50 years: Stronger than ever
Synergy Media Specialists asked Assistant Managing Director and Japan spokesperson of the Singapore Economic Development Board, Swee Nian Lim about Singapore’s relations with Japan.
In light of the 50th Anniversary of diplomatic relations between Japan and Singapore, how would you characterise the trade and economic relationship today?
The trade and economic relationship between Japan and Singapore has evolved over the years into one that is mutually beneficial and greatly valued by both countries.
In the seventies, Japan was Singapore’s largest foreign investor and trading partner, Sumitomo Chemical for instance, is one of the earliest and largest investors in Jurong Island, playing a key role in our efforts to develop Singapore as a chemicals hub. Along with capital investments, Japan transferred valuable industrial knowledge, technology as well as skills to our people.
Japan also played a large role in the way Singapore’s social policies were constructed. In 1980, the Singapore government studied Japan’s labour practices and public security efforts, which led to company labour unions and neighbourhood police posts being implemented.
However, as Singapore’s economy grew, so did our role in the partnership with Japan.
With Japan and Singapore facing similar problems such as ageing and a shrinking domestic workforce, we hope to continue building upon our strong partnership and jointly develop technologies and solutions to address these issues.
How strong is the present state of bilateral trade, exchange and cooperation between Japan and Singapore?
Singapore and Japan’s relationship is now stronger than ever.
Now, Singapore has one of the largest Japanese expatriate communities in the world, outnumbering other thriving Asian cities such as Seoul and Hong Kong. From 2010 to 2014, the number of Japanese residents in Singapore increased by around 50 per cent and the number of Japanese companies, by close to 10 per cent .
And in the same period, Singapore’s cumulative foreign direct investments into Japan was the largest in Asia, coming in just behind the US and UK globally.
These recent data points are indicative of a strong and vibrant relationship between both nations and Singapore looks forward to further strengthening the relationship in the future.
What areas can benefit the most from a closer relationship moving forward?
With a closer economic relationship moving forward, we’ll see more Japanese companies leveraging Singapore as a base to manage their overseas operations and explore new business opportunities amid a fast growing middle income class in Southeast Asia.
ASEAN is currently the seventh largest economy in the world and is expected to become the fourth largest global economy by 2030 . With the average GDP per capita in ASEAN doubling from 2005 to 2010 and estimated to triple by 2016 , the Organisation for Economic Cooperation and Development (OECD) projects that Asia, driven by ASEAN’s growing middle class, will account for 59 per cent of global middle-class consumption by 2030, up from just 23 per cent in 2009.
With the rise of middle-class affluence, ASEAN consumers are demanding more sophisticated products and services that cater to their needs and preferences. In response to this development, Japanese companies can leverage on Singapore to better understand the new opportunities and develop new products and services for the new markets. This could include conducting marketing and product development activities to cater to the preferences of the ASEAN consumer market while maintaining global brand consistency.