The Business Times
Seizing opportunities in the post-Covid-19 world
The pandemic has presented unprecedented challenges across the globe, but Singapore is well positioned to seize new growth opportunities in the Chinese market, as well as facilitate greater economic collaboration between China and Asean
For the first time in 11 years, the FutureChina Global Forum 2020 will be held virtually from today to Thursday. The theme for this virtual edition is “A Resilient Future: Post-Pandemic Transformation & Opportunities in China and ASEAN”. The forum will focus on the trends, growth opportunities and lessons drawn from China and Asean, as the regions continue their trajectory of recovery from the Covid-19 pandemic.
This highly-anticipated forum will feature a strong line-up of esteemed speakers from Singapore, China, Asean and beyond. Through the forum, participants will gain a deeper understanding of the latest developments and emerging trends, and companies will be better positioned to capture the business opportunities post-pandemic.
As the world continues to be gripped by the Covid-19 pandemic, US-China relations have further deteriorated, exacerbated by policy uncertainties in the lead-up to the November US election. The world economy is facing even greater headwinds post-Covid-19, to the extent that some have termed the outbreak as the Black Swan event of 2020. With globalisation in retreat amid Covid-19 and intensified US-China rivalry, there has never been more uncertainty as countries seek to reopen their economies and borders to pave the way for an eventual global economic recovery.
The June 2020 Global Economic Prospects published by the World Bank anticipated the 2020 global GDP to contract by 5.2 per cent due to the pandemic. South-east Asia has also been hit hard by the Covid-19 pandemic, with sluggish growth and contraction forecasted in markets such as Thailand, Philippines, Malaysia and Singapore.
Bright spots in Chinese market
As the pandemic tests the economic and political resilience of countries around the world, China has shown an impressive recovery and a stronger resolve to open up and transform its economy.
Following a deep economic plunge in Q1, China's economy rebounded to achieve a 3.2-per-cent growth in the second quarter. Specifically, the Chinese government has recently unveiled the “dual circulation” strategy, aiming to reduce its dependence on overseas markets and to boost domestic demand. Clearly, China is banking on its enormous market and the half-a-billion-strong growing middle class to support its consumer-led macroeconomic policies.
Chinese domestic consumption has been gaining momentum in the past few weeks, particularly in the globally hard-hit travel sector. In the Prominent Business Leaders Conversation titled “Future of Hospitality” organised by Business China last month, Ms Jane Sun, Board Member of Business China and CEO of Trip.com Group, shared that China’s hospitality industry is gradually recovering. According to the internal data of Trip.com, China’s domestic airline market and car rental industry has grown by 10 to 20 per cent, and 30 per cent respectively. She also noted that hotel occupancy is as high as 80 per cent.
Singapore’s unique advantages
On the other hand, Singapore as a small and open economy must rely on our nimbleness and resilience to thrive in the “new normal” as the world emerges from the pandemic. As evidenced by the 1997 Asian financial crisis and 2008 global financial crisis, our nimbleness and global connectivity enabled us to adapt quickly and recover sooner.
Whether the Covid-19 pandemic is a Black Swan event is debatable. The danger about the Black Swan rhetoric is that it makes an incident like the Covid-19 outbreak appear to be naturally unavoidable and uncommonly rare, and there is a high risk that we fail to prepare for the next crisis and repeat the mistake.
As companies struggle to bounce back and move gradually towards recovery, businesses that seize the opportunity to metamorphose will be more likely to survive and emerge victorious. If there is one lesson that governments, companies and individuals can draw from the pandemic, it would be the need to stay nimble and resilient, as well as to avoid falling victim to the “boiling frog syndrome”.
Reimagining the future
Covid-19 has brought along, or perhaps accelerated, some fundamental changes to the world. Protectionism and regionalism, economic stress and geopolitical shifts are testing the resilience of the current global trade and supply chain system, forcing companies to rethink and transform their current operations as they navigate and seize business opportunities in this new normal.
There is a Chinese saying: “A crisis is also a turning point” (转危为机). The Covid-19 pandemic is seen as an inflection point for the digitalisation and transformation of many sectors. Beyond the pandemic, business outlook remains optimistic with plenty of opportunities in the transport and logistics, medical services and food tech space, despite the economic challenges at present.
The medical sector appears to be a beacon of hope. Singapore’s pharmaceutical shipments rose 48.6 per cent in March over the same month last year, helping to lift overall non-oil domestic exports for the month. Online diagnostics service and telemedicine have also grown since the coronavirus outbreak. Globally, data suggests that the virtual healthcare market is expected to grow from US$2,262 million in 2019 to US$7,944 million by the end of 2025 at a Compound Annual Growth Rate (CAGR) of 23.28 per cent.
