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Road to Chongqing: Move Fast or Miss Out

last updated 03 August 2018

Ahead of Singapore’s participation in the inaugural Smart China Expo, IMDA centre director Chng Ken Wei says Singapore companies have a short window to seize golden opportunities in China.

Chongqing

The Jiefangbei district in Chongqing, the fastest growing city in China in the last four years. (Photo: Baycrest)

By Andy Chen

 

Chng Ken Wei

Mr Chng Ken Wei, IMDA's centre director for China.

The inaugural Smart China Expo, which will be held in Chongqing from 23 to 25 August, is set to be one of the largest ICT events that the Chinese government is organising. It will be held across 150,000sqm of exhibition space, with a 30,000sqm plaza featuring smart technology innovations in diverse industries, including healthcare, tourism and logistics.

Singapore tech firms will be in the thick of action there. Led by the Infocomm Media Development Authority (IMDA), over 20 local firms will be exhibiting at the mammoth event, in the 1,400sqm Singapore pavilion. These include established names as well as up-and-coming ones, such as Jing King Tech, vCargo Cloud, Fooyo and veriTAG. A few Memoranda of Understanding (MOUs) will be signed between Singapore and China companies.

The United States, South Korea, Uruguay and Panama are some of the other participating countries.

To be held concurrently with the expo is the Singapore-Chongqing Digital Economy Seminar, where IMDA will share with Chinese companies Singapore’s framework for action in the Digital Economy and how Singapore can be a gateway for Chinese companies to quickly reach further into Southeast Asia.

Following the seminar, a business networking session will be held for Chinese and Singaporean companies to get to know one another and explore collaborations.

We ask IMDA’s China-based centre director Chng Ken Wei burning questions about what it's like to do business in China now, and in Chongqing in particular.

 

This is probably FAQ No. 1 for many people, and it has been answered before. But it is always good to remind everyone: Why Chongqing?

There are several reasons why we chose Chongqing to be our key partner in China:

Chng Ken Wei

Mr Chng Ken Wei being interviewed for a news story in China.

1) Chongqing is the third and latest Singapore-China G2G collaboration, following Suzhou more than 20 years ago and Tianjin 10 years ago. The multi-level, multi-agency G2G engagement in the city would allow us to build strong and deep relationships across different levels required to make the partnership work.

2) Over the past four years, Chongqing has been the fastest growing city in China, with GDP growth of over two digits. It is also the largest city in China with 30 million residents; Beijing and Shanghai have about 20 million each. This presents a huge market opportunity for Singapore companies.

3) Chongqing being an inland city, its ICT industry is not as well developed as the coastal cities. It is also not as mature or competitive as that of its neighbours Chengdu or Xi'an, which has been long-time ICT outsourcing hubs for China. Hence, there are more opportunities for us to collaborate with them and leverage our respective strengths to develop our own ICT industries.


What are your hopes for the Smart China Expo in August?

Smart China Expo is slated to be one of the top international ICT events held by the Chinese government, and it will also be Singapore’s most significant presence at a Chinese ICT event to date.

The partnership presents us with an opportunity to showcase Singapore’s thought leadership and achievements in our Digital Economy and Smart Nation development, and to also gain mindshare in China.

Moreover, the expo is a good platform for our companies to seek new partnerships or even expand their business in China. Lastly, I hope many of us who have never been to China or Chongqing will take the opportunity to learn more about China’s explosive growth in the ICT sector by participating in the event and interacting with other companies at the expo.

Chng Ken Wei

The view from Mr Chng's table at a recent IMDA-led business exchange visit between Singapore tech firms and their Chongqing counterparts.


How long have you been based in China, and how has the business/economic environment there changed from then to now?

I was posted to Shanghai in August 2012. Many people said I had a tougher job than my predecessors, because the China market has become increasingly more difficult to penetrate as its ICT industry has grown more mature compared to Singapore.

Chng Ken Wei

Mr Chng speaking at a a breakout session on Chongqing during the IMDA SG:Digital Industry Day in May 2018.

When I first arrived, Singapore’s ICT industry was still well respected as innovative and our branding still offered us opportunities. However, this competitive advantage very quickly dwindled as China grew to become one of the top ICT countries in just over these few years, with companies like Baidu, Alibaba and Tencent making headlines globally.

I have had the opportunity to witness the transformation of China through its global dominance in the Internet industry.  

E-commerce, e-payments, bike sharing, food delivery and other such innovations have offered unprecedented convenience to the Chinese, and this has since become the admiration of all other countries, including Singapore. More and more business and technology innovations are now coming out of China.  

These are exciting times indeed!


Given China's tech advancement, what can Singapore companies bring to the table?

China is a huge market and there are many small- and medium-sized Chinese ICT companies that have very good and innovative ICT products but are not interested to go global yet because they have yet to exhaust their own domestic market.  

Hence, Singapore companies have a short window of maybe three to five years to look for opportunities to obtain distribution licences easily and help bring these good and innovative products, and customise them for the Southeast Asian or even global markets.  

This would be a win-win partnership between Singapore and China’s ICT industries.


What have been your biggest learning points about doing business in China?

Singapore companies need to balance risk, governance and speed, and stop worrying about their IP (intellectual property) being stolen by the Chinese. For every “new” innovation that I’ve heard from a Singapore company, I can find 10 more Chinese companies already doing the same.  

Chinese companies are equally afraid of their ideas being stolen, but they deal with it by moving faster than their competitors.  Furthermore, with a market of over 1.6 billion people in China, there is always room for a few more competitors.

The number one complaint that I’ve heard from the Chinese government and companies is that Singapore companies are too slow, too careful, and too bureaucratic.  To the Chinese, the formation of JVs for a new project is a very common approach.  

However, a Singapore company would take more than six months to do due diligence on their partners, and by then, the project opportunity would be long gone.


How different is it to do business in Chongqing compared to, say, Beijing or Shanghai?

Chongqing, being an inland city, is less international in terms of business etiquette and thinking.  In Chongqing, personal trust is always placed higher than a legal contract, and a phone call will also work better than an email.  

I frequently hear Singaporean bosses complaining that their Chinese partners are not interested in working with them because they didn’t reply their email, while Chinese bosses would likewise complain to me that their Singaporean partners are not interested because they didn’t call! Many Chinese bosses don’t have the practice of communicating via email. So, educate yourself on and adapt to the cultural differences if you want to succeed.


What advice would you give to Singapore companies wanting to give it a go in Chongqing?

Be fully committed to the effort.

Many Singapore companies are half-hearted when investing in China.  Such half-hearted investments will always result in failure, thus creating a vicious cycle.  Put yourself in a potential Chinese partner’s shoes – no one, Chinese or not, will give a contract to a company that does not have a sufficiently strong physical presence in the city.  Everyone wants to be assured of after-sales service, after all.

So here's my advice:

       1) Focus on a city, and set up a reasonable outfit with sufficient resources.
       2) Look for a credible partner who can complement your business.
       3) Move fast.  

 

For more information on IMDA's efforts to help Singapore companies break into Chongqing, read this IMpact story.


Image credit:
1. Teaser image: 'Jiefangbei CBD in Chongqing' by 涔水影人 licensed under CC-BY SA 3.0.
2. Main image:  'Night scene of Jiefangbei, Chongqing' by Baycrest licensed under CC-BY SA 2.5.

 

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