SINGAPORE, Dec. 25 (Xinhua) -- As 2025 marks the 35th year of diplomatic relations between China and Singapore, the Annual Development Report on Chinese Enterprises in Singapore (2024-2025) (hereinafter referred to as the Report) outlines the latest trends amid shifting geopolitics. Jointly released by the Chinese Enterprises Association (Singapore) and KPMG based on surveys of 510 companies, the Report identifies five key characteristics: high business environment recognition, cautious investment optimism, deepened local contribution, transformation amidst challenges, and accelerated layout in emerging sectors.
These trends signal a shift from early expansion to a new phase of high-quality growth characterized by capability export and ecological co-construction.
From "springboard" to "regional headquarters hub"
Fifty-five percent of Chinese enterprises rate Singapore's business environment as "excellent," citing public services and the financial system as key attractions. This confidence mirrors Singapore's economic resilience, with 4.4 percent GDP growth in 2024. As the ecosystem matures, strategic positioning has upgraded; China remains Singapore's largest trading partner for 12 consecutive years. In 2024, direct investment in high-value fields like ICT and finance surged, solidifying Singapore as a "central node" for capital and compliance. Chinese banks and professional firms are increasingly using Singapore as a pivot to access global markets, reinforcing its status as a regional headquarters hub.
"Singapore+1": reshaping regional layouts
With 37 percent of enterprises planning to expand in Singapore and 40 percent in Southeast Asia, the "Singapore+1" model is vital for supply chain resilience under RCEP. In manufacturing, the "headquarters + regional base" model is gaining traction; over 70 percent of firms view the Johor-Singapore Special Economic Zone (JS-SEZ) as a key hinterland for capacity expansion and cost management. Companies are leveraging Johor for production while retaining management in Singapore. Similarly, in logistics, collaboration between Chinese firms and local leaders is enhancing regional synergy and transit efficiency.
Deep localization: from product output to innovation fusion
With 45 percent of enterprises boasting a local workforce over 60 percent and a similar share contributing to local innovation, Chinese firms are deeply integrating into Singapore's socio-economic fabric. Consumer companies are localizing products for differentiation, while tech firms in autonomous driving and digital platforms collaborate with local partners to drive talent transformation. This approach reflects a dual value of "technology + responsibility," advancing technology export alongside business model innovation.
Challenges drive upgrades: improving efficiency in high-cost environment
Significant challenges persist: 74 percent of firms cite intense competition, 71 percent high costs, and 59 percent talent shortages. These pressures are compelling a transformation toward higher efficiency. To address constraints, companies are accelerating digitalization and automation. Talent strategies are shifting towards building long-term capabilities through mixed local-global recruitment and establishing regional training centers to create a self-sustaining talent ecosystem.
Accelerating new tracks: green and digital drives
Guided by Singapore's "Smart Nation" and "Green Plan 2030," enterprises are expanding into green energy, AI, and biomedicine. Projects in new energy and digital finance are establishing a regional foothold. Chinese tech firms are driving regional digital transformation via cloud computing and fintech, while biomedical companies leverage Singapore's regulatory advantages to pursue a strategy of "R&D in Singapore, manufacturing in the region, and marketing globally."
Overall, the 2024-2025 Report outlines a shift from scale-driven to capability-driven development. At the 35th anniversary of diplomatic ties, Chinese enterprises -- supported by green foundations, digital engines, and regional synergy -- are injecting long-term momentum into China-Singapore economic cooperation. (Contributed by Liu Chuntao)
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