He expressed hope that German SMEs would expand in Singapore and use it as a gateway to Asia
By Lee U-Wen, The Business Times, 5 Feb 2015
By Lee U-Wen, The Business Times, 5 Feb 2015
"It has to be the sort of manufacturing that fits our circumstances, and we do want manufacturing as an important pillar of our economy," he told the Singapore media in an interview in Berlin.
The companies in Germany are strong when it comes to manufacturing, and Singapore is ready to work closely with them and help them succeed in Singapore, he stressed.
On this trip to Germany, his first since 2005, he spent some time over the last four days meeting representatives from various German businesses to understand their views and concerns.
"It's important that when I travel, I take the chance to talk to company executives so that they hear from me first-hand and understand what the Singapore government's stance is," said Mr Lee.
Among the many representatives of German firms he met on this visit were those from the likes of semiconductor manufacturer Infineon Technologies, and engineering giants Siemens and Bosch - all prominent multinationals that have had long histories of doing business in Singapore.
Mr Lee expressed hope that more of the German "Mittelstand" - the small and medium-sized enterprises that form the backbone of the German economy - would consider expanding in Singapore and use the Republic as a gateway to Asia.
Whether they are big or small, he said, German businesses shared similar concerns about investing in Singapore.
"One of the major issues that is critical to them is that, in Singapore, they get consistency in policy, regulatory transparency. Ours is a clean system, a company's intellectual property is protected, and they can depend on what we say being fulfilled and honoured, not just in the short term but over the long term too."
Mr Lee assured them that the government would uphold the system that has worked well for them, and that the Singapore economy would continue to upgrade itself over time.
Mr Lee assured them that the government would uphold the system that has worked well for them, and that the Singapore economy would continue to upgrade itself over time.
"We are keeping the economy on an even keel. We are upgrading, we are helping the companies to upgrade. We are managing the inflow of foreign workers and executives. While we have to control the numbers, we will continue to rely upon them."
Mr Lee brought with him on this trip a large delegation of business leaders led by International Enterprise (Singapore) and by the Singapore Business Federation.
In the hour he spent over breakfast with most of the executives on Wednesday, one of the main issues that emerged was that of the ongoing shortage of manpower.
While he was unsurprised at this, he noted that many of the Singapore companies were generally doing well and that some had successfully ventured abroad, both in traditional markets and far-flung ones.
"They told me how they've expanded overseas, and many have significant operations in Iskandar (in Johor), Batam, China, Thailand. One company even has an operation in Brazil. That's the way our companies have to go - have some operations in Singapore, but also overseas. Then, you are successful because of your combined presence in many parts of the world," he said.
At this point in the interview, he reiterated the need for Singapore to have a strong and thriving economy that could generate good jobs for the people and pay good salaries.
"We must have a vibrant, humming economy (that) must be successful. That's what we have been trying hard to do, and we are trying hard to get people to understand that this is important," he added.
With the Germany leg of his week-long European trip complete, he and his delegation made their way to Madrid on Wednesday night to begin a two-day official visit to Spain.
While in the Spanish capital, he will have an audience with King Felipe VI, the 47-year-old monarch who began his reign last June following the abdication of his father, Juan Carlos.
Mr Lee is also scheduled to meet Prime Minister Mariano Rajoy and a number of key ministers.
Four ambassadors with a remit to woo German SMEs
By Zakir Hussain, The Straits Times, 5 Feb 2015
By Zakir Hussain, The Straits Times, 5 Feb 2015
Over the next three years, this pioneer batch of ambassadors will encourage firms like theirs to develop their business in Singapore.
They will also advise German small and medium enterprises - known as Mittelstand - on how to operate successfully in Asia.
Prime Minister Lee Hsien Loong presented them with certificates of appointment at a ceremony on Wednesday, as he wrapped up his four-day visit to Germany.
