SM Goh Chok Tong at the Singapore Chinese Chamber of Commerce and Industry's 56th Council Installation Ceremony

I am pleased to witness the Installation Ceremony of the 56th Council of the Singapore Chinese Chamber of Commerce and Industry (SCCCI). I congratulate the Council members on their appointment.

Changing The Way We Grow Our Economy And Our Businesses

In 2009, when the 55th Council was installed, the members had the difficult task of helping to lead the Chinese business community through the global economic crisis. Today’s installation ceremony is held in much happier circumstances. Most of your members would have benefited from Singapore’s economic rebound and this year’s forward‑looking, “grow and share” Budget.

But even as we celebrate the successes of the past year, the external environment is becoming more complex. While the outlook for Asia is sunny, that for the advanced economies is cloudy. There, the governments have to struggle with high unemployment, weak housing markets, and high public and private debt. Moreover, much of the Middle East, where most of the world’s oil comes from, is in political and civil upheaval. The unfolding events there will have grave geopolitical and economic implications. In addition, perhaps because of climate change, natural disasters have occurred more frequently and in greater intensity. The catastrophic earthquake and tsunami in Japan is an example. Such events have an economic impact globally, besides high human cost.

Nevertheless, the prospect for Singapore remains bright. We expect the economy to grow by 4% to 6% this year but we will have to make the effort to achieve it. This growth is not going to be handed to us on a silver platter. We will have to cut down on our reliance on cheap foreign labour and pay higher Foreign Worker Levy. We have to make changes to the way we grow our economy and our businesses, in particular, our productivity.

This is essential to sustain long term growth. At the minimum, we need to raise our productivity by 2% to 3% every year. We have doubled the National Productivity Fund to $2 billion and made significant enhancements to the Productivity and Innovation Credit Scheme. Companies have more incentives than ever to improve their productivity levels by restructuring their operations and upgrading the skills of their workers. This will be painful in the short term, but will benefit them in the medium to long term. In the past, they could rely on cheap and plentiful foreign workers to boost their output and bottom lines. But this model is not sustainable. That is why we have raised the Foreign Worker Levy across all industries and provide incentives for businesses to raise their productivity – a carrot and stick approach, you may say. Some people believe that that the Foreign Worker Levy will be reversed if the economy slows down. But don’t bank on it. I would like to reiterate here that the government is determined to reduce the dependency on foreign labour and raise the productivity and incomes of Singaporeans. The government will also work closely with industry associations and business chambers such as the SCCCI to help their members become more competitive by improving their business models and raising their productivity levels.

SCCCI – Leading The Way

It is heartening to see that the SCCCI is leading by example in many other ways. Last year, members of the council voted to do away with what remained of the clan-based representation system when electing leaders. Voting will be based on factors such as professional and business interests. SCCCI now has a broader base of council members with business experiences and expertise from sectors as diverse as the chemical and pharmaceutical industries, chinaware and F&B. This is the right direction for SCCCI, and is the culmination of reforms and changes that have taken place since 1993. I am also glad to see that SCCCI is actively renewing itself and carrying out succession planning. Out of the 55 members that comprise the 56th council, 10 of them are new faces. Other changes introduced last year to the council included capping the age of those serving in the council at 70 years.

SCCCI should also not forget its roots, traditional ties and cultural values. It is these ties and networks that have enabled the SCCCI to establish a robust business network in China. Long before Singapore established formal diplomatic relations with China, SCCCI was already forging business linkages with Chinese companies and organising business missions to China for its members. Today, the Chamber’s ties with China continue to help give our local enterprises an advantage in pursuing business tie‑ups.

Through the Singapore Chinese Chamber Institute of Business, SCCCI offers training programmes to Singapore companies. This equips them with the necessary skills and knowledge to venture into the China market. Late last year, SCCCI established its first overseas office in Shanghai. Singapore businesses keen to further expand their external operations and gain even deeper inroads into China can now tap on this additional support. I encourage Singapore companies to actively explore business opportunities in key Singapore government projects in China, such as the Sino-Singapore Tianjin Eco‑City.

Growing Globally Competitive Enterprises

Trade associations and business chambers are key government partners in helping Singapore enterprises globalise. Firms willing to expand abroad will find many new opportunities for growth, especially in Asia. To strengthen their capabilities and help companies take full advantage of overseas expansion opportunities, the Government recently committed $850 million in grants under the Enterprise Development Fund (EDF) over the next five years. This is a substantial increase of about 45% from the previous five-year tranche. SCCCI’s member companies can tap on such government schemes to further upgrade their capabilities and increase their regional competitiveness.

In the case of SCCCI, I am pleased to note that apart from China, you are also helping local businesses to expand into other emerging economies. I would like to highlight India as a country which you should devote more resources to. India’s economic growth model is not the same as China’s but it also offers ample opportunities if you understand it. It is good that SCCCI is working closely with the Singapore Indian Chamber of Commerce and Industry (SICCI) to organize joint trade missions to India. I would like to encourage you to reach out to business chambers and associations in India, like the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI). They can be helpful partners as you venture into India.

Conclusion

In closing, let me extend my congratulations to the new council. I wish the 56th Council of the SCCCI every success and I look forward to the Chamber’s continuing role in helping our local companies sharpen their competitive edge and expand internationally.