Under US Pressure... Chinese IT Companies Nesting in Singapore

Tencent Relocates Some Business Units
Establishes Southeast Asia Regional Hub
Huawei Launches AI Research Institute
China Struggles to Escape Negative Image

[Asia Economy Singapore Correspondent Sujoo Seo] Singapore is emerging as a refuge for Chinese IT companies. As Chinese companies face increasing pressure to exit from the US, Europe, and India, they are turning their attention to Singapore, where regulations are relatively less strict and IT is highly developed.

According to local media such as The Straits Times on the 29th, Chinese Tencent recently announced the establishment of a Southeast Asia regional hub in Singapore. Known as the parent company of WeChat, a leading Chinese messenger app, Tencent has decided to relocate some business sectors, including gaming, entirely to Singapore to strengthen the hub.

ByteDance, the parent company of the video-sharing app TikTok, also plans to use its Singapore entity as a foothold not only for Southeast Asia but also for global expansion. Some engineers have already relocated to Singapore, and the company plans to hire an additional 200 employees related to payment services and e-commerce. ByteDance has also participated in a consortium bidding for a digital banking license in Singapore.

The rush of Chinese IT companies is closely related to their successive expulsions from countries like the US and India, citing national security threats. Singapore maintains a relatively neutral stance amid US-China tensions and actively relaxes various regulations and offers tax incentives to attract multinational corporate investments. For Chinese companies, establishing a global headquarters in Singapore helps shed the image of being a "Chinese company."

Alibaba, which owns the Singapore e-commerce company Lazada, and Huawei, which is under heavy fire from the US, have already established cloud and artificial intelligence research centers in Singapore. Haitong Securities, the second-largest securities firm in China, and Ant Group, Alibaba's financial subsidiary, have recently set up branches or are pursuing partnerships with local companies in Singapore. Chinese AI startups such as SenseTime, online travel agency Ctrip, social network company YY, and telecom group China Mobile have also already entered the market.

The Investment Management Association of Singapore (IMAS) recently stated that interest in Chinese companies entering Singapore is so high that a dedicated department needs to be established to support them. They added that the number of Chinese corporate members has doubled every year since 2018.