Singapore companies can consider venturing into Chongqing for two main reasons: (i) its attractive central location; and (ii) fast urban growth. Both factors are set to drive more people – and thus, spending – into the municipality.
Chongqing has gained considerably from China's 2000 Go West strategy, which aimed to generate investment in western China. Today, the forecasted growth for West China, including Chongqing, is 10% to 12% annually through to 2020. Chongqing has a long history as a strategically important trading centre – in 1890, it was the first inland Chinese city to be opened up to foreigners19. Today, Chongqing's central location makes it an economic, manufacturing and transport hub; and one of the most important cities in the country. It is one of four directly controlled municipalities in China (apart from Tianjin, Shanghai and Beijing) that reports to the central government in Beijing rather than any regional government. Chongqing was chosen as a directly controlled municipality because of its size and economic importance, and to allow the central government to oversee the strategically vital Three Gorges Dam project.
With its strategic location, Chongqing is a key node of the Belt and Road Initiative. In terms of urban growth, the latest development is the Chongqing airport expansion, which will drive international connectivity, logistics and opportunities for global brands including Singaporean ones to enter. The airport extension aims to reach 50 million passengers annually and 1 million tonnes of cargo by 2020. It will have 52,000 sq m of commercial space with many duty-free opportunities in the areas of retail and F&B for Singapore companies to venture into. In 2016, Singapore and Chongqing signed an MOU to launch more flights between the two cities and Southeast Asia to boost regional connectivity. Since then, flights between Singapore and Chongqing have increased from 5 to 14 a week.
Enterprise Singapore facilitates commercial projects within the China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity (CCI).
Singapore companies can consider venturing into Guangdong for two main reasons: (i) its prime location in the booming Greater Bay Area; and (ii) the strong bilateral ties between Guangdong and Singapore.
Based on a report by KPMG China, Guangdong and the Greater Bay Area are one of the most economically open and market-oriented regions in China. The Greater Bay Area (GBA) Initiative is China's latest national strategy to combine the nine cities of Guangdong's Pearl River Delta with Hong Kong and Macau. It plans to create an economic region that rivals the San Francisco Bay Area, Greater New York or the Greater Tokyo Area. Industry players believe that cooperation rather than competition among the different cities in the GBA Initiative will further strengthen the already robust economic growth in the area25. Shenzhen, in particular, will be crucial with its advancements in technology, innovation and improved export-oriented infrastructure26. Singapore companies are encouraged to follow developments of the GBA Initiative closely and be exposed to the increasing opportunities there.
Singapore companies will also find it easier to enter Guangdong as both regions share strong ties. Bilateral trade between Singapore and Guangdong grew 10.3% year-on-year, reaching S$29.7 billion in 2017 and making the province Singapore's largest trading partner within China for the 29th consecutive year. As of end December 2017, Singapore's total cumulative actual investments in the province hit S$15.9 billion with 2,761 projects27.
Trade relations between the two continue to strengthen with the state-level bilateral cooperation project Sino-Singapore Guangzhou Knowledge City (SSGKC), which focuses on building innovation, modern services, smart cities and high technology sectors such as biomedical sciences. The SSGKC has registered more than 1,000 companies with a total capital of S$22 billion, and is strongly led by the private sector with government support28. Singapore companies can consider using the SSGKC, which has a robust and reliable ecosystem, as a gateway to access the GBA. Other significant platforms include CapitaLand's Datansha Medical Hub in Guangzhou and Mapletree Education Hub in Foshan.
Singapore companies across different sizes and sectors, ranging from SMEs to listed companies, continue to show great interest in Guangdong. Key sectors in Guangdong include modern services (F&B, education, healthcare, logistics), technology innovation (tech startups, edutech, medtech & biotech), integrated hubs by Ascendas-Singbridge, CapitaLand, Keppel Group, Mapletree Group and many more. Guangdong is a key province that attracts many SMEs to establish a presence in China, given the close proximity to Singapore and the common business ethics both cities share.
Enterprise Singapore has partnered with Ascendas-Singbridge to set up the Singapore Manufacturing Innovation Centre in the Sino-Singapore Guangzhou Knowledge City (SSGKC) to assist and connect industry players in both countries.
