companies has nourished Western and Asian influences for years.

'Singapore is like a 'Little America',' said Mr Feng, president of Beijing Huaqi Information and Digital Technology, China's largest digital storage device producer.

Some analysts say Chinese companies may use Singapore as a 'Trojan Horse' - a back-door channel for shipping to the United States as China's trade surplus mounts and as US lawmakers accuse Beijing of dragging its feet on opening up its markets.

Tapping Singapore's official English and Chinese languages, recent free trade deals, and building on links with its predominantly ethnic Chinese population, many mainland companies are seeking a Singapore address.

This year, about 250 Chinese companies operate on the island, according to the Economic Development Board, a 56-per-cent increase from 160 last year...
Straits Times

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