The four ambassadors are Dr Michael Schadlich, former chief executive of automotive manufacturer Dorma Group; Mr Thomas Fischer, chairman of the supervisory board at automotive and filtration equipment supplier Mann+Hummel; Mr Peter Riedel, president and chief operating officer of electronics group Rohde & Schwarz; and Dr Gunther Kegel, chairman of automation and sensor technology manufacturer Pepperl+Fuchs.
EDB chairman Beh Swan Gin said: "They are considered key opinion leaders in their respective fields and are very well-positioned to provide practical advice to Mittelstand companies on undertaking R&D, manufacturing, operations and general management in Singapore and in Asia."
Dr Beh noted that Singapore shared many of the Mittelstand companies' core values.
These include a long-term view on investments and business, an emphasis on trust and reliability, investment in research and development and education, and a commitment to excellence.
One of the new ambassadors, Mr Riedel, said: "Singapore not only provides a pool of skilled workers, a stable legal system and the protection of intellectual property, but also offers close proximity to the fastest-growing markets in the world."
His counterpart Mr Fischer described Singapore as a "trustworthy hub in Asia", and added: "We can rely on its political and legal conditions, and have access to excellent suppliers."
German foreign direct investment in Singapore totalled €1 billion (S$1.5 billion) in 2013, the largest amount of German investment in South-east Asia.
German foreign direct investment in Singapore totalled €1 billion (S$1.5 billion) in 2013, the largest amount of German investment in South-east Asia.
Some 1,400 German firms have a presence in Singapore.
Dr Beh noted that several Mittelstand companies are sponsoring polytechnic engineering graduates from Singapore to study in German universities of applied sciences, after which they will be offered work opportunities in the companies' Singapore operations.
Separately, another group of German multinationals and Mittelstand companies are working with the Singapore Institute of Technology to pioneer a dual studies degree programme in Singapore.
Territorial disputes can be set aside: PM Lee
Prime Minister Lee Hsien Loong spoke on the rise of China, rivalries in South-east Asia and the pragmatism with which a small country secures its influence in an interview with German newspaper Sueddeutsche Zeitung during his visit to Berlin this week. Here is an edited translation.
By Stefan Kornelius, The Straits Times, 6 Feb 2015
Prime Minister Lee Hsien Loong spoke on the rise of China, rivalries in South-east Asia and the pragmatism with which a small country secures its influence in an interview with German newspaper Sueddeutsche Zeitung during his visit to Berlin this week. Here is an edited translation.
By Stefan Kornelius, The Straits Times, 6 Feb 2015
MR LEE HSIEN LOONG is Prime Minister of a small country with a big name and influence that should not be underestimated. The city-state Singapore with its 5.4 million inhabitants might seem tiny next to the major Asian powers. But as a traditional trade and transfer hub with excellent relations to all regions in the world and with Western thinking prevalent among its political elite, Singapore has always been arbiter, interpreter, and a microcosm for European and American projections of South-east Asia.
Mr Lee, 62 years old and Prime Minister for 101/2 years, went to school in the West and rose to the state's pinnacle after a long military and political career. It was certainly no obstacle that his father and Singapore's founding prime minister Lee Kuan Yew turned the city-state into what it is today: A multi-ethnic small state with a good track record for integration, led with a firm hand, governed de facto by one party, strictly geared towards increasing prosperity, and friends with both China and the United States.
Mr Lee, 62 years old and Prime Minister for 101/2 years, went to school in the West and rose to the state's pinnacle after a long military and political career. It was certainly no obstacle that his father and Singapore's founding prime minister Lee Kuan Yew turned the city-state into what it is today: A multi-ethnic small state with a good track record for integration, led with a firm hand, governed de facto by one party, strictly geared towards increasing prosperity, and friends with both China and the United States.
During his visit to Berlin, Mr Lee emphasises in an interview with Sueddeutsche Zeitung that this traditional role of balancing between major players is not just part of Singapore's central political understanding but also of most other South-east Asian states. "Everyone in the region wants to make friends with China and gain from the opportunities from its rise," says Mr Lee. "But at the same time, they would like the region to be open, to be stable and to maintain the relationship with Europe, America and the rest of the world."
