Singapore becomes hub for Chinese tech amid US tensions

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Singapore becomes hub for Chinese tech amid US tensions

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A few of China’s largest expertise corporations are increasing operations in Singapore as tensions rise between Washington and Beijing.

Tencent and Alibaba are rising their presence within the metropolis state whereas TikTok proprietor ByteDance is reported to be investing billions of {dollars}.

Thought of impartial territory, Singapore has good ties to each the US and China.

Relations between Washington and Beijing are rising more and more hostile, notably over expertise.

Tencent introduced this week it was “increasing its enterprise presence in Singapore to assist our rising enterprise in South East Asia and past”.

The brand new regional workplace is described as a “strategic addition” to its present places of work in South East Asia.

Tencent’s WeChat messaging app is going through a ban this month within the US, together with TikTok, underneath the Trump administration’s clampdown on Chinese language apps and tech corporations.

Donald Trump has already imposed bans on Chinese language telecoms agency Huawei.

“Given the US-China tensions in tech and the heightening threat of decoupling, it is sensible for Chinese language tech firms to separate operations in China and outdoors of China,” stated Tommy Wu at Oxford Economics.

“Singapore can be an excellent location given town state’s comparative benefit in tech, its geographic proximity to China and as an innovation hub in South East Asia.”

Singapore has at all times been seen as a regional base for Western corporations due to its superior monetary and authorized system. Now it is firmly on the radar of Chinese language firms.

The political turmoil in Hong Kong and the introduction of China’s controversial nationwide safety regulation has seen many corporations search for a extra secure enterprise setting inside Asia.

Masking China

However there’s another excuse why Singapore is so engaging to China, in line with Nick Redfearn, deputy chief government at UK-based consultancy Rouse.

It may clarify why town state has attracted a lot international direct funding (FDI) in comparison with different South East Asia international locations he stated.

“This is actually because regional headquarters, working on behalf of father or mother firms, act because the international investor in international locations such because the Philippines, Indonesia, Vietnam and elsewhere.

“This may also help Chinese language firms keep away from the looks of Chinese language funding,” he stated.

South East Asia overtook the EU to grow to be China’s largest regional buying and selling associate in 2020, in line with Mr Redfearn.

International footprint

Rui Ma, a Chinese language tech knowledgeable and investor, added: “You have seen Western firms (Google, Fb, LinkedIn and lots of extra) make it their Asia Pacific headquarters for some time now, so it is pure Chinese language firms additionally contemplate it for a similar causes.

“I feel the latest US-China geopolitical tensions solely make it much more engaging, however that is not the one or major motive.”

She says globalisation is one other driving power. “If Western firms will be international, why cannot we?

“Chinese language firms are very a lot prepared to speculate for the long run and usually are not going to be content material to be left behind in terms of future alternatives.”

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