Singapore’s role as an interface for European business in East Asia is pivotal. As a new hemispheric history is being written, East Asia is being woven together by a web of bilateral and multilateral Free Trade Agreements (FTAs), centered on the ASEAN. Eventually, India too will be integrated into East Asia, changing conventional geographical concepts of regions in Asia into one emerging new Asia.
Singapore,with a population of 4.24 million (2004), is the most advanced economy of the ASEAN countries. Its GDP per capita in 2004 stood at EUR 21,290 – only beneath Hong Kong in Asia and above the European Union (EU) average. The systems for health care and education are highly developed in Singapore. The literacy rate for the population stands at 94.6% (2004), with a high percentage of students obtaining university degrees.
Despite the inherent disadvantages of a small domestic economy and lack of natural resources, Singapore has established itself as one of the top trading nations in the world, and is consistently voted as one of the best business destinations. Among the 10 ASEAN countries, Singapore is the largest trading partner with Europe.
There are more than 1,500 European companies in Singapore. Many use Singapore as regional headquarters, logistics and distribution centre for the region. The German Centre for Industry and Trade, the German-Singapore Chamber of Commerce, the Singapore-British Business Council and the France-Singapore Business Council have been established to help European small and medium enterprises start-up their operations in Singapore and the region.
Singapore’s constructive role in ASEAN, its unusual stability and its regional significance make it an important partner for German foreign trade policy. The German-Singapore bilateral trade in 2004 exceeded EUR 8 billion (over S$ 16 billion). With Germany being Singapore’s largest trading partner in the EU, and Singapore being Germany’s largest trading partner in the ASEAN region, both countries continue to play a significant role on each other’s economic map. Singapore acts as the key hub for German companies planning to tap on Asia’s growth. Over 600 German companies are now active in Singapore with manufacturing facilities and/or regional offices. Singaporean companies have shown increasing interest in engaging the German market, especially in key sectors such as automotive components, medical technology, info-communications technology, and the printing sector. Fields of particularly successful cooperation include the environmental sector with the seminars organized by the Germany Singapore Environmental Technology Agency (GSETA) and the transport sector where a Bilateral Shipping Agreement (2000), an Air Services Agreement (1969) and, most recently, an MoU on Cooperation in Maritime Transport (2005) were concluded.