The economic boom in China and its neighbouring states has given rise to a certain understanding of realpolitik which Mr Lee can easily describe: "It is not just a power matter; it is also a matter about your reputation internationally." With a view to China, he asks: "What image would you like the world to have of you?" According to him, it is impossible to understand day-to-day skirmishes without a long-term perspective: "The US is still a major player in the Pacific but it is not the only one. It is not the number of ships that is decisive but whether the US positively and constructively maintains its relations to the states in question. We do not want to choose between China and the US."
Mr Lee nevertheless does not deny that tensions between South-east Asian states have grown - especially due to unresolved territorial claims in the South China Sea and questions of maritime sovereignty. His typical pragmatism becomes apparent when he states that: "China with more resources and wealth, can become more assertive in defending and advancing its sense of its rights and what it is entitled to. Nationalism plays a role in China and other countries in the region. If disputes are burdened by nationalism, and also loaded with a historical dimension, then it is impossible to solve them. But disputes can be set aside. The parties involved can agree not to settle this, but you move on and try to keep the relationship on an even, practical and constructive level."
Setting aside problems and benefiting from one another: Mr Lee never tires of referring to the long historical dimension with which Asian states and especially China tackle their day-to-day problems. According to him, territorial disputes can never be resolved to everyone's satisfaction. "No one can produce documents that can prove a historically indisputable ownership claim. All you can say is, there were fishermen or sailing junks that were in this area, and human beings who have been living in this part of the world for thousands of years. All you can do is agree to disagree, and manage the disagreement so that you do not accidentally have two boats colliding or two aeroplanes crashing or exchange of fire and events spiral out of control. It is not a good basis for discussion when someone says: 'What belongs to me belongs to me'."
Since last year, the dispute about the various archipelagos and seafaring rights in the South China Sea has been pending before the International Tribunal for the Law of the Sea in Hamburg. The Philippines is pushing for clarification. The subject of the proceedings is China's claim to exercise not just commercial rights such as fishing but also other sovereign rights within a 200-mile zone. If, for example, China were to make use of these rights and prevent merchant ships from passing through, this could considerably limit international maritime transport and provoke massive tensions in the much-frequented South China Sea.
Singapore, which is situated between the South China Sea and the Strait of Malacca, and as a trading nation depends on the routes being kept open, takes a clear stance: "Freedom of navigation is crucial, it is a very serious issue," Prime Minister Lee remarks. "No one knows exactly what the Chinese claim. Two hundred miles, the Nine-Dash Line or island territories: I suspect it would be disadvantageous for them to spell out exactly the basis of their claims. So they would just claim and assert what they have drawn on their maps."
Mr Lee suspects that the maritime tribunal in Hamburg will not be able to resolve the conflict either. China questions its authority even though the Chinese ratified the United Nations convention which forms the basis of maritime law. For Mr Lee, this is "taking a big-power position: What I assert is mine and I will continue asserting it's mine".
The Asean group of states is working on a binding code of conduct which would at least regulate actual interaction between the parties in the areas of tension. "This will take time," the Prime Minister believes. However, he also makes it unmistakably clear that the disputes are not caused by territorial claims but chiefly by a demonstration of assertiveness.
Japan's role in region
MR LEE, however, takes a different stance when it comes to Japan's role in the region which, according to him, is primarily shaped by a heavy historical burden. Tensions between China and Japan about the Senkaku/Diaoyu islands are the expression of profound historical resentment, he says. When asked whether China and Japan should try to find a common view of history, Mr Lee laughs out loud. "This is impossible. On one side, nothing has been forgotten and, on the other, nothing is remembered." According to him, more than one generation of young Japanese has grown up without knowing all the bad things that were done by the Japanese military government, as well as their soldiers all over China and Asia, while the Chinese government practically cultivates the image of Japan as an occupying force. "Now there is a new generation in the Japanese government which wants Japan to be a normal country without wanting to assume responsibility (for the past)." The German way of coming to terms with its past is "unimaginable" in Japan, he says.
