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Amid growing tensions between US, India and China, some of China’s largest technology companies are expanding their operations in Singapore. Chinese gaming giant Tencent and e-commerce giant Alibaba are expanding their presence in the city. ByteDance, which owns the famous video sharing app TikTok (recently banned by Indian Govt), is investing billions of dollars in Singapore.

China and the United States have good relations with Singapore, known as a neutral state. Currently, relations between Washington and Beijing are becoming increasingly hostile, especially in the area of ​​technology.

Tencent said in an announcement this week that it was expanding its business presence in Singapore in support of growing business activities in Southeast Asia and beyond. Tencent described the new regional office in Singapore as a strategic addition to existing offices in Southeast Asia.

This month, Tencent’s messaging app, WeChat, and ByteDance’s tiktok have been banned in the United States. Chinese various technology companies and apps have recently faced massive crackdown by the US administration. US President Donald Trump has already imposed sanctions on Chinese telecom company Huawei.

Tommy Wu of Oxford Economics says that due to China-US tensions in the technology sector and high-risk countermeasures, Chinese technology companies have adopted the idea of ​​conducting their operations individually at home and abroad.

Tommy Wu is a LeadEconomist at Oxford Economics. Tommy covers macroeconomic research and forecastingon the Asia-Pacific regionand the China economy. Prior to joining Oxford Economics, Tommy wasan economist at the Research Department in Hong Kong Monetary Authority (HKMA), conducting macroeconomic and financial surveillance on the Asia-Pacific region, and research on a variety of topics on China and Hong Kong. Tommy holds a PhD in Economics fromQueen’s University, Canada.

He said Singapore would be an ideal destination for the comparative advantage of the city-state in terms of technology, geographical proximity to China and as an innovative hub in Southeast Asia.

Singapore has always been seen as a regional base for Western institutions due to its improved financial and legal system. The country is now on the radar of Chinese companies.

Political instability in Hong Kong and the introduction of China’s controversial national security law have led many companies to seek a more stable business environment in Asia.

China behind the mask:

Nick Redfern, deputy chief executive of the UK-based consulting firm Rouse, says there is another reason why China is so attracted to Singapore. It could also explain why the city-state has attracted so much foreign direct investment (FDI) compared to other countries in Southeast Asia.

He said this is because the regional headquarters of various companies are in Singapore. From here the companies operate as foreign investors in the Philippines, Indonesia, Vietnam and other countries.

Nick Redfern said all of this could help Chinese companies avoid the presence of Chinese investment. He said Southeast Asia has become China’s largest regional trading partner this year, surpassing the European Union.

Nick has decades of experience in Asia, which has led him to successfully run anti-counterfeiting and anti-piracy work throughout Asia, from the southeast Asian countries to China.

Global footprint:

Rui Ma, a Chinese technology expert and investor, says Western companies (Google, Facebook, LinkedIn and many more) have been seen setting up their Asia-Pacific headquarters in Singapore for some time. Naturally Chinese companies are considering it for the same reason.

I think the recent geopolitical tensions between the United States and China have made it all the more interesting“, he said. But this is not the only and primary reason.

Rui Ma said globalization is another driving force here. If Western companies can be global, why can’t we?

The Chinese investor says Chinese companies are much more interested in investing in the long run. They do not want to be complacent about future opportunities.

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