How Singapore plays a key role in China’s global expansion

SINGAPORE: A recent CNBC video looked into the importance of Singapore in China’s global expansion, with a special focus on how Chinese companies, such as ByteDance, Tencent, Alibaba, and Shein, have been setting up regional headquarters, research and development centres, and AI labs in Singapore.

These firms are strategically making use of Singapore’s capital and talent for markets in the region as well as for expansion across the globe.

Where China used to have a “China Plus One” strategy, this has now expanded into “China Plus Many,” with the report pointing out how a central hub, Singapore, coordinates supply chains across Asia, by connecting China to markets such as Malaysia and Vietnam, but also functions as a hub for finance and logistics.

There are now about 8,500 Chinese companies in the city-state, and the nature of those businesses has shifted from trade and infrastructure to tech, in large part to Singapore’s AI push, talent, and capital.

David Stepat, the country director of the professional services firm Dezan Shira and Associates, described Singapore as a “control tower in the region.”

“Everyone can do business here. And this is something very important to Chinese companies and Chinese investment. When you look at the fixed asset investment into Singapore, the Chinese fixed asset investment rose from 2.5% in 2024 to 20.6% in 2025. That’s an eightfold increase.  At the same time, American investment went back,” he said.

He also underlined that Singapore is positioned between Washington and Beijing without leaning toward either superpower.

“In your Asia strategy. If you do not have Singapore in there, then I would question whether you have the right setup,” he added.

China has been Singapore’s largest partner for over a decade, with 95% of  Singapore’s exports to China being tariff-free. In turn, since 2022, Singapore has been China’s biggest source of newly committed foreign investment, and two years later, it invested about US$10.7 billion into China, with Chinese companies investing almost US$11.8 billion into Singapore. 

Alfred Schipke, the director of the East Asian Institute and Professor of the Practice of International Finance at the Lee Kuan Yew School of Public Policy, called Singapore “a safe place to have your investments and deploy them from here into other markets in the region.”

He explained that while Singapore is the largest investor in countries such as Vietnam and India, the investment may not come from local companies, but from multinational companies that have their headquarters in the city-state.

For Chinese firms, Singapore is also the gateway to the middle class in Southeast Asia, now numbering almost 700 million. /TISG

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