Robson Lee is a lawyer with Singaporean firm Shook, Lin & Bok. He specializes in corporate finance with a focus on China. Lee spoke to CHINA ECONOMIC REVIEW about the current state of the economic relationship between the two countries.
Q: Has the performance of Singaporean investment in the mainland improved?
A: At home, Singaporean investors are more accustomed to the rule of law. Whereas in China, business is done according to guanxi and face. These two things are fundamentally the antithesis of good corporate governance. But I think the first wave of investments that went into China gave Singaporean firms a lot of experience, and thanks to that they probably understand things about the Chinese mindset a lot better than before.
Q: Could you give an example of this?
A: The Singapore government learned several invaluable lessons from the Suzhou township project in 1994. For one, the communication hierarchy here is different. If something is decided in Beijing, it may not get passed down to the lower levels. I think Singaporean decision-makers now understand how to achieve things more expeditiously. Over the last year, better investment decisions have been made.
Q: What are the new areas for investment growth by Singaporean firms in China?
A: I think water treatment and waste treatment are getting quite important, and the food industry remains a very strong sector of interest. You will also find Singaporean investors going into Hangzhou and investing in the animation industry. The last thing is shopping malls. You have CapitaLand setting up huge shopping malls and also residential projects. In the pipeline is a foreign board on the Shanghai Stock Exchange. That is going to be an attractive route for Singaporean companies looking for an alternative way to list.