Oral reply to PQ on SMEs based in China

Questions

Mr Saktiandi Supaat: To ask the Minister for Trade and Industry (a) how many factories run by local SME businesses are currently based in China, namely Hubei, Zhejiang, Henan and Guangdong; (b) whether the Ministry foresees a need to relocate these factories for the businesses' long-term survival and to address supply chain changes; and (c) for SME businesses that wish to move their operations, whether any assistance is available to them.

Oral Answer by Senior Minister of State for Trade and Industry Mr Chee Hong Tat

1. Mr Speaker, Sir, Mr Saktiandi filed this question earlier. The global situation has now changed and the provinces in China mentioned in his question are no longer the places with the highest number of newly infected cases. Nevertheless, the essence of the question is still relevant as the principles and approach that we take can also apply to investments in other countries.

2. Sir, MTI does not have data on the number of factories our SMEs set up overseas. Singapore’s Direct Investment Abroad (DIA) across Hubei, Zhejiang, Henan and Guangdong contributes about 17% of our total DIA in China.

3. The situation in China is stabilising with a progressive return to normalcy. Across China, many companies have gradually resumed their operations. A survey conducted in late-February by the Singapore Chamber of Commerce and Industry in China (SingCham) showed that around 70% of Singapore companies had started resuming operations. We can expect this figure to rise as the situation in China gradually improves. For example, data from mid-March showed that around 80% of Chinese workers have returned to work from their hometowns. The PRC Ministry of Commerce has also introduced measures to support foreign companies, including expediting license approvals and resolving labour shortages.

4. Whether Singapore SMEs based in these four Chinese provinces will relocate their factories is a commercial decision that they have to make. Businesses regularly review their markets and supply chains. Given the size and growth potential of China’s economy, many businesses are likely to see continued value in keeping some production capabilities close to their final demand markets in China.

5. SMEs that seek to relocate operations may tap on the Enterprise Financing Scheme (EFS) to purchase equipment, machines, and business premises. SMEs looking to explore new markets may also benefit from Enterprise Singapore’s network of Overseas Centres, the enhanced Market Readiness Assistance (MRA) grant as well as the Singapore Business Federation’s advisory services on internationalisation.