Singapore’s Trade and Industry Minister Gan Kim Yong said on Friday that companies should continue to focus on China and explore opportunities to expand their business in the world’s second-largest economy.
China briefly entered deflationary territory late last year and is still struggling with a debt-laden real estate sector.
Rating agency Fitch Downgrade its outlook Moody’s downgraded China’s sovereign credit rating to negative on Wednesday, following a similar move last December.
Fitch noted that public finances face risks as the economy faces growing uncertainty as it shifts to a new growth model.
However, Gan told CNBC’s “Squawk Box Asia,” “If you look deeper, when I engage with local businesses and people, I think it gives me the feeling that China’s fundamentals are strong.”
He pointed out that China has a huge domestic market and a highly educated and competitive labor force.
China’s investments in infrastructure will also put it in a good position for long-term recovery, Gan added.
“So I think at the same time, they’re going to run into headwinds in the near future, but I think the fundamentals remain strong over the long term.”
‘Work with anyone in the White House’
Asked about Singapore’s relationship with the United States given tensions with China and the prospect of Donald Trump’s re-election, Gan said Singapore “will always work with whoever is in the White House”. To reiterate It was enacted by Singapore Prime Minister Lee Hsien Loong in early March.
Gan pointed out that Singapore and the United States have a “very long-standing relationship”, underpinned by the US-Singapore Free Trade Agreement.
The free trade agreement signed with Singapore in 2004 was the first free trade agreement signed between the United States and a country in the Asia-Pacific region, and the only free trade agreement signed with ASEAN countries.
Gan said that between the United States and Singapore, “we believe in a rules-based trading system and we will continue to promote regional, international and bilateral cooperation.”
He noted that both countries have developed new cooperation platforms, such as in key emerging technology areas, and said these institutions will be around for the long term no matter who occupies the White House.
“But I must also say that no matter who becomes the new president, there will be new challenges, new uncertainties, new disruptions in the future. I think this is the essence of our business and economic development.” Gan said.
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