SPEECH BY MR
LIM HNG KIANG,MINISTER FOR TRADE AND INDUSTRY, AT THE EUROPEAN
CHAMBER OF COMMERCE EUROPE DAY LUNCH, 9 MAY 2008, 2.00 PM AT HILTON
HOTEL
Your Excellency Holger
Standertskjöld, Ambassador and Head of the Delegation of the
European Commission to Singapore
Mr Joachim Ihrcke, President of
EuroCham
Distinguished
Guests
Ladies and
Gentlemen
INTRODUCTION
It is an honour for me to join you here this afternoon to
celebrate Europe
Day.
European integration has changed the face of Europe. What
started with freedom from quotas and customs duties has now
progressed into a common currency. We know that today, the euro is
not just a tangible symbol of European integration; it plays an
increasingly important role in supporting the stability of the
global financial system.
WHY EUROPE MATTERS TO
SINGAPORE
In this era of globalisation, the future direction
that Europe chooses will have a profound impact on Singapore and on
the rest of the world. Singapore and the countries of Europe are
closely inter-connected.The EU is Singapore’s second largest
trading partner, after Malaysia. Last year, our
bilateraltradestoodatanall-timehighof $97.5 billion, an increase of
6.3 per cent from 2006. Europe is also our largest source of
foreign direct
investment.
More than 7,000 European companies have established a
presence in Singapore. These companies committed $8.4 billion or
more than half of the total manufacturing investment we attracted
last year. We are glad that increasingly, European companies have
recognised the relevance of Singapore in their Asian strategies.
Alongside these strong commercial links, there is also a rich
network of connections throughout many sectors including in science
and technology, innovation, education and the arts.
This afternoon, I would like to speak on how we can create
more opportunities for economic collaboration between Europe and
Singapore.
CREATING OPPORTUNITIES FOR ECONOMIC
COLLABORATION BETWEEN EUROPE AND
SINGAPORE
Although the US financial turmoil is casting a shadow on
the global economy, we are optimistic about Asia’s economic
prospects. Asian economies continue to remain vibrant. China and
India – the region’s growth locomotives – are expected to maintain
their growth momentum.ASEAN integration has taken a significant
step forward with the signing of the ASEAN Charter and the ASEAN
Economic Community Blueprint in November 2007.To keep our economy
competitive, Singapore has adopted a four-pronged strategy.First,
we grow our market share in our areas of strength; second, explore
new growth opportunities; third, entrench the spirit of innovation
throughout the economy, and fourth, build more economic bridges.
Let me expand on these strategies and, more importantly, illustrate
how they provide opportunities for economic collaboration between
Europe and Singapore.
(A) Strengthening our engine of
growth – Manufacturing
First, we are strengthening the manufacturing sector, a key
pillar of Singapore’s economy and our engine of growth.
Manufacturing contributes about a quarter of Singapore’s GDP, and
our goal is to double manufacturing output to $300 billion by 2018.
We are growing our existing capabilities in the electronics,
chemicals, biomedical sciences, and precision engineering sectors.
Let me illustrate by going through two key clusters that I see
potential for collaboration between Singapore and
Europe.
i. Transport Engineering –
Aerospace
The first cluster is transport engineering. Singapore’s
transport engineering sector comprises the aerospace, land
transport industries, as well as marine and offshore engineering.
Among these sub-sectors, we have set our targets on growing the air
transport sector, because we are located in the fastest growing air
travel market in the world. In 2007, Singapore’s aerospace industry
achieved a record output of $6.9 billion. Today, our aerospace
industry has grown to encompass a broad spectrum of activities,
spanning air hub, maintenance, repair and overhaul (MRO), design,
manufacturing and aviation services. We have now set our sights on
moving up the industry’s value chain, beyond MRO to engineering,
assembly, as well as Research and Design.
The investments in services and facilities brought into
Singapore as a result of the recent Singapore Airshow represent an
important step in this direction. Major global aerospace players
such as EADS, Rolls-Royce, Thales and Safran have already chosen
Singapore to base their manufacturing, R&D and engineering
activities. Our well-educated workforce, coupled with the strong
links among our defence research agencies, universities, research
institutes and industries, makes us a natural choice for aerospace
companies to hub their activities. In February this year,
Rolls-Royce set up its Aero-Engine Assembly and Test Facility in
Singapore – a first for Asia. As the regional aviation hub,
Singapore’s aerospace cluster is a vibrant and dynamic one.
Therefore, I strongly encourage more European aerospace and
transport engineering companies to consider Singapore as the
location to base their
activities.
ii. Biomedical Sciences
(BMS)
The second cluster is biomedical sciences, or BMS for
short. In the seven years since we embarked on developing the BMS
sector, manufacturing output has almost quadrupled in size. Today,
BMS manufacturing accounts for 5.5 per cent of Singapore’s GDP. As
one of the key strategic manufacturing sites of the BMS industry,
Singapore currently hosts six of the top ten pharmaceutical
conglomerates’ manufacturing facilities and a growing base of
medical technology companies within the TuasBiomedicalPark.
