SINGAPORE (Kyodo) As Japan’s economic revival sparks overseas interest in doing business in the country, Japan and Singapore have launched a joint project to find corporate partners for Singaporean companies who wish to enter the world’s second-largest economy.
International Enterprise Singapore, the city-state’s trade and investment promotion agency, has told its Japanese partner, the state-run Development Bank of Japan, that it expects their “matchmaking” service to double the number of Singaporean companies investing in Japan to 140 within a few years.
Using the DBJ’s database of Japanese firms, the service aims to help Singaporean businesses that want to enter the Japanese market but are finding it hard to get Japanese partners on their own. The DBJ is also considering extending credit to Singaporean firms who want to do business in Japan but have no access to private lenders there.
The project is expected to boost Singapore’s direct investment in Japan, which has already surged 53.1 percent in 2005 from the previous year to $598 million, according to Japanese Finance Ministry data. That was 18.6 percent of the entire direct foreign investment in Japan.
Since IE Singapore and the DBJ signed a partnership accord in Singapore on July 24, they have brokered relations between four firms, resulting in two partnership deals. The accord is the DBJ’s first with a foreign government organization.
Crystal Jade Culinary Concepts Holding Pte. Ltd., the biggest Chinese restaurant firm in Singapore, and Y’s Table Corporation, a Tokyo operator of luxury restaurants, have agreed to jointly run restaurants in Japan and other parts of Asia.
“We have chosen to go into Japan because it has a huge market size and customers who have a high spending power and a passion for quality food,” Crystal Jade Chairman Ip Yiu Tung was quoted as saying in the Straits Times July 26 edition.
The second deal involves Frasers Serviced Residences Pte., a Singaporean services apartment operator. It has tied up with re-plus Inc., a Tokyo company that provides real-estate financial services, to convert a Tokyo hotel into a luxury, serviced apartment building.
Takayuki Yamamoto, the DBJ’s chief representative in Singapore, said he expects to see more deals by the end of the year, and that the number of partnerships should rapidly increase next year and beyond as Japan is likely to have a sustained economic recovery.
Japan’s current economic recovery, which began in February 2002, looks certain in November to exceed the boom from November 1965 to July 1970, the longest period of uninterrupted economic growth after World War II.
Economists are projecting moderate growth of 2 percent to 3 percent this year and the next.
“Restaurant operators, retailers, fashion houses and real estate companies are the most promising sectors,” Yamamoto said. “Consumer tastes in Japan have shifted from Western style to Asian style as they now look for a broader range of services, or new concepts.”
Since Singapore recovered from the economic effects of the SARS outbreak in 2003 and the 1997 Asian financial crisis, its robust economic growth has prompted companies to look for business opportunities abroad, especially in Japan, China, Malaysia and India.
“When you talk about labor costs and price levels, it’s better that IE Singapore focuses on China, Malaysia and India as its investment destinations,” Yamamoto said. “But we strongly feel their desire to let Singaporean companies play in a big market like Japan, Asia’s biggest.”
The DBJ has begun talks with the Malaysian Industrial Development Authority, the Board of Investment of Thailand and India’s Ministry of Commerce and Industry to set up similar programs those countries, according to Yamamoto.
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