Mr Lee, however, shows understanding for Japan's attempt to counterbalance China's influence in the region. "From an economic point of view, they will be able to do so and definitely with regard to technology. But when it comes to the projection of power, they will not be able to compete with China. If Japan wants to have more influence, then this would only be possible in a way that does not evoke old fears. They have not yet reached that point."
The Prime Minister calls on Germany and the European Union (EU) to play a more active role in the region. While there are 1,400 German companies in Singapore, Mr Lee always perceives a certain hesitation in European investors. A good example of such hesitation is the EU-Singapore Free Trade Agreement which could still be brought before the European Court of Justice and had introduced the Prime Minister to the subtleties of European bureaucracy.
Mr Lee also demonstrates political pragmatism when it comes to European issues of war and peace. He is clear about Russia's historical sphere of influence in Ukraine and accuses the EU of ignoring the Maidan Revolution's repercussions. "You may not like Mr (Vladimir) Putin's style, but these are geostrategic realities" which, however, must be balanced by questions of territorial integrity, he says. "Countries cannot go round annexing other countries."
Spain 'can be springboard to Latin America'
S'pore companies can tap expertise of Spanish firms
By Zakir Hussain, Deputy Political Editor In Madrid, The Straits Times, 6 Feb 2015
S'pore companies can tap expertise of Spanish firms
By Zakir Hussain, Deputy Political Editor In Madrid, The Straits Times, 6 Feb 2015
FIVE hundred years after Spanish explorers discovered Latin America while trying to get to South- east Asia's spice islands, modern-day traders on both sides are being encouraged to see Spain as a bridge between the two regions.
Singapore companies can tap the know-how, expertise and experience of Spanish companies to gain access to the growing Latin America market, Singapore Business Federation (SBF) chief executive Ho Meng Kit told a meeting of officials and businessmen from Spain and Singapore yesterday.
Agreeing, senior Spanish official Antonio Fernandez-Martos said: "Singapore is a platform for us to get to know Asia, and Spain can be a springboard for Singapore firms wanting to go to Latin America."
"Spain is a privileged route for access to the Mediterranean countries and Africa as well," added the director-general for trade and investment in the Ministry of Economic Affairs and Competitiveness.
They were speaking at the Spanish Confederation of Employers' Organisations (CEOE), which a 16-member SBF delegation visited,in conjunction with Prime Minister Lee Hsien Loong's visit to Spain this week.
Mr Lee, who was not at the business meeting, is on his first official visit to Spain. He arrived in Madrid from Berlin on Wednesday night.
Yesterday, Spanish Foreign Affairs and Cooperation Minister Jose Garcia-Margallo called on him. They met for nearly an hour and discussed wide-ranging regional issues, including terrorism, the Islamic State in Iraq and Syria militant group and reforms in Europe, Mr Lee's press secretary Chang Li Lin told journalists.
She also said Mr Lee had a meeting with Spanish Economic Affairs and Competitiveness Minister Luis de Guindos Jurado, who hosted him to lunch with Spanish business leaders. They had a good discussion on the state of the euro zone and Spain's economy, Ms Chang said.
Spain is Singapore's 43rd-largest trade partner globally; total trade last year was about S$2 billion.
But senior Spanish businessmen, such as CEOE vice-president Juan Pablo Lazaro, feel the figure is way below its potential, and suggest both sides exchange more data on business opportunities.
SBF's Mr Ho agreed, saying small and medium- sized enterprises (SMEs) could work together on raising innovation and productivity, among other things. Mr Juan Ignacio Lema of engineering and infrastructure company Tecniberia suggested engineering firms of both countries team up for new projects in third countries.
Spanish Secretary of State for Commerce Jaime Garcia-Legaz said urban development is an area for cooperation, citing how Barcelona has become a global example of a city that has melded tradition and modernity. Spain's economy is forecast to grow by 2.3 per cent this year and 2.6 per cent next year, which is among the fastest in Europe, he said.