We are actively creating an optimal environment where
companies can connect to a myriad of research and commercial
opportunities. Our location in the heart of Asia, good research
infrastructure and strong focus on the industrial application of
research provide the ideal platform for European companies looking
for a site to serve Asian markets. We are already home to some of
the world’s leading biomedical sciences giants such as Novartis. I
look forward to seeing more partnerships between European and
Singaporean companies in this promising
cluster.
(B) Exploring New Growth Areas –
Clean
Energy
Our second strategy is to explore new growth
areas. A key thrust is to grow the clean energy sector. Apart from
providing a key resource, the energy sector also presents
significant economic opportunities. Europe is a world leader in
clean energy, and has developed cutting edge technology in this
cluster. We are therefore keen to partner European companies to
further develop a comprehensive clean energy cluster in
Singapore.
To date, we have already successfully attracted
several major investments in clean energy from Europe.In October
last year, Norway’s Renewable Energy Corporation (REC) announced a
$6.3 billion investment to establish what is envisaged to be the
world’s largest solar manufacturing complex in Singapore. In
January this year, Neste Oil decided to invest $1.2 billion in
building a plant here to produce the world’s cleanest renewable
diesel NExBTL, a premium-quality fuel which outperforms
conventional fossil diesel fuel.With our strong R&D
capabilities and skilled talent, we offer European companies in the
clean energy business an attractive investment location for them to
hub their activities.I am confident we will be able to find new
collaborative projects in this
sector.
(C) Entrenching the Spirit of
Innovation
Going forward, we also want Singapore to be the place where
great ideas bloom and breakthroughs happen, where new technologies
are first implemented and new knowledge created. Therefore, our
third strategy is to entrench the spirit of innovation and R&D.
The Singapore government will increase our overall research
spending to $7.5 billion per annum by 2010, or 3 per cent of our
GDP. Our R&D funds will be directed at areas such as
environmental and water technologies, interactive and digital
media, and life sciences. By doing so, we hope to be an attractive
location for companies to base their R&D
centres.
I understand that the EU has also set itself the target of
being the most competitive and dynamic knowledge-based economy in
the world by 2010. European companies invest heavily in R&D,
and this commitment to constant research and innovation has enabled
European companies to produce premium goods with a reputation for
quality. Singapore shares the EU’s belief in the value of research
and innovation. We have been involved in projects organised by the
European Commission under the Framework Programme for Research and
Technological Development.
Increasingly, European companies are basing their R&D
centres in Singapore. Earlier this year, Oerlikon Solar, a
world-leading supplier of equipment for making solar cells, based
in Switzerland, chose Singapore as the location for its Asian hub
for manufacturing and R&D. This project is Oerlikon’s first
facility in Asia that will develop, assemble and test its advanced
solar cell equipment. EADS also signed a partnership agreement with
A*STAR to investigate and develop research projects in aerospace
technologies. The strong pipeline of investments by European
companies into our R&D sector clearly indicates that R&D is
another area in which Singapore and the EU can explore
collaboration
opportunities.
(D) Building Economic Bridges and
Growing Our External
Wing
Beyond developing our strategic clusters, we are also
expanding our economic space through deepening our presence in
existing markets, and building economic bridges with key trading
partners like the EU, US, China and India. With our extensive
network of FTAs, businesses in Singapore will find it easy to trade
with and invest around the world.
Singapore is also committed to building links between ASEAN and the
EU.The ASEAN-EU FTA, launched last year, will further enhance the
strong cooperation and close economic ties between our two regions.
Since then, progress has been made in setting out the framework of
this FTA. Nevertheless, as the EU is our second largest trading
partner, we see scope within the framework of the regional ASEAN-EU
FTA for Singapore and the EU to pursue deeper bilateral trade
liberalisation. We expect an EU-Singapore FTA to bring about
benefits such as tariff concessions, preferential access, IP
protection and faster market entry for EU companies. I know that we
have some very influential businessmen in the room today, and I
look to you to bring the business case for an EU-Singapore FTA to
your governments and the European Commission.
CONCLUSION
In summary, I have shared with you my thoughts on how,
amidst the global financial uncertainty, Singapore and Europe can
further our relationship in a mutually beneficial way. We share
many interest areas in manufacturing and R&D, and these offer a
wealth of opportunities for further collaboration.
9 May is a festive day for the EU. Thanks to the good work
of EuroCham and the EC Delegation in Singapore, our bilateral
relations with the EU have grown from strength to strength. I look
forward to seeing further opportunities for collaboration emerge.
On this note, I would like to wish everyone here a Happy Europe
Day.
Thank
you.