Ms He Ting Ru asked the Minister for Trade and Industry in light of the COVID-19 situation in China (a) whether the Ministry anticipates any disruptions in key supply chains for Singapore; (b) if so, which areas are expected to be harder hit; and (c) what measures are being taken to address these potential disruptions.
The Minister of State for Trade and Industry (Ms Low Yen Ling) (for the Minister for Trade and Industry): Mr Speaker, the COVID-19 situation in China is currently evolving. While we do not anticipate any major sustained disruptions in the supply chains of essential goods to Singapore, in the short term, we may see some localised disruptions in China’s production capabilities and supply chains.
However, over the past few years, companies in Singapore have strengthened their business continuity plans as well as supply chain resilience plans, and we encourage them to continue doing so, to mitigate supply chain disruptions.
Mr Speaker: Ms He Ting Ru.
Ms He Ting Ru (Sengkang): I thank the Minister of State for the response. I note that we do not really anticipate any major disruptions, but I also would like to ask whether we do anticipate any short-term or medium-term price or financial impacts from any disruptions, short-term disruptions, out of this.
Ms Low Yen Ling: Mr Speaker, I thank the Member, Ms He Ting Ru, for her supplementary question. Like I have mentioned in my main answer, we have studied the situation very closely and in fact, since a few months back.
The current COVID-19 situation in China is still unfolding – like what Minister Ong Ye Kung and Minister Iswaran mentioned in their Ministerial Statements yesterday – as China continues to take steps to open their borders and transit to a new normal.
MTI and all our economic agencies, including EDB, which is working with MNCs, with suppliers, with partners in China, as well as Enterprise Singapore working with Singapore companies with operations in China and also suppliers in China, we are working very closely with the companies via EDB, Enterprise Singapore and also the industry and trade association.
Our sensing is, at this juncture, we are not expecting any major sustained, disruption in the supply chain of goods from China to Singapore. However, in the short term, that could be some localised disruptions in China’s production capabilities and supply chains.
Let me share a little bit more. For example, we work very closely with companies with suppliers and operations in China and they shared with us that as they look into 2023, and as they look at the situation unfolding in China, they do not anticipate any major supply disruptions in China.
Our key imports from China includes electronics and that is not disproportionate to the world. Electronics, machinery, metals and metal products, which are primarily used by the businesses in manufacturing and construction sector. Since early 2020, we have been working with these two sectors – in fact, with many other sectors – to future-proof themselves against supply chain disruption risks.
They have done a few things. One, they have strengthened their business continuity plans. They have also stepped up their supplier diversification and build up their inventory buffers to better prepare for any supply chain disruption. They shared that they have prepared for such scenarios because just like in the last three years, from time to time, as long as any province in China detect a COVID-19 situation, there will be a shutdown. So, they have prepared for such situations and they are fairly confident that they will be able to tide through this period.
Ministry of Trade and Industry
10 January 2023