Meanwhile, Singapore's Second Minister for Trade and Industry S. Iswaran noted Spain has undertaken important structural reforms, and urged Spanish SMEs to consider investing in Singapore.
He assured the businessmen that Singapore will set up a registry for geographical indicators, so that Valencia oranges and Mahon cheese could be considered uniquely Spanish products. Many Singaporeans are familiar with Spanish La Liga football, he said, adding he watched Real Madrid play Sevilla on Wednesday. He noted Singaporean businessman Peter Lim had invested in Valencia Football Club.
Asked about the Singapore-Kuala Lumpur high- speed rail project, Mr Iswaran said details are being worked out, adding: "Once we are clear about the process, we will make it public and invite participation, and I am sure Spanish companies will be in a strong position to bid for it."
Today, Mr Lee will have an audience with King Felipe VI and call on Spanish Prime Minister Mariano Rajoy before leaving for home.
Europe's leaders 'confident about economy'
It's a good sign but outstanding concerns remain: PM Lee
By Zakir Hussain, Deputy Political Editor In Madrid, The Straits Times, 7 Feb 2015
It's a good sign but outstanding concerns remain: PM Lee
By Zakir Hussain, Deputy Political Editor In Madrid, The Straits Times, 7 Feb 2015
PRIME Minister Lee Hsien Loong sees it as a good sign that European leaders have confidence in the state of their continent's economy.
But he noted yesterday that there also were a number of outstanding concerns remaining.
The European Central Bank (ECB) is going into quantitative easing - buying up trillions of dollars in bonds to push interest rates down and pump liquidity into the system - in the hope of stimulating lending and business activity, he said.
"These are not measures which you do unless you think there is something quite serious," he added.
"But they think it is necessary and I hope it will be helpful."
Speaking to Singapore reporters at the end of a week-long trip to Germany and Spain, Mr Lee said that Spain had come out of a very tough time, and its leaders had done all they could heading into an election this year.
He hoped the election would give Spain a good government that would be able to continue with the necessary measures, and help the country play its role in making the euro zone and the European Union (EU) a success.
This, Mr Lee said, would give Singapore an environment in Europe "where we can cooperate with them and do more together".
On Thursday, the European Commission raised its growth forecast for the EU for this year to 1.7 per cent, up from the 1.5 per cent it predicted last November.
The EU is also projected to grow by 2.1 per cent next year.
Its economics commissioner Pierre Moscovici said the fall in oil prices and the cheaper euro were a "welcome shot in the arm" for the EU economy, and the ECB's measures would create a supportive backdrop for reforms.
"But there is still much hard work ahead to deliver the jobs that remain elusive for millions of Europeans," Mr Moscovici added.
Germany is expected to grow by 1.5 per cent this year, and Spain by 2.3 per cent.
Mr Lee noted that Europe also needed fiscal policy steps, economic restructuring and political arrangements to be consolidated and integrated.
And its major economies had to deal with immediate fires that may crop up like Greece, whose debt crisis threatens the EU and has pitted it against Germany.
Greece featured in Mr Lee's meetings with German leaders this week, and he said the fear they had was not just Greece, but the precedent it set.
And if Greece could get certain terms, other economies in trouble would expect the same, as would their voters, he added.
As for Spain, Mr Lee said that Singapore's relations with the country were comparatively less than with other major European economies.
But business links could be built up.
Singapore companies could work with Spanish ones to do more in Latin America, and Spanish companies are interested in doing more in Singapore and Asia, he noted.
Mr Lee said that Spanish business leaders whom he met had said they were keen to bid for and win Singapore's infrastructure projects, including MRT lines.
"They have bid before; so far they have not won, so I have encouraged them to keep on bidding," he said.
But he said that Spanish banks were already in Singapore, and cited Santander and BBVA, as well as oil group Repsol.
Other Spanish household names include clothing retailer Zara and frozen yogurt chain Llao Llao.
Earlier yesterday, Mr Lee had an audience with King Felipe VI of Spain.
