From Reuters December 18/19:
- Chinese firms seek to move to Singapore amid Sino-U.S. tensions
- Singapore offers strategic advantages
- Relocation benefits smaller firms, big firms face challenges
SINGAPORE, Dec 19 (Reuters) - A growing number of Chinese companies are looking to domicile in Singapore, betting a move to the trade-focused city-state would reduce risks their operations get disrupted by Sino-U.S. geopolitical tensions.
The trend, billed as "Singapore washing" by some analysts, started gaining traction near the end of U.S. President Donald Trump's first presidency and has since accelerated, spreading to various sectors from critical minerals to tech and biotechnology, analysts and experts said.
"Demand has always been rising...and the key thing right now is that it's probably going to accelerate at a more rapid pace," said KG Tan, CEO of InCorp Group, which helps companies relocate or expand in nine Asia-Pacific locations.There is no official data on how many Chinese companies are domiciled in Singapore, but Tan said interest from Chinese firms is "very strong" with about 15-20% more inquiries now year-on-year.Singapore-domiciled companies include optical products maker Terahop, backed by China-based Zhongji Innolight, which set up shop in the city in 2018.More recent additions include data centre operator DayOne, spun off from GDS Holdings (9698.HK); Manus AI, an artificial intelligence agent from China's Butterfly Effect; and ChemLex, an AI-powered chemical synthesis company.Neither Manus AI's nor Terahop's websites make reference to their Chinese backers. ChemLex CEO Sean Lin said he considers his Shanghai-founded startup a Singapore company.
DayOne CEO Jamie Khoo said in July that it always intended to split from its Chinese parent, as both companies operate under different regulatory regimes. Manus AI and Terahop did not respond to requests for comment.
SINGAPORE PROVIDES A STRATEGIC SWEET SPOT
Singapore offers an attractive base for firms looking to navigate U.S. tariffs and maintain access to key American technologies whose sales are restricted in China. Washington imposes tariffs of just 10% on goods from Singapore."The Singapore brand is trusted worldwide. Singapore is valued for its international flavour, neutrality, and is culturally easy for Chinese firms and their expats to adapt to," said Maybank China economist Erica Tay....
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Money in motion is usually a positive and is something to which attention should be paid.
