ASEAN KEY DESTINATIONS
Slower economic growth for Singapore as Chinese demand weakens: Lee Yi-Shyan
NANNING, China: Singapore is expected to see slower economic growth due to weaker demand from China, Senior Minister of State for Trade and Industry Lee Yi-Shyan said on on Friday (Sep 18).
Speaking on the sidelines of the 12th China-ASEAN Expo, Mr Lee called on companies to look for new markets in ASEAN and new business models.
His comments came as Singapore is on the brink of a technical recession in the third quarter. Non-oil domestic exports for August slipped an unexpected 4.6 per cent on month, reversing a 2.5 per cent gain in July.
"We have to be realistic in Singapore given that we have all these domestic consideration in terms of workforce growth in terms of having a stable labour market, then you have to really accept that growth will be slow - but hopefully there will be qualitative growth that rewards workers with increasing wages," said Mr Lee.
"If wages are increasing faster than the productivity then we can run into a situation where we become uncompetitive and irrelevant in certain industries, hence the emphasis on productivity and business models," he added.
Mr Lee did not say how long Singapore's downturn is expected to last, but said China's slowdown is not good for Singapore's economy.
On the measures taken by Beijing to support the country's economy, Mr Lee said that fundamentally, it is better quality of jobs and higher wages that will help.
"You can influence the market in the short term by relaxing lending policies by easing money supply and in some instances people may take up some debt to consume. But that cannot be the long-term solution," said Mr Lee.
Mr Lee said anecdotal feedback from Singapore companies operating in China has been mixed - some have said they are experiencing zero to negative growth, while others reported growth below 7 per cent.
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