Dear Valued Customers,
Welcome to our first letter for the year 2022! On behalf of everyone at 3E Accounting, we wish you and your families a very Happy New Year.
We’re very pleased to start 2022 on such a positive note with several highlights to share that have been happening across Singapore, Malaysia, and Hong Kong.
Despite the Pandemic, Singapore’s Economy Still Records 7.2% Increase
Singapore has never failed to disappoint when it comes to proving what a robust and obviously strong economy it is. Amid the pandemic, the country’s economy still records an increase of 7.2% in 2021, a remarkable accomplishment indeed.
This increase is a mark of just how well the economy is rebounding from its 2020 recession. Back in 2020, the economy dropped to 5.4%. This was Singapore’s first annual contraction since 2001 and the lowest on record since it gained independence.
The Ministry of Trade and Industry (MTI) released its November predictions last year and the predictions were in line with the figures that were released on Monday. Singapore’s Ministry of Finance lowered its GDP growth prediction for 2021 to 7%. For the whole year as well as the fourth quarter, all sectors of Singapore’s economy saw year-over-year increase. Except for construction, all sectors improved on a quarter-over-quarter seasonally adjusted basis in the fourth quarter.
Following a surge of new infections caused by the more contagious Delta type, Singapore declared the commencement of its transition to living with endemic COVID-19 last year. Its immunisation programme was expanded to include booster injections and other age groups, as well as new ways to combat the coronavirus’s spread.
Manufacturing Activity in Singapore Expanded in July for the 13th Month In A Row
The manufacturing sector in Singapore also had some good news to share. Activity in this sector has risen to its highest level yet since December 2018, expanding for the 13th month in a row. For entrepreneurs who plan to start a company in Singapore, manufacturing is definitely one sector to keep your eye on.
This positive growth happened despite the tighter Covid-19 Delta variant restrictions. The higher PMI reading in July was attributed to the rapid expansion of new orders, factory output, employment, new exports, and inventory. The strong performance that Singapore records in manufacturing and several other sectors is a stark contrast to what is happening with the rest of its Asian neighbours. However, at this stage, the manufacturing sector continues to stay resilient in the face of adversity.
Malaysia’s Government and Agencies Plan to Keep Growing Ecosystems to Attract Investments
Malaysia’s government and agencies have plans to keep growing the local ecosystems in a bid to continue attracting investments. This is in line with the Government’s latest strategy in the National Fourth Industrial Revolution (4IR) policy. The policy is set to drive digitalisation, which means that there is a need to continue growing ecosystems in order to attract investments.
This was reiterated by the Prime Minister’s Department. Malaysia’s digital investment arena is the perfect ecosystem for intrepid entrepreneurs who want to launch a business. Agencies like the Malaysia Digital Economy Corporation (MDEC) play a crucial role in growing and nurturing sustainable ecosystems.
The Digital Investment Office (DIO) is a new collaborative launch between MDEC and the Malaysian Investment Development Authority (MIDA). DIO is set to play a very pivotal role, with endorsement from 4IR and the National Council on the Digital Economy. For any entrepreneur who is thinking about starting a business, the digital investment arena is one to consider for sure.
Starting a business in Malaysia is easy when you have the right team of professionals at your side. If you would like to explore this option, come and talk to our 3E Accounting experts.
Hong Kong’s Economic Exports Value Up by 16.5% in September
Hong Kong also had some good news to share as it saw the value of its economic exports rise to $441.8 billion. From the same month the previous year, this was a 16.5% increase. The value of imported goods went up by 23.5% too during this same period. This was an increase of 0.3% and 1.2% for exports and imports respectively compared to the 3rd quarter earnings from last year.
With these figures on hand, the Hong Kong government has a positive outlook on the economic situation moving forward. The value of merchandise that is exported continues to expand steadily in September. This is despite the higher comparison base, according to its Government. With the global economy on track for recovery, external demand should remain supportive looking ahead.
Even More Benefits to Be Reaped, Thanks to International Trade Law
With the new international trade law implemented, there are even more benefits in store for Hong Kong. It has always been hailed as one of Asia’s top business hubs, and the international trade law is only going to make things better.
Right now, the CISG has 94 signatories. This includes more than half of Hong Kong’s top trading partners based on the overall trade value. In addition to that, the Government also launched the Belt and Road Initiative. Around 45 percent of nations and areas involved in the Belt and Road Initiative are also CISG contracting partners. This means that the CISG’s extension to Hong Kong provides for a standard legislation to regulate the vast majority of Hong Kong enterprises’ foreign sales transactions.
Hong Kong businesses must be knowledgeable with and capable of using the CISG as the guiding guidelines for their sale of goods contracts since it ensures a level playing field. This would also eliminate the issue of choice of law. Doing business in Hong Kong just became a lot easier without having to deal with multiple commercial law regimes.
Until next time, stay safe everyone.
Director, 3E Accounting Group
Read More in our E-Newsletter January 2022.