Enterprise Singapore is also working with the Intellectual Property Office of Singapore (IPOS) to develop an IP ecosystem in Guangdong using SSGKC as the pilot, and Singapore companies can be a part of this.
In addition, the Singapore-Guangdong Collaboration Council promotes exchanges and cooperation between business communities in Singapore and Guangdong.
27 Guangdong Bureau of Investment Promotion
Singapore companies can consider venturing into Jiangsu for two main reasons: (i) the strong partnership that Singapore has with Jiangsu; and (ii) the rise of innovation in the province.
Jiangsu has the highest amount of Singapore investments than any other province in China. Singapore has found a like-minded business partner in Jiangsu because of the province's active interest in attracting foreign investment. For example, in the 1990s, Jiangsu developed numerous zones with preferential policies and well-developed infrastructure for foreign investment. Over the years, Singapore's investments in Jiangsu have been in real estate, manufacturing, telecommunications equipment, transportation, storage and financial industries. In 2017, these cumulative investments in Jiangsu totalled S$36.8 billion.
Singapore's long-lasting and strong partnership with Jiangsu goes all the way back to 1994, when the China-Singapore Suzhou Industrial Park (Suzhou Industrial Park) was launched as the first government-to-government project between the two countries.
The Suzhou Industrial Park continues to evolve. Today, it encourages innovation and entrepreneurship and attracts high-tech industries, especially software-focused information technology and biotechnology industries. It has also been ranked the second-best industrial park in China and regularly tops developmental indices. Its GDP in 2016 was RMB215.06 billion (S$42.62 billion), with a 7.2% year-on-year growth29. Singapore professional services players can tap initiatives like the National-level Outbound Investment Platform in the Suzhou Industrial Park to provide support for Jiangsu companies.
Meanwhile, cities in Jiangsu such as Wuxi have undergone years of industrial upgrading and structural reform, and are advancing rapidly in innovation. High-tech companies such as Huawei and Alibaba are making considerable investments in Wuxi. Today, the city is home to projects related to integrated circuits and the Internet of Things (IOT).
At the 11th Singapore-Jiangsu Cooperation Council in November 2017, Singapore and Jiangsu discussed several key areas of collaboration including professional services, innovation and urban renewal.
The Singapore-Jiangsu Cooperation Council supported by Enterprise Singapore drives trade and investment opportunities between Jiangsu and Singapore.
Singapore companies can consider venturing into Zhejiang for two main reasons: (i) the province has a vibrant private sector that is at the forefront of economic reforms and innovation in China; and (ii) Zhejiang is one of China's most affluent provinces30.
Zhejiang has implemented many initiatives to embrace more private and international companies that can fire up its economy. For example, the Zhejiang (Zhoushan) Free Trade Zone, covering an area of 120 sq km, aims to be an internationally competitive base for oil resources and commodities trade. Ningbo-Zhoushan port is the world's largest port in terms of annual cargo throughput, at 1 billion tonnes in 2017.
Zhejiang is known as the cradle of China's e-commerce revolution, led by Alibaba and its related companies. Zhejiang houses the China (Hangzhou) Cross-Border E-Commerce Pilot Zone, the nation's first comprehensive pilot zone for cross-border e-commerce. Zhejiang is at the forefront of innovative e-commerce services such as "green lane" customs clearances and cross-border e-commerce transactions. Singapore companies' strengths in the e-commerce value chain and logistics networks in Southeast Asia complement Zhejiang's interests to expand into the region.
Singapore is working with Zhejiang to facilitate Singapore-Zhejiang partnerships and boost trade between Zhejiang and Southeast Asia through Singapore. As of June 2018, 191 Zhejiang enterprises have set up in Singapore, with investments totalling US$2.27 billion (S$3.12 billion). One example is Forchn Group, which established its international headquarters in Singapore to use Singapore as a springboard to Southeast Asia and the rest of the world.
The Singapore-Zhejiang Economic and Trade Council will drive more opportunities for Singapore companies in trade, cross-border e-commerce, professional services and innovation.
Enterprise Singapore is also working closely with China Zhejiang Centre (Singapore) to boost trade between Zhejiang and Southeast Asia through Singapore.
30 Zhejiang ranks 4th behind Shanghai, Beijing, and Tianjin in average per capita expenditure from 2013 – 2016.