THIS WEEK’S TOPIC: What impact, if any, will China’s private-sector crackdown have on Singapore’s businesses and economy?
It’s important for us to first understand the reasons for China’s recent crackdowns. China is currently into its 14th five-year-plan which runs till 2025. During this time, the Chinese government plans to “pursue common prosperity” and prevent the “disorderly expansion of capital”. This is the main reason for the widespread crackdown on various sectors.
So far, the crackdowns have wiped off over US$1 trillion in the value of the affected companies. These measures are bound to affect Singapore’s businesses and economy at some level. China has been Singapore’s largest trading partner and Singapore has been China’s largest foreign investor since 2013.
Singapore also became China’s largest foreign direct investment destination country since 2019. So the link is clear – China’s continual crackdowns will result in more economic value being wiped off from the affected firms, thereby directly impacting companies here with trading or investment ties with those affected firms.
Mario Singh
Chief Executive Office
Fullerton Markets
