Inland regions are opening up, business forum told

DEVELOPMENT is spreading wave-like across China, beginning in Beijing or Shanghai 10 years ago and has now reached second-tier cities, a business exchange forum was told yesterday.

Minister of State for Trade and Industry Lee Yi Shyan told the inaugural Business Exchange Forum organised by Business China and Nanyang Business School that there are opportunities for Singapore businesses in Chinese cities further inland, and thus less well developed.

He said as the inland regions grow with the influx of infrastructural investment by the Chinese government, Singapore companies should take advantage of opportunities, especially in the modern services industry such as creative advertising and design, education and training.

Mr Lee has just returned from business missions to cities in Jiangsu and Hubei provinces as well as Chongqing municipality.

Although second-tier cities are now caught up in the wave of development that started in Beijing or Shanghai, he acknowledged three areas of concern that have to be considered.

Firstly, even though labour costs may be lower, transportation costs would continue to be higher further inland until sufficient infrastructure is available.

Secondly, the necessary skills may be lacking for certain industries – hence the need for the local education curriculum to keep up with the demands of industries.

Lastly, local authorities need to put in place policies that aid and attract businesses to the city.

During his visit, Mr Lee met Chinese officials eager for developments similar to the Suzhou Industrial Park. However, Mr Lee said the private sector should take the lead in such projects, albeit on a smaller scale, with government bodies playing an advisory role.

At the forum, attended by members of Business China and some 100 students of the Nanyang Executive MBA programme (EMBA) hailing from a wide spectrum of Chinese industries, MP Chan Soo Sen, director, Chairman’s Office, Keppel Corporation Ltd, reiterated the strength of the Singapore Brand in China and the necessity of relatively smaller Singapore companies to collaborate in the competitive Chinese market.

EMBA student Ru Sin, general manager, Jiangsu Guoxin Jingjiang Power Generation Co Ltd, shared that as China undergoes its “second phase of change” with a stronger local currency, higher wages and greater emphasis on the environment, Singapore companies should leverage on their areas of expertise, for example, in the biochemical, electronics, financial services and shipping industries. This means providing higher value-added products and services.

The forum is an association set up to forge closer cultural and economic ties between China and Singapore.

Courtesy of The Business Times, May 01, 2008

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