Singapore firms ready to tap improving China-Taiwan trade ties

Taiwan’s already-huge investments in China are set to expand even more, now that the two of them have signed an agreement on economic cooperation, Business Times Singapore reported.

Nowhere is this going to be more evident than in China's southern province of Fujian, just across the Taiwan Straits. And Singapore is set for sizeable spin-offs.

Of course, Singapore is far from the action. But there are plenty of Singapore companies – with more expected – In Fujian. And they can quickly seize any new opportunity that come knocking as a result of the latest China-Taiwan pact.

Singapore logistics player YCH, which has an operation in Xiamen in Fujian, is already tapping the bustling electronics sector across the Taiwan Straits.

“Many of our world-class electronic, high-tech and manufacturing customers and suppliers are based in south China and Taiwan,” says Koh Yong Seng, director of YCH Group's China operations and general manager of YCH Xiamen.

Cai Shuo, vice-president for development and China growth at Pan Pacific Hotels Group, said: “With Fujian's well-developed business, financial and transport infrastructure, we see huge potential incremental business growth. This, coupled with continued improvement of cross-Strait relations, has made it a natural region to grow our portfolio.”

Chinese economic planners have nominated Fujian province as a showcase for cross-straits exchanges and cooperation, according to Law Chung Ming, regional director for south China at International Enterprise (IE) Singapore.

“The plan calls for Fujian to become the economic hub that connects the two existing powerhouses of the Yangtze and Pearl River deltas to become a base for advanced manufacturing,” he said.

Beijing's plan for an economic zone off the west coast of the Taiwan Straits will make Fujian more attractive for investments. For a start, its financial sector is set for a boost from the presence of Taiwanese financial houses, which will be given priority to set up shop there.

Construction work on highways and railways have been accelerated to link Fujian to neighbouring provinces, opening up the province and its ports more to the outside world.

Law said that Singapore has strong historical, cultural and economic links with Fujian province – and these should give the city-state a head-start there.

Trade between Singapore and Fujian totalled almost US$1.4 billion last year - and jumped 49 percent in the first four months of this year to US$509 million.

As at end-April 2010, Singapore companies had pumped $3.06 billion into 1,370 projects in the province. Most of these investments are in light manufacturing, transport and logistics, real estate and services in business, lifestyle and tourism.

Law sees room for more Singapore companies to venture into Fujian, especially in transport and logistics.
(Source:www.cargonewsasia.com)