Coronavirus: Fallout unlikely to hurt investment commitments in next couple of years, says EDB
SINGAPORE – Fallout from the coronavirus outbreak in Wuhan is unlikely to hit investment commitments to Singapore in the next couple of years, Economic Development Board (EDB) managing director Chng Kai Fong said on Monday (March 9).
Speaking at a Singaporean-German Chamber of Industry and Commerce event held at the Mandarin Oriental hotel, Mr Chng also underscored to a group of about 120 attendees the importance of diversifying supply chains after backlogs in factories in China due to the virus outbreak.
“In the short term, yes, (foreign direct investments) get hit in the sense that I’m having far (fewer) meetings this period than before,” he said.
“But… in the medium term, this virus is not a consideration,” he added, noting that the larger considerations are the need to diversify supply chains, to think about different sourcing, to build up capabilities and to expand in the Asean market.
“Those are good factors for us. So, I would say, in the next year or two, we still remain rather optimistic about Singapore.”
In an earlier part of the dialogue, titled “Covid-19: Thinking about managing supply chain disruptions”, Mr Chng said that it may not be easy for companies to move out of China, given the scale and complexity of the items being produced in the world’s largest manufacturer.
He said that even before the outbreak of the virus, the EDB had been talking to companies about supply chain resilience.
“Over the last few years, the conversation has gained more traction,” he added.
“But it’s not so easy to change supply chains overnight… These are long-term investments. The relationship with suppliers is not built overnight,” he said.
“But the good thing is, you start to see some consciousness. People are no longer just looking at where can I produce for the lowest cost…
“People are starting to realise that there is… a premium to be paid to make sure that the supply chains are resilient.”
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