Amid US Tensions, Biggest Chinese Tech Firms Flock To Singapore

With increasing bilateral tensions between the United States and China, the biggest tech companies from China are expanding their operations in Singapore.  

It has been reported that their presence in the city state is being increased by Tencent and Alibaba while billions of dollars are reportedly being invested there by TikTok’s owner ByteDance.

Singapore has good ties to both the US and China as it is considered a neutral territory.

Relations between Washington and Beijing are growing increasingly hostile, particularly over technology.

Earlier this week, Tencent announced that it was “expanding its business presence in Singapore to support our growing business in South East Asia and beyond”. The company describes the new regional office as a “strategic addition” to its current offices in South East Asia.

Under the Trump administration’s clampdown on Chinese apps and tech firms, Tencent’s WeChat messaging app, along with TikTok, is facing a potential ban by this month.

“Given the US-China tensions in tech and the heightening risk of decoupling, it makes sense for Chinese tech companies to separate operations in China and outside of China,” said Tommy Wu at Oxford Economics. “Singapore would be an ideal location given the city state’s comparative advantage in tech, its geographic proximity to China and as an innovation hub in South East Asia.”

The advanced financial and legal system of Singapore has for long been considered as a regional base for Western companies. Many companies have been seeking a more stable business environment within Asia after the political turmoil in Hong Kong and with Beijing imposing the controversial and sweeping national security law.

But according to Nick Redfearn, deputy chief executive at UK-based consultancy Rouse, there is another factor that makes Singapore so attractive for Chinese companies. He said that the second reason could be one of the primary ones that has made the city state such an attractive destination for so much foreign direct investment (FDI) compared to the other South East Asia countries.

“This is usually because regional headquarters, operating on behalf of parent companies, act as the foreign investor in countries such as the Philippines, Indonesia, Vietnam and elsewhere.

“This can help Chinese companies avoid the appearance of Chinese investment,” he said.

According to Redfearn, in 2020, largest regional trading partner was South East Asia overtaking the EU.

“You’ve seen Western companies (Google, Facebook, LinkedIn and many more) make it their Asia Pacific headquarters for a while now, so it’s natural Chinese companies also consider it for the same reasons. I think the recent US-China geopolitical tensions only make it even more attractive, but that’s not the only or primary reason,” Rui Ma, a Chinese tech expert and investor, added.

Another driving force is globalization, she says.  “If Western companies can be global, why can’t we? Chinese companies are very much willing to invest for the long term and are not going to be content to be left behind when it comes to future opportunities.”

(Adapted from

Categories: Economy & Finance, Entrepreneurship, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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