Accelerating the trend, the pandemic has compelled medical service providers to adopt state-of-the-art technologies such as 5G and incorporating Internet of Things (IoT) in diagnostics and treatment. In China, 620 million out of the 880 million mobile internet users are now using online and digital medical services.
In the transport and logistics industry, the need for contactless delivery, service suspension, inventory backlogs and disruption of the worldwide supply chain posed daunting challenges. However, many logistics companies were quick to explore unconventional approaches and adopt technologies including Artificial Intelligence (AI), IoT, and robotics to enhance efficiencies in their transport system. Digitalisation and automation will be the means to build smarter and more resilient supply chains, and this is where opportunities can be found.
New growth areas
Singapore has always been lauded globally for its trusted brand. A good exemplification of this is Singapore successfully securing S$13 billion worth of foreign investment in the first four months of 2020 despite the ongoing pandemic. This achievement can be attributed to Singapore’s openness, strong intellectual property protection and access to skilled workers. Furthermore, Singapore’s strong research and development (R&D) capability has produced a growing number of innovations in areas such as food tech that could be invaluable exports to different parts of the world, further driving up Singapore’s mindshare.
In times of crisis, the Singapore brand is valued even more by the international community. Singaporean firms can and should make full use of our intangible strengths and take this opportunity to venture into the Chinese market, and to work with Chinese partners in areas such as supply chain restructuring, transport and logistics productivity, e-financing, research and development of Covid-19 vaccines, treatments and diagnostics, and agritech.
As Singapore celebrates the 30th anniversary of diplomatic relations with China this year, the challenges that we are experiencing may be opportunities for the two countries to collaborate in new growth areas and take our relations to greater heights.
As we look towards the post-Covid-19 era, companies should also be positioned to anticipate the post-pandemic growth of China and China’s increasing economic interactions with Asean. It is expected that China’s coastal regions will be among the first regions to recover economically with a changed supply chain and logistic trade flow. China, being the first to emerge out of the global pandemic, is poised to play an important role in Asean’s economic recovery.
Singapore as a bridge between China and Asean
For the first time, Asean surpassed the European Union (EU) to become China’s top trading partner in the first quarter of 2020. With greater economic collaboration between China and Asean, Singapore can play a pivotal role in expediting the recovery for the region.
As a long-standing partner of China, Singapore can be a valuable gateway facilitating exchanges between China and Asean. A shining example is the China-Singapore (Chongqing) Connectivity Initiative, our third Government-to-Government project. The Initiative aims to foster greater connectivity, not just between Singapore and Chongqing, but also between the regions of western China and South-east Asia. Chongqing’s strategic location and Singapore as a base for global businesses to access markets, capital and technology are highly complementary.
Taking a step further, there are many promising opportunities for Singapore and China to build third-party markets together, especially in countries along the “Belt & Road”. This resonates with China’s “going global” strategy, where Singapore can facilitate the outflow of Chinese capital, partner Chinese enterprises to penetrate third-party markets in the region and beyond. Some of these projects sit in South-east Asia and areas of collaboration include logistics, e-commerce, infrastructure and professional services.
While economies in the region may differ in population sizes, culture, governance and openness to foreign investments, Singapore with our deep-rooted presence in Asean can help to enhance mutual understanding between China and Asean countries, as well as help enterprises in the Asean member states to venture into the Chinese market.
Business China and the FutureChina Global Forum
As we navigate through unchartered territories amid the Covid-19 pandemic, it takes expertise to identify and capitalise on opportunities around us. Singapore aims to offer platforms to allow businesses to tap opportunities across the region and the world.
Among Business China’s programme offerings, the FutureChina Global Forum (FCGF) is our flagship programme providing a high-level and diverse platform for sharing insights into China’s economic and social growth.
As with previous years, FCGF 2020 will gather esteemed speakers comprising government officials, leading industry experts, thought leaders, distinguished business leaders, founders and senior management of renowned firms.
The speakers will be sharing their insights into the trends, trade flow shifts, growth opportunities and lessons drawn from the Covid-19 outbreak. Through FCGF 2020, participants will gain unique insights into China and Asean’s development as well as appreciate the strategic role that Singapore plays.
I wish the attendees in this year’s virtual FCGF series a fruitful and rewarding experience.
The writer is the CEO of Business China, a non-profit organisation to cultivate bilingual and bicultural Singapore-China-savvy talents