Singapore to benefit from China’s sustained GDP growth

Singapore is a leader itself; developed as it is, GDP is still growing close to emerging markets’ pace of 6-7%, robust enough to sustain domestic demand. Singapore is one of the world's best examples of successful development. In 1965, it separated from Malaysia. At the time, it was a poor island with high unemployment and no natural resources. But it has grown to become one of the world's wealthiest (total official foreign reserves of US$225.8bn as at 2010 is among the highest in the world on a per capita basis).

GDP growth has averaged 7% a year since 1975. Today, Singapore has pride itself as a developed economy with many No.1 to boast of. Its economic growth is higher than most developed economies and on par with up-and-coming Asean economies. All thanks to government initiatives, which created new trends and extended growth for the country. The economy might have eased 0.5% for 2Q11 but it is still expected to expand by some 5-6% in 2011and 2012.

External demand would also propel Singapore companies, most of which are strategically placed to tap on Asia’s strong and continuous growth over the next few years. Asia is where growth is taking place and going forward, it will continue to be a driving force for the global economy. GDP growth for Asia fuelled mainly by China’s rapid expansion, over the next 1-2 years (c.6%) is expected to be much stronger than the US (c.2%) and the Eurozone (<2%) .Singapore companies, strategically located in the heart of Asia, will profit from China’s sustained GDP growth, projected at 9% for the next two years, and the rise of Asean.

Capitalize on key and sustainable emerging trends to outperform… Asia’s urbanization has resulted in the proliferation of modernized and integrated F&B outlets as well as mega shopping centres and lifestyle malls. Rising affluence of Asian economies is also boosting tourism and especially demand for budget travel; it is hip to fly low cost carriers and check into boutique hotels.

In Singapore, we are game to get a piece of action in Asia’s tourism boom with the draw of two integrated resorts – casinos integrated with business and leisure facilities. New generation consumers are also internet savvy and info-hungry, so explosive demand for data storage is to be expected. Beyond middle class, the super wealthy is growing too!

The ultra rich is snapping up exclusive high-end properties and driving discretionary spending on luxurious lifestyle products. With growth also come various challenges and risks, including inflation, mounting health issue and rising pollution. As Singapore continues to build water self-sufficiency, its experiences and successes will make it a model for countries worldwide to follow in resolving their own water issues. 

…and ride with the market leaders to profit from Asia’s emerging trends. To leverage on the rising force of Asia, stick to the trendsetters or key beneficiaries in Asia with dominant and sustainable competitive advantages - what we consider as emerging leaders - to outperform the market.

To identify the leaders we look for: 1) significant market share in their established markets and presence in new growth markets; 2) relevant products / services that could capitalise on new and emerging trends; 3) strong niches or competitive advantages to fend off competition and 4)proven and committed management team. In addition, we also size up financial strength and track record to identify potential leaders who are ready and able to seize opportunities and/or rise to new challenges.