Entering new markets in ASEAN is “on the agenda” for Singapore businesses, according to Alan Turner, head of commercial banking, HSBC Singapore.
“We are seeing increased interest by Singapore SMEs looking to branch out in ASEAN, including Myanmar and the Philippines, where policy changes are liberalizing retail sectors by allowing full foreign ownership,” he said. “Vietnam has also been busy this year, but we expect our closest neighbors, Indonesia and Malaysia, to continue to be the most active ASEAN destinations.”
While the US-China trade war may diminish ASEAN’s pursuit for global growth, it also offers opportunities through possible supply chain diversion, which Singapore SMEs are looking to capitalize into, Turner added.
Singapore Business Federation CEO Ho Meng Kit, is in the opinion that local firms must utilize and take advantage of the 23 free trade agreements that were signed to better compete globally, as they offer assurance in their trade and investments in the midst of current climate of escalating tensions and protectionism.
Ho pointed out that while the outlook in 2019 remains fogged up, he also added that SMEs must embrace adaptation and take steps to drive transformation from within in order to acclimatize to shifting trends and business environment.
A spokesman from the Singapore Chinese Chamber of Commerce and Industry (SCCCI) also agreed that the trade tensions shove Southeast Asia into the glare of publicity and a focus of public interest. “It has made ASEAN an attractive alternative, or a supplementary manufacturing base to Singapore,” said SCCCI.
“Singapore, being a logistics, shipping and financial hub that serves this region, can potentially stand to benefit from positive spin-offs from this development… This trade war may impact some existing business opportunities, but other new ones may emerge.”
Wilson Chew, entrepreneurial and private clients partner, PwC Singapore, assessed that the trade war is “not the end of the world” for SMEs. According to Chew, SMEs that serve the US or Chinese markets are evolving accordingly by establishing alternative sources of supply. “In this context, Southeast Asia presents a positive outlook over the medium term,” he added.