Why Singapore Is Central to China’s Global Strategy

0:00 China's global playbook is evolving- to keep its competitive edge.

0:04 A decade ago, companies began diversifying production

0:07 beyond China into lower-cost countries like Vietnam, Cambodia, and Mexico.

0:12 That shift became known as, "China Plus One." But as supply

0:17 chains became more complex and global risks harder to predict,

0:20 that model evolved into something bigger:

0:23 "China Plus Many," a network of production spread across multiple countries,

0:28 designed to improve resilience.

0:30 And that strategy continues to evolve becoming less about where goods are made,

0:37 and more about where companies are managed, financed and scaled.

0:42 It started 2018 with the first Trump administration.

0:45 Back then companies were scrambling for solutions.

0:48 This intensified during Covid.

0:50 Rising labor costs, geopolitical tensions and uncertainty around U.S.-

0:55 China tariffs have forced companies to rethink their supply chains.

1:00 But diversification has its limits.

1:02 Many of the input materials still come from China

1:05 or the components they're just assembled somewhere else.

1:08 A good example here is Apple.

1:10 Apple has diversified its supply chains, its manufacturing,

1:13 its products in Vietnam, and now also India.

1:15 And then tariffs were levied on a lot of other countries.

1:19 Tariffs on Vietnam were quite high just last year.

1:23 As tariffs and trade pressures spread beyond China,

1:26 supply chain risks were no longer contained to a single country.

1:30 What we have seen now as part of the Trump

1:33 administration in the second term and more globally,

1:36 that companies were realizing, including Chinese companies,

1:39 the shock can come from many different directions.

1:42 So maybe a China plus one in the traditional sense is not the strategy to go.

1:48 In response, China is reworking its strategy and that's

1:51 pulling it closer to a longstanding partner: Singapore.

1:56 Singapore plays a very,

1:57 very important role because Singapore has the ability to sit at a table

2:00 with Washington and Beijing without being seen

2:04 as favoring either or, they are neutral.

2:07 In your Asia strategy.

2:09 If you do not have Singapore in there,

2:12 then I would question whether you have the right setup.

2:15 You need the country as your control tower in the region.

2:18 Everyone can do business here.

2:19 And this is something very important

2:21 to Chinese companies and Chinese investment.

2:23 When you look at the fixed asset investment into Singapore,

2:27 the Chinese fixed asset investment rose from 2.5%

2:32 in 2024 to 20.6% in 2025, right.

2:35 That's an eight-fold increase.

2:37 At the same time, American investment went back.

2:40 China has been Singapore's largest trading partner since 2013.

2:45 Under their free trade agreement,

2:47 95% of Singapore's exports to China are tariff-free.

2:51 The relationship runs both ways.

2:53 Singapore became China's largest source of newly

2:56 committed foreign investment in 2022, overtaking Japan.

3:00 In 2024, Singapore invested around $10.7 billion US into China,

3:07 while Chinese firms invested nearly $11.8 billion into Singapore.

3:13 Singapore is sort of like the first stop to explore the broader Asian market.

3:18 It can be from the very simple things

3:22 of the rule of law in Singapore governance where Chinese companies

3:27 are realizing that if we want to be competitive

3:29 globally it's actually an asset in terms of corporate strategy,

3:33 treasury functions and also as a platform to raise capital.

3:38 It is a safe place to have your investments

3:41 and deploy them from here into other markets in the region,

3:44 this is why Singapore is the largest investor in countries like Vietnam, India.

3:50 All this investment comes here from Singapore,

3:52 but it doesn't come necessarily from Singaporean companies,

3:56 but from MNC's headquartered here.

3:58 Today, around 8,500 Chinese enterprises operate in Singapore.

4:02 Early waves of investment focused on trade and infrastructure,

4:07 but the latest wave is different.

4:09 It's increasingly driven by tech companies drawn by Singapore's AI ambitions,

4:14 deep talent pool and access to global capital.

4:17 Chinese tech giants like Huawei,

4:20 Tencent and Alibaba have established R&D centers here,

4:24 while firms like Bytedance,

4:25 Shein and Manus AI have shifted their international operations

4:29 to Singapore to access global funding and recruit beyond China's borders.

4:35 The timing is no coincidence.

4:37 Southeast Asia's fast growing middle class,

4:40 spanning close to 700 million people across Indonesia,

4:44 Malaysia, Vietnam, and beyond,

4:46 is becoming one of the world's most coveted consumer markets.

4:50 Singapore is an important center for finance and growth in Southeast Asia.

4:55 If you pursue a multi-market expansion strategy,

4:58 then it just needs to be coordinated from here.

5:02 Think about the size of Indonesia and Malaysia combined.

5:06 Of course, you could export everything to this part of the world,

5:10 but China understands that is not sustainable.

5:13 At the end of the day, you need to have localized production.

5:16 As global markets fragment, China isn't stepping back.

5:20 It's adapting- by doubling down on self-reliance

5:23 while remaining integrated with the global economy.

5:27 Investment into China doesn't just come from Europe or the United States.

5:31 We see investment from Southeast Asia into China,

5:34 from the Gulf and the Middle East, from South America.

5:38 China still is the anchor for the value chains.

5:41 China now is competing head-on in areas

5:44 where Europe traditionally speaking was the leader.

5:47 In the past, we saw technology transfer from the west to the east, right?

5:54 So, the question now is can we see

5:57 technology transfer from the east to the west?