POSTED 27 May 2019 - 10:12

How is your organisation girding itself for any fallout from the ongoing US-China dispute?

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How are you planning to manage the risks that come along with it?
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Responses

Annie Yap, CEO, AYP HR Group
17 Jun 2019 - 10:55

While the rising tension between the US and China is alarming, the impact on our organisation is, for now, minimal. Despite that, we are constantly on the watch for what could intensify the situation as the repercussions would be global.

We have been forging and sustaining strong partnerships with our partners with the same "diplomacy" mindset.

Furthermore, we are also actively training and upgrading our employees' skillsets to keep them abreast of the latest technological advancements. In times like these, we need to keep a vigilant eye and stay positive.

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David Leong, Managing Director, PeopleWorldwide Consulting Pte Ltd
10 Jun 2019 - 10:25

Whatever will be the endgame between the US and China, Singapore will likely be sandwiched and our survivability depends on how we are classified by the US when the fight line is drawn. As a business, we have to gear up for obvious conflicts.

Technically, the demand side for China's goods will unlikely be diminished as they range from daily consumables from food to plastics to electrical products, covering a wide spectrum of American everyday needs. Only China's sell-side supply chains are likely to be reconfigured to be based out of the country in non-tariff countries in South-east Asia or South Asia. This re-organisation of the supply chains is likely to benefit Singapore as a regional hub.

However we have to see what is America's larger strategy: Is President Trump's aim to cripple China's technological supremacy or to give a boost to non-Chinese suppliers? Is his government provoking a conflict or to end one? Without a more focused goal, Mr Trump risks alienating US allies, infuriating the Chinese government and raising the chances of confrontation, all to no obvious end.

Singapore prefers peace to war and looks to rationality, fairness and respect prevailing between the two giants. Without a reasonable co-existence between US and China, the world will be a poorer place with demand-and-supply-chain-tensions all around benefitting no one. The dispute causes every country and everyone to have high blood pressure.

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Zaheer Merchant, Regional Director (Singapore & Europe), QI Group of Companies
3 Jun 2019 - 10:15

The truthful answer is it's difficult (and expensive) to be girded against the fallout.

And really, what aspect of operations can you protect against when the dispute stretches across every sector, supply chain and from finance to cross-border trade, of multiple jurisdictions. We are in the process of reassessing our markets and their costs. Where possible, it'd be easier to further localise and source local. Then we assess trade zones and supply chains which are a long-term option.

If there is a need for physical inventory, then warehousing and bonded warehouses may provide some respite for long-term strategy. Lastly, where we are able to, we have sought to influence our customers' options to their benefit.

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Henry Tan, Group CEO, Nexia TS Group
27 May 2019 - 10:22

We know that the two superpowers have to be engaged in some muscle-flexing exercises to bring concessions. We have always been globally diversified across the US, Europe and Asia without specific focus on any particular market.

A number of our clients have shifted production from China to other Asian markets like Malaysia and Taiwan to shield themselves from tariffs as a result of the trade war.

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Kunalan Chakravarthy, Director, Priority Consultants
27 May 2019 - 10:17

The trade war and worsening tensions between the US and China are no doubt casting a very long and deep shadow on regional economics.

Especially for smaller enterprises in Singapore and Asean, these can be very trying times indeed. But adversity always brings about opportunity - specifically the chance to reshape and evaluate our business focus and practice is upon us. We see the Asean, India and greater Asian market opportunity as a hitherto uncharted path that requires a degree of imagination, courage or curiosity.

The Singapore government programmes and trade missions encouraging enterprises to venture into the region are worth exploring. In addition, building up the capacity and capabilities to support and grow the markets on our doorstep is critical.

Recognising the need for skills re-training and re-focus, we are looking at appropriate talent in Singapore as well as the region to support our growth.

And with the impact of the US-China dispute being global, other affected economies elsewhere are also looking for alternative markets. Where best to look than Asean?

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Toby Koh, Group MD, Ademco Security Group
27 May 2019 - 10:16

We have been affected directly since last year in our China entity. Four American clients have postponed their project starts indefinitely. At least two of them are now looking to deploy their investments into Vietnam, Malaysia and/or Indonesia.

What was telling is the fact that our clients have reacted very quickly to the heightened tensions and had brought us along to survey sites in the said countries. There is no doubt they are concerned.

The supporting industries to these clients have also taken the first moves to explore relocation in order to be close to their principal clientele base.

Ademco has missed out on projects in China but the upside is that our entities in Vietnam, Malaysia and Indonesia will likely benefit from the planned moves.

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Lim Soon Hock, Managing Director, PLAN-B ICAG Pte Ltd
27 May 2019 - 10:16

The US may lose in the trade war. China probably expected this and has been preparing for it, as one of the moves by the US to prevent it from being a competitor, or worse displacing the US as the dominant global economic power.

China has been working on reducing its dependency on the US for some years now, through investments in Latin America, Africa, India, Pakistan and Asia, and through strategic initiatives such as the Asian Infrastructure and Investment Bank, and most recently, the Belt and Road Initiative. Today's China, with a huge domestic market, has strengthened its economic resilience. China would be like another Japan, albeit much larger, and would replicate its success in many economic sectors globally. Many of us would remember the tariff wars between the US and Japan, before China's economic rise, yet Japan continues to thrive.

Businesses should continue to trade as much as possible with US companies but be mindful of the negative impact of the trade war, while intensifying efforts to engage more with China and Chinese companies for new opportunities and growth. The potential uptick may offset any downside from the US' side of the trade equation.

Singapore companies, large and small, would not be wrong to bet on both the US and China, going forward.

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Maren Schweizer, Director, Schweizer World Pte Ltd
27 May 2019 - 10:15

We cannot sit and hold our breath. Fair-weather clouds are at the horizon, yet the future will show if it's going to be rain showers or thunderstorms.

We are applying pilot crew coordination procedures in most of our family businesses for piloting through rough weather.

Standard procedures are set and trained beforehand. So, in case a contingency scenario trigger - abnormal or emergency in aviation - comes alive, we execute according to the procedures as a crew.

In aviation this concept has proven to be highly effective to prevent any accidents; in my experience this is very valuable in corporations, too. It ensures, inter alia, when to pull the trigger, immediate actions, clear roles and responsibilities, no discussions about "whys" and "whens" during the procedure as well as less emotions.

Furthermore employees recognise this and feel safer, guided by the executive team even in scenarios with tough measures, such as cost-cutting.

Obviously the achievements of the last decades are in danger as the trade conflict potentially pushes us towards a full-scale Cold War and thus could trigger a new stage of deglobalisation, or at least a division of the global economy into two blocs. These challenges and unpredictability will need to be managed and will separate the C-level wheat from the chaff. Singapore can be the "safe harbour" for data, finance, talent and technology and a trusted hub for progressive rules and regulations.

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