Lee Hsien Loong
"We won't lose to China, India'
Singapore will ride on them to grow, says prime minister. Yonhap.
Nov 19, 2005

Singapore's Prime Minister Lee Hsien Loong has brushed off concerns that his city state's economy may be dwarfed by the growing economic power of China and India.

Along with services, the manufacturing sector has been one of the two main engines propelling Singapore's growth so far.

But many economists say the Singaporean economy's reliance on manufacturing may leave it vulnerable to competition particularly from China and India, which are poised as the world's manufacturing hubs armed with cheaper labour.

"We won't lose to China and India," Lee told his audience after making a keynote speech at a business gathering on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum here on Thursday.

China is huge and there is enormous competition, it is now our biggest trading partner," Lee said.

India's economy is also growing but the Singaporean economy is actually benefiting from India's growth, he said.

To avoid direct competition with China and India in manufacturing, Singapore is moving to bolster its finance and other service sectors with the aim of creating a knowledge-based economy, Lee said.

To achieve the goal, Singapore plans to invest 3 percent of its gross domestic product into research and development, he said.

"As these two economies grow, we can also grow," said Lee who took over from Goh Chok Tong who stepped down in August 2004.

Lee is the son of Singapore's founding father Lee Kuan Yew, who has still kept an influential role in the city-state's cabinet.

Singapore's economy registered high growth in 2004 on the back of a recovery from SARS-afflicted 2003, according to the APEC's 2005 Economic Outlook released here.

However, as it rebounded from a low base, there had already been early indications towards the end of 2004 of an expected moderation in 2005, the report said.

The Singaporean economy is expected to grow between 3.5 percent and 4.5 percent in 2005, it said.

However, there are a number of factors that will influence the extent of moderation in 2005, the report said.

Concerns over external demand from key trading partners, the pace of recovery of the global electronics cycle, and higher oil prices are expected to have a negative impact on the Singaporean economy, it pointed out.
Yonhap