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Straits Times
20-05-2025
- Business
- Straits Times
Singapore SMEs need to partner Chinese firms for access to their supply chains, says Asme
Asme president Ang Yuit noted that Singapore firms have yet to meet competition at the level of intensity posed by the Chinese. ST PHOTO: GAVIN FOO Singapore SMEs need to partner Chinese firms for access to their supply chains, says Asme SINGAPORE – The recent influx of Chinese investments into Singapore – some coming with home-town suppliers in tow – is putting the squeeze on small and medium-sized businesses here. To avoid being flattened out, the Association of Small and Medium Enterprises (Asme) is urging local players to get into the Chinese supply chains, and to find growth overseas. In a media briefing on May 20 to address business concerns sparked by the trade war, Asme's president Ang Yuit noted that Singapore firms, despite having witnessed foreign investors come in from around the world, have yet to meet competition at the level of intensity posed by the Chinese. He said: 'When they come in, they bring a long, whole supply chain. That's very distinctive to the Chinese... They have a whole manufacturing base all the way to China.' 'It isn't that they don't try to integrate, but there's language, there's the speed at which they do things. They move very fast, and Singapore companies are much slower,' he added. The heat is turned up by some of these investors who are willing to trade losses for market share, or brook losses for the chance to diversify capital outside China, said Mr Ang. He added: 'They are not looking at making money in the first two, three years. They are investors, so they're willing to spend a lot more to outlive you.' Chinese firms have been raising stakes here in recent years, led by geopolitics and enhancements to the China-Singapore Free Trade Agreement completed in 2023. China's Ministry of Commerce noted that in 2018, cumulative investment from China in Singapore was US$50 billion. By 2022 , it had risen almost 1½ times to US$73.5 billion. To help local players, Asme will study opportunities for local firms to enter into partnerships with Chinese businesses in China that have yet to reach global scale. This will give local firms a chance to partner and learn from them, and potentially give them a foot in the Chinese supply chain. The association, which has over 7,000 members, is also stepping up its outreach to peers in the region to promote links. It has gone on a trade mission to Taiwan with SME Malaysia, and is hoping to engage its Indonesia equivalent next. As the Government reviews measures to help local businesses against the impact of the US tariffs, Mr Ang hopes perennial business challenges such as high rental costs would also be evaluated. With policymakers believing that the world has entered a new anti-trade era, the organisation is also urging the Government to tilt towards protecting local SMEs. Mr Ang said: 'Very often, because we signed free trade agreements, we cannot be seen to subsidise the operating expenditure of our companies, or cannot have preferential treatment of the companies. But in this new global order, does it make more sense to show a bit of preference for local companies?' He cited the example of a SME being eligible for government funding to help it expand overseas as long as it meets 30 per cent local shareholding. That criterion can be met by a Chinese citizen holding permanent resident status. The applicant may be a large company in China, operating a small outfit in Singapore, tapping the government grant, he said. Mr Ang also hopes the Government looks beyond traditional economic metrics to preserve SMEs, which account for 99 per cent of Singapore's 300,000 enterprises and 70 per cent of employment. While the influx of Chinese investments may look good on paper, they may erode the foundation of Singapore's economy, he said. He added: 'In the short run, you may see that overall, FDI (foreign direct investment) is doing well, but in the medium term, our ecosystems get replaced by Chinese ecosystems.' He noted that local SMEs may bear the main brunt of criticisms for inefficiency, but they maintain the base on which Singapore unicorns and bigger enterprises are built. He said: 'SMEs are the bedrock that sustains the economy. It's important that we keep this segment well taken care of.' Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
01-05-2025
- Business
- Business Times
US tariffs provide opportunities for Greenlink Digital Bank: chairman
[SINGAPORE] The continued uncertainty with US tariffs could provide more opportunities rather than challenges to Greenlink Digital Bank (GLDB). GLDB chairman Geng Jing believes that the tariffs could spur deeper cooperation and trade between South-east Asia countries, as well as China. 'Tariffs will likely not have a short-term impact but a medium- to long-term one,' he told The Business Times. The bank aims to leverage the recently signed Further Upgrade Protocol to the China-Singapore Free Trade Agreement. Singapore is a bridge between China and the rest of South-east Asia, and this is a chance for GLDB to reach out to the rest of the region via the Republic. Beyond just South-east Asia, GLDB has also courted customers in India. GLDB's deposits currently stand at about S$806 million, from customers beyond just Singapore, but also from markets including Hong Kong, Australia and New Zealand. The bank's loan book has now hit about S$495 million, with loans not just to Singapore companies, but also to those in China, Australia, India, Canada and US. This is due to its supply chain financing business, which offers financing for suppliers to be paid before their buyers pay them after the goods are delivered. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up GLDB currently serves about 70 per cent of Singapore's small and medium-sized enterprises (SMEs). These SMEs are feeling the short-term impact from the US tariffs, with customers in the US ordering less, noted Geng. 'The worst we've heard is that the goods are already on the way and tariffs were raised, and the goods do not have a customer anymore,' he added. So far, GLDB's supply chain financing business, where the bank serves as co-buyer to facilitate cashflows, has no American exposure. These customers are mostly in Singapore, Malaysia and Indonesia. Excluding the SME customers who export electronics to the US, by and large most of GLDB's customers are largely unaffected by the US tariffs. The bank will continue to strengthen its supply chain financing ecosystem to serve SMEs. Looking ahead, GLDB is still on track to break even in FY2025, having swung into the black in the fourth quarter of 2024, said Geng. Its latest FY2024 results saw revenue surge to S$47.8 million from S$8.7 million in FY2023, and losses narrowing to S$5.1 million in FY2024 from S$29.7 million in FY2023. The bank is targeting a public listing on the Singapore Exchange by 2027 or 2028, making 2025 a pivotal year to break even before initial public offering preparations begin. Besides breaking even, GLDB is also looking for strategic investors who can add value. There are already ongoing discussions with potential investors, with GLDB aiming to choose between three and five strategic investors in the next 12 months. The bank is also looking to grow its blockchain solution for supply chain financing. In 2024, it built a digital trading token that can reduce time and cost. This could also ensure there is no 'double dipping' by securing financing with assets that have already been collateralised. With the solution, the token will show who the buyer is and who will make the final payment, and enhance the wider banking system and safety. GLDB showed the solution to the Monetary Authority of Singapore last year as part of its Digital Payment Token (DPT) licence application. 'We hope to get the DPT licence to quickly grab the opportunity to grow this solution this year,' said Geng.
