Monday, March 19, 2007
SINGAPORE FEELS CHINA'S PULLING POWER
By Florian Gimbel in Hong Kong
Tuesday, March 20, 2007
Multinational technology companies are increasingly moving their Asia-Pacific headquarters from Singapore to Shanghai in a reflection of the pulling power of the China market.
A new survey by Russell Reynolds, the US executive search firm, shows that almost half of the 100 Western technology companies questioned still have their regional base in Singapore.
However, the report suggests Shanghai will see much faster growth in the next few years, with increasing numbers of companies relocating from Singapore.
One head of human resources at a US technology company was quoted as saying: “We are gradually moving our headquarters northward, but there is still a strong presence in Singapore, as the company was given a tax holiday to locate its headquarters there. If we move too early, we will have to repay the tax.” The findings are likely to add to pressure on policy makers in Singapore, which has pinned its hopes for future economic growth on biotechnology and high-end financial services such as fund management and private banking.
Last year, the number of Shanghai-based regional headquarters of foreign firms jumped by one-third to 144. That number includes Alcatel, FedEx, General Electric, General Motors, Johnson & Johnson, Rhodia Chemicals, and Roche, according to Chinese government tallies.
What draws many multinationals to Shanghai is the fact that China has become their biggest market or production centre, overall or internationally. In addition, companies are keen to demonstrate their commitment to China, a move that may help them impress Beijing regulators and sceptical shareholders, according to the Russell Reynolds report.
A growing number of foreign companies however are complaining about fast- rising operational costs in Shanghai, where senior expatriates face spiralling housing costs, a dearth of international schools and relatively high income tax rates.
“Some Shanghai-headquartered companies might not have rushed in quite so early had they been aware of the cost issues,” said Louise Goss-Custard, a Shanghai-based Russell Reynolds executive.
“Some local executives are now facing tough questions from their global headquarters.” Air pollution, which is an increasingly important factor in the talent war between Hong Kong and Shanghai, has little or no influence on the location decision of technology company headquarters, according to the report ¶ 4:27 PM
Tuesday, March 20, 2007
Multinational technology companies are increasingly moving their Asia-Pacific headquarters from Singapore to Shanghai in a reflection of the pulling power of the China market.
A new survey by Russell Reynolds, the US executive search firm, shows that almost half of the 100 Western technology companies questioned still have their regional base in Singapore.
However, the report suggests Shanghai will see much faster growth in the next few years, with increasing numbers of companies relocating from Singapore.
One head of human resources at a US technology company was quoted as saying: “We are gradually moving our headquarters northward, but there is still a strong presence in Singapore, as the company was given a tax holiday to locate its headquarters there. If we move too early, we will have to repay the tax.” The findings are likely to add to pressure on policy makers in Singapore, which has pinned its hopes for future economic growth on biotechnology and high-end financial services such as fund management and private banking.
Last year, the number of Shanghai-based regional headquarters of foreign firms jumped by one-third to 144. That number includes Alcatel, FedEx, General Electric, General Motors, Johnson & Johnson, Rhodia Chemicals, and Roche, according to Chinese government tallies.
What draws many multinationals to Shanghai is the fact that China has become their biggest market or production centre, overall or internationally. In addition, companies are keen to demonstrate their commitment to China, a move that may help them impress Beijing regulators and sceptical shareholders, according to the Russell Reynolds report.
A growing number of foreign companies however are complaining about fast- rising operational costs in Shanghai, where senior expatriates face spiralling housing costs, a dearth of international schools and relatively high income tax rates.
“Some Shanghai-headquartered companies might not have rushed in quite so early had they been aware of the cost issues,” said Louise Goss-Custard, a Shanghai-based Russell Reynolds executive.
“Some local executives are now facing tough questions from their global headquarters.” Air pollution, which is an increasingly important factor in the talent war between Hong Kong and Shanghai, has little or no influence on the location decision of technology company headquarters, according to the report ¶ 4:27 PM
