France in Singapore
French-Singaporean relations are excellent and dense in numerous fields. They are now maintained within the framework of a common declaration on strategic partnership, signed on 18 October 2012, during the official visit of the Prime Minister in Singapore.
The President of the Republic of Singapore, Mr Tony Tan, visited France from 17 to 23 May. This visit took place as France and Singapore celebrate the 50th anniversary of the establishment of their diplomatic relations this year. France is one of the first thirteen countries which recognized the independence of Singapore in 1965.
1. About Singapore
Former British colony, the city-State became independent in 1965 after being part of the Malaysian Federation from 1963 to 1965. Parliamentary democracy characterized by great political stability, it benefited from an almost uninterrupted economic dynamism. Since its independence in 1965, Singapore experienced unprecedented success: average growth was of 6.8% per year since 1980 and the living standards reached those of a modern and developed country. Its GDP per capita exceeds 55 100USD for a population of 5.4 million people. Singapore’s success is based on a strategy of integration in international trade and a proactive economic policy aimed at enhancing the attractiveness of the country regarding foreign direct investment (FDI).
With its strategic position at the heart of Southeast Asia, the city-state strives to create an environment conducive to development and growth of businesses and talents: first-rate infrastructure, very effective services, a secure legal framework, a good quality of life. The economy is based on three main pillars: manufacturing and construction (a quarter of GDP), logistics and communications, financial services (third financial center in Asia in terms of assets under management) and business services. Singapore is a very open economy (foreign trade accounts for three times the GDP) characterized by the weight of re-exports, closely related to the importance of the port (2nd in the world for transshipment of containers) The city-state occupies the top spot of the World Bank’s ranking regarding ease of doing business and the 2nd in terms of competitiveness according to the World Economic Forum. Singapore has therefore established itself as an anchor point in Southeast Asia for a growing number of businesses: nearly 480 companies are now based in Singapore and represent most major industries.
Leading financial center of Southeast Asia, Singapore joined in 2009 the "white list" of OECD regarding tax havens. Member of the Financial Stability Board, of the Basel Committee on Banking Supervision and co-founder of the Global Governance Group to the United Nations, bringing together 28 non-G20 countries wishing to defend their position, Singapore was also one of the five non-G20 countries invited by France under its presidency in 2010.
2. Bilateral trade
If our trade with Singapore recorded a significant contraction in 2013 and 2014 (respectively -18.4% and -8.5% yoy), it slightly increased in 2015 (+ 0.7%). This near-stabilization of our trade with the city-state was due to the 6.1% growth in exports (driven by sales of electronic components, aircraft and chemicals and cosmetics) and 9.1% decreased of our imports. Our trade surplus with Singapore experienced a 24.9% yoy improvement in 2015 to over 2.8 billion EUR, the 3rd in the world by excess amount (4th in 2014).
Our trade with Singapore amounted to EUR 7 875 million in 2015, an amoun 0.7% higher compared with 2014. This result is explained by the contraction of our imports from the city-state (-9.1% yoy), which amounted to EUR 2.5 billion in 2015, and up 6.1% in ga in our exports to Singapore, which reached 5.3 billion EUR. Singapore is the third French bilateral surplus in 2015 to EUR 2.8 billion (up 24.9% compared with 2014), after the United Kingdom (12.2 billion EUR) and Hong Kong (3.7 billion EUR).
FDI plays a central role in the development of the Singapore economy, as the consequence of a deliberate choice from the city-state to balance its narrow market with a strong attractiveness towards foreign firms, multinationals and innovative SMEs. The European Union (and the Netherlands in particular) is still the largest investor (23%), far ahead of the United States (15%) and Japan (11%). FDI inflows in Singapore increased by 4% between 2013 and 2014 to 67.5 billion USD (UNCTAD data). The city-state still attracts more than half of the incoming FDI in the whole ASEAN, largely benefiting from its position as a financial center and regional trade hub regional, as well as the quality of its infrastructure and its very favorable fiscal policy (17% corporate tax rate). For example, France has invested EUR 422.8 million in Singapore in 2014 (after two consecutive years of disinvestment, including repatriation of FDI of EUR 487.1 million in 2013). Other French FDI destinations in ASEAN are mainly Thailand and Indonesia(Respectively EUR 447.2 million and EUR 290,5M in 2014) and new opportunities for French companies seem to open up in the less developed economies of the region that are Burma, Cambodia and Laos, who see their degree of openness increasing with the implementation of the ASEAN Economic Community (AEC) since 1st January 2016.
If the French FDI stock in the city-state was around 11.4 billion USD in 2014 (France is only the 7th European investor behind the Netherlands, the United Kingdom and Germany in particular - Singstat data), it increased by 13.2% yoy, due to an expansion of back office and R & D activities of French companies in the city-state. The stock of French FDI in ASEAN totaled € 14.2 billion, up 16.4% yoy compared with 2014 (data Bank of France).
On the contrary, Singaporean companies disinvested from France, up to -1 billion EUR in 2014, after an investment of EUR 840 million in 2013, resulting in a stock of Singaporean investment in France reaching EUR 500.5 million in 2014 (down 66.7% compared with 2013 *), representing forty settlements, mainly in real estate, hospitality, IT, food processing and basic industries. * Note: FDI figures appears underestimated and should be interpreted with great care, since data comes from an annual survey.
4. Foreign Trade Advisors
Chosen for their expertise and international experience, "France Foreign Trade Advisors”, or “Conseillers du commerce extérieur de la France” (CCEF) are appointed for three years by decree of the Prime Minister on the proposal of the Minister for Foreign Trade. For 110 years, they offer their experience on a voluntary basis to the French economic presence in the world.
Their missions revolve around three main axes:
- Advise the government: the CCEF monitor specific issues of foreign trade. At the heart of international markets and experts in their field, they bring information to their attention, as well as advice and recommendations so that the government can make informed decisions (http://vimeo.com/43619331)
- Help companies: CCEF share their expertise with companies, especially SMEs, that they sponsor and accompany in their international development. They bring their knowledge of the sector, help SMEs better understand all aspects of an export strategy and mobilize their resources to facilitate their international development (http://vimeo.com/43619330)
- Train and assist the employment search process: CCEF help young people who want to succeed internationally. They offer their expertise on the various markets and help them in their job search. They work in universities, schools and training institutions. The CCEF personally support the international volunteer program (VIE)