FOCUS: Singapore firms tout state support, clean ethic in China

Asian Economic News, July 19, 2004

SHANGHAI, July 17 Kyodo

Tan Wing Ming wanted to be seen as the ''crazy Singapore guy'' as he built up a printing company here in the mid-1990s.

When clients stiffed him, Tan would take them to court over as little as 1,000 yuan (about $122) even though legal fees might run higher.

At first his local-hire sales manager did not want to help, saying collections were not part of his job. But after a couple claims a month over three years, the manager and the judge got the point.

''If you want to mess around, mess around with someone from some other country,'' said Tan, 45, general manager of the Pica Shanghai printing house, which opened in 1994. Tan now has a staff of 170 between his Shanghai plant and Nanjing office. Last year he logged a turnover of 42 million yuan.

Moral of story No. 1: The cleanliness and precision of Singapore business clashes with China's business style, which thrives on gray areas such as an inconsistent legal system. But clean can prevail.

One day a Shanghai police officer dropped in on the Crossroad Cafe and Bar. When the officer refused to quit speaking in the Shanghai dialect, owner Dave Chua of Singapore yelled and ordered him to leave.

Chua, who speaks standard Chinese but not the Shanghai dialect, and who never figured out why the police came, later asked the Singaporean consulate what happened. He got a piece of precious advice.

''It was when I first came here and didn't have any personal relations, the restaurant was full and the public security came,'' said Chua, 50. He said the consulate helped him apologize and advised him that ''you don't want to yell at police here.''

Chua would also find his government helpful in getting licenses for his five restaurants, which average 200 tables apiece. Back in Singapore, the government had nudged him toward China with an offer of loans to match expenditures.

Moral of story No. 2: The Singapore government, with an unusually large presence in Shanghai, gives practical China-related aid to businesses, on request.

Singapore businesses can and must leverage their clean business habits and tight interaction with the home government to compete with larger and, Singaporeans say, more nimble Asian business communities around Shanghai.

About 5,000 Singaporeans live in Shanghai and another 3,000 live in surrounding cities such as Suzhou and Wuxi, comprising China's largest Singaporean community, most of which is affiliated with the 12,000 mainland China-based Singapore businesses.

They chose China for language and culture familiarity and the Shanghai area for its business friendliness and relatively transparent government, though they wish Chinese officials would provided more detailed information to businesspeople.

Singapore has invested $40 billion in China and become Shanghai's fourth-largest investor, according to the Shanghai Singapore Business Association.

Singapore's trade with Jiangsu Province, which includes Suzhou and Wuxi, surged 37 percent in 2002 and was expected to go higher in 2003. Singapore Airlines added a fourth direct Shanghai flight in March. Singaporeans began investing in Shanghai only about 10 years ago.

But the Singapore community is not big enough to rely on itself for clientele. Tan and Chua, for example, both depend on local business.

Meanwhile, expatriates from the city-state of 4.1 million complain that their counterparts from Hong Kong and Taiwan coordinate deals among themselves by rigging bids while Singaporeans wait years to turn a profit by following international rules of ethical business.

But while clean business practices have stalled certain investments in China, Chinese who understand the cleaner style respect it, business leaders say.

''In just 35 years, Singapore has become a model for China to emulate,'' said Jack Chia, International Enterprise Singapore's international operations director in China.

Crossroad Cafe and Bar, for example, serves Singapore food so authentic that Chua imports fish and spices and employs two Singapore-born chefs for 20,000 yuan per month. Most foreign-food restaurants hire local chefs and buy all local fish.

Although private businesses grumble about perceptions of favoritism toward government-linked companies, they acknowledge state assistance as an edge in getting ahead in China, where the less transparent business environment complicates starting a business.

The government-run IE Singapore rents rooms behind its Shanghai office as business incubators and offers location advice or China market research for less money than private consultants.

The Singapore Economic Development Board taxes income at 10 percent, down from 22 percent, on ''approved services'' in China, according to IE Singapore. And China has agreed to let Singaporeans in visa-free, facilitating business transactions.

A big push now is to make Singapore businesses cooperate instead of compete, Chia said. When Singaporeans call with who's-who questions, advice is free, Chia said.