They reaffirmed the good bilateral relations between Singapore and Spain, and discussed ways to deepen bilateral cooperation for mutual benefit, Mr Lee's press secretary Chang Li Lin said.
Such cooperation includes leveraging on each other's strengths as hubs in their respective regions, she added.
Mr Lee also met Spanish Prime Minister Mariano Rajoy, who hosted him to lunch.
Both leaders agreed to work to strengthen the flow of trade and investments between the two countries, and underscored the importance of the EU-Singapore free trade agreement in that regard, Ms Chang said.
The leaders also agreed on the importance of the rule of law in the conduct of international relations.
Mr Lee left for home yesterday.
Imports from Germany are up since 2010
Two-way trade steady at $20 billion annually for the past five years
By Jacqueline Woo, The Straits Times, 7 Feb 2015
Two-way trade steady at $20 billion annually for the past five years
By Jacqueline Woo, The Straits Times, 7 Feb 2015
NEW figures show that imports from Germany have jumped since 2010, though Singapore's exports to that country have slipped a little.
The figures from trade agency International Enterprise (IE) Singapore were released just as Prime Minister Lee Hsien Loong concluded a visit to Germany and Spain. Three trade missions went to Germany in conjunction with the visit.
About $13.48 billion worth of goods and services were brought in from Germany last year, up from $12.12 billion in 2010. They comprised mainly electronic components, parts for tractors and motor vehicles, and measuring instruments.
Exports to Germany, however, fell to $6.82 billion last year, from $8.37 billion in 2010.
Singapore exports mainly machinery, computers, electronic parts and chemicals to Germany, said the Singaporean-German Chamber of Industry and Commerce.
It also supplies Germany with a small amount of food products, including live fish, pepper, and certain fats and oils, going by data from Germany's foreign trade and inward investment agency Germany Trade & Invest.
On the whole, two-way trade between the two countries, which have enjoyed strong economic ties, has held steady at more than $20 billion annually over the past five years.
Germany was Singapore's top trading partner in the European Union last year, and the 14th largest globally.
Singapore, in turn, was Germany's top trading partner in Asean in 2013, and its 33rd-largest trading partner globally. It was also Germany's fifth-largest trading partner in Asia, after China, Japan, South Korea and Taiwan.
Some 1,400 German firms have a presence in Singapore, across a number of key sectors such as chemicals, electronics, engineering and logistics.
They include big-name companies such as engineering giants Siemens and Bosch, automobile manufacturers BMW and Mercedes-Benz, and Deutsche Bank.
German foreign direct investment in Singapore was €1 billion (S$1.5 billion) in 2013, the largest amount of German investment in South-east Asia.
In the same year, Singapore's direct investments in Germany reached about $1.7 billion.
Home-grown leather furniture manufacturer HTL International Holdings is among the Singapore companies with a presence in Germany.
The mainboard-listed firm, which acquired German luxury furniture brand Domicil Moebel in 2013, has a head office in Munich, as well as a total of 18 retail stores across Germany.
Defence and engineering conglomerate Singapore Technologies Engineering also owns a 35 per cent stake in Dresden-based Elbe Flugzeugwerke through its aerospace arm, ST Technologies Aerospace. Elbe Flugzeugwerke specialises in aircraft maintenance and the manufacturing of Airbus aircraft components.
There are more opportunities for collaboration between companies from both counties, particularly in the area of smart energy and advanced manufacturing, added IE Singapore assistant chief executive Satvinder Singh. "German companies can (also) develop strong partnerships with our companies and tap their extensive network in Asia to sustain long-term competitiveness in the region and global markets."
Singapore's bilateral trade with Spain has also grown over the past five years, reaching $1.94 billion last year, up from the $1.41 billion in 2010.
Spain was Singapore's eighth-largest trading partner in the EU last year, and the 43rd largest globally.
More than 200 Spanish companies operate in Singapore today, including engineering firm Abeinsa, wind turbine manufacturer Gamesa, and Amadeus, which provides travel technology solutions.
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