Enhanced opportunities in trade, cross-border e-commerce, professional services and innovation for Singapore companies in Zhejiang, China
International Enterprise Singapore (IE Singapore) continues on its efforts to help Singapore companies gain access to Chinese markets and innovation ecosystems.
Following collaborations in Guangdong, Sichuan and Beijing, ways to drive more opportunities for Singapore companies in trade, cross-border e-commerce, professional services and innovation were discussed at the 12th Singapore-Zhejiang Economic and Trade Council (SZETC) meeting in Singapore today. The meeting was co-chaired by Ms. Sim Ann, Senior Minister of State (SMS), Ministry of Culture, Community and Youth & Ministry of Trade and Industry and Zhejiang Vice-Governor, Ms. Liang Liming. At the meeting, two project agreements were signed to deepen collaboration on BRI. The SZETC is supported by IE Singapore, the Secretariat for the Council.
Zhejiang province is known for its export-driven economy housing the world’s largest wholesale market for small commodities, and it is also home to many top Chinese private enterprises, including Alibaba, Geely and NetEase. The province has the fourth largest GDP in China at S$948 billion. In 2016, its GDP reached 7.5%, exceeding China’s national average of 6.7%. From January to September 2017, Singapore-Zhejiang bilateral trade grew 20% year-on-year to reach S$3.6 billion. As of June 2017, Singapore’s cumulative actual investment in Zhejiang reached S$7 billion with 1,178 projects.
Singapore companies including startups such as M-DAQ (FinTech) and Ninja Van (logistics) and large corporates such as Surbana Jurong (infrastructure) have been gaining headway in Zhejiang province. The Zhejiang ‘s efforts to improve economic competitiveness by pushing services development and economic reforms in line with China’s Belt and Road (BRI) Initiative are expected to drive more trade flows and opportunities in professional services, cross-border e-commerce and innovation.
SMS Sim said, “Zhejiang, with its vibrant private sector, is at the forefront of economic reforms and innovation in China. As key nodes pushing China’s Belt and Road Initiative, Singapore and Zhejiang can partner in trade, professional services, crossborder e-commerce and innovation, especially with the development of Zhejiang (Zhoushan) Free Trade Zone. Singapore companies’ expertise and networks in IE Singapore Media Release 1 December 2017 Page 2 of 8 Southeast Asia also complement Zhejiang enterprises’ internationalisation in the region.” (Please see Annex 2 for SMS Sim’s speech.)
Trade and professional services
Launched in April, the Zhejiang (Zhoushan) Free Trade Zone (FTZ) aims to be an internationally competitive integrated base for resources and will strongly boost trade flows. Zhoushan has the largest oil and coal import and export port in East China. This brings new opportunities for oil and petrochemicals commodity trading and provision of services such as bunkering and risk management. As a key oil trade and financing hub in the region, Singapore companies across the trade value chain are well-positioned to partner Zhejiang FTZ.
Internationalisation of Zhejiang enterprises
Singapore, being a global financial and trading hub, with its strong connectivity and knowledge of Southeast Asia, can partner Zhejiang enterprises to expand in the region. IE Singapore is working with China Zhejiang Centre (Singapore) to facilitate Singapore-Zhejiang partnerships to boost trade between Zhejiang and Southeast Asia through Singapore. China’s announcement on its third batch of FTZs include Chongqing, Henan, Hubei, Liaoning, Shaanxi, Sichuan and Zhejiang. As of June 2017, 179 Zhejiang enterprises have set up in Singapore, with investments totalling S$3 billion.
Zhejiang houses the China (Hangzhou) Cross-Border E-Commerce Pilot Zone, the nation’s first comprehensive pilot zone for cross-border e-commerce. Zhejiang is at the forefront of innovative e-commerce services such as customs clearances and ecommerce transactions.
Singapore companies’ strengths in the e-commerce value chain and networks in Southeast Asia complement Zhejiang’s interests to expand into the region. For example, Ninja Van, a last-mile logistics company, has partnered several Zhejiang companies to pilot its new cross-border logistics services in Southeast Asia. Broadening its business segments beyond last-mile fulfilment, Ninja Van has developed end-to-end cross-border solutions for Chinese merchants keen to list their products on e-marketplaces in Southeast Asia, while providing cross-border logistics services for these China outbound parcels to reach consumers in the region.
Zhejiang has a vibrant innovation scene, adding to its strong e-commerce ecosystem. Singapore companies can tap Zhejiang as an innovation hub to collaborate with Zhejiang companies on innovation.
Venturecraft’s incubator in Singapore-Hangzhou Science & Technology Park (SHSTP) has facilitated several Singapore start-ups to innovate and expand beyond Zhejiang to the rest of China. Venturecraft is a private investment group and venture capital platform. It has committed over S$300 million to invest in Singapore companies with strong intellectual property and high potential for commercialisation.
One example is BeMyGuest, an online travel platform providing travel activities and tours in Asia. It set up its first presence in China in Venturecraft’s incubator, partnering Ctrip. With this collaboration, BeMyGuest has seen a tenfold growth in bookings.