The strong Singapore dollar reflects fundamentals. Prime Minister Lawrence Wong: Singapore will not pursue low-cost competition.

Singapore Prime Minister Lawrence Wong attended the "DBS Asia Foresight Forum" today.

Faced with the current uncertainty of the global economy, Singaporean Prime Minister Lawrence Wong said at the "DBS Asia Foresight Forum" held today that the strength and stability of the Singapore dollar are a manifestation of Singapore's economic fundamentals. Singapore will continue to rely on stability, predictability and high added value to attract international capital, rather than following the low-cost competition route.

In response to the trend of the Singapore dollar, DBS Bank CEO Chen Shushan mentioned that Singapore has long been regarded as a safe haven for funds, which is reflected in the strong Singapore dollar and interest rates lower than the US dollar. However, many companies interested in using Singapore as a regional hub also admitted that Singapore is not a low-cost market.

In this regard, Lawrence Wong made it clear that the Monetary Authority of Singapore (MAS) will continue to implement monetary policy independently. He pointed out that the exchange rate of the Singapore dollar is determined by economic fundamentals. As long as the economy continues to perform well, the Singapore dollar can be expected to maintain strength and stability supported by fundamentals. This will also help curb imported inflation. For Singapore, reducing inflationary pressure is a very important step.

Lawrence Wong said that export companies must take exchange rate factors into consideration of operating costs, as well as other costs faced by operating in Singapore. As we all know, Singapore is definitely not the lowest-cost place in Southeast Asia. But we also know that what companies are looking for is not necessarily the lowest-cost location. What companies need is capabilities, stability, and predictability. Therefore, he believes that when discussing overall competitiveness, there are many other important factors.

Will the strong new currency weaken the competitiveness of enterprises? Lawrence Wong believes that a strong exchange rate also forces companies to continue to improve efficiency, otherwise they may lose their competitiveness. He also said that Singapore's positioning should focus on high value-added industries and the protection of intellectual property rights, as well as business centers that are not easily replaced by robots, giving full play to its own advantages and relying on the value it can provide to compete.

In terms of geopolitics and supply chain fragmentation, Stephen Wong pointed out that the global order is undergoing a profound paradigm shift. The United States has begun to redefine its global strategy, power has become more dispersed, and there is a vacuum in global leadership, which means that we will face more situations where international rules are beyond the reach and lack binding force. And small countries like Singapore will find themselves caught between the cracks. In such an environment, all countries in the world need to work together to deepen cooperative relations and safeguard international law and the multilateral system. More importantly, we need to keep trade flowing so that small island countries like ours can continue to shine.

Facing the uncertain situation of tense US-China relations and fragmented global supply chains, Lawrence Wong pointed out that to stand out, we must not rely solely on price wars, but must build a complete ecosystem through innovation and value creation, gathering the world's top enterprises, multinational companies, local players and venture capital funds to strengthen each other, so that Singapore can maintain strong competitiveness and stay closely connected with the wider world.

Chen Shushan, CEO of DBS Bank, added that the current industry chains such as semiconductor packaging and manufacturing are closely linked, but as the world situation becomes increasingly fragmented, the supply chain is undergoing profound changes, and companies often have to spend heavily to prepare "Plan B" in order to cope with extreme situations.

In this regard, Lawrence Wong agrees that companies can no longer simply pursue "just-in-time" and extreme efficiency. Therefore, Singapore's response is, on the one hand, to maintain good relations with major countries and make more powerful friends. On the other hand, it continues to invest in national defense and intimidation forces to ensure its own security, and to continuously enhance its irreplaceable value to ensure that its national interests are respected and valued by the international community.