S'pore can benefit from China's restructuring

PHOTO: S'pore can benefit from China's restructuring

SINGAPORE - Singapore firms, particularly those in the services and consumer goods sectors, can benefit from China's economic restructuring, said Trade and Industry Minister Lim Hng Kiang.

Mr Lim told Parliament in a written reply submitted on Monday that stronger demand from China will have benefits here.

As China urbanises, Singapore's expertise in housing, transport, water and waste management solutions will be in demand, he noted.

The fast-growing, affluent and middle-class Chinese population will also spur spending in the food and beverage, retail, logistics, health-care and education industries.

More Chinese firms may also use Singapore as a springboard to expansion across South-east Asia, said Mr Lim, who was replying to a question from Nominated MP Tan Su Shan.

In a quest for more sustainable growth, the Chinese government has been making moves to shift the country's economy from an export-led and investment-oriented growth model towards one driven by consumption.

As a result, growth in the Chinese economy has been slowing - from 9.3 per cent in 2011, to 7.8 per cent last year, and further to 7.6 per cent in the first half of this year.

Mr Lim added that as China's slowdown is expected to be gradual, the impact on Singapore's exports and tourist arrivals "should remain limited".

"As our export and tourist source markets are fairly diversified, a gradual pick-up in the growth of other markets such as the United States would help to cushion the impact of a gradual slowdown of the Chinese economy."

Barclays economist Leong Wai Ho said a more moderate growth path for China will benefit Singapore in the longer term, "if it means China is going to deliver more sustainable and higher quality growth".

Get a copy of The Straits Times or go to straitstimes.com for more stories.