My view of the success of Singapore

Recently, Singapore has become a hot topic, but most people may have only heard of its status as an international financial center with a population of a few million. Many people even think of it as just a tourist destination dubbed the “Garden City”. However, little did they know that since its founding in the 1960s, Singapore has almost changed its industrial track every decade, while continuously upgrading the old track in all aspects, and ultimately turning these industries (some of which are already sunset industries in our eyes) into internationally influential leading industry bases.

In the 1960s, the maritime industry was developed, creating a several kilometers long and highly efficient container terminal coastline. To this day, Singapore port remains one of the world’s largest ports, and an undisputed international maritime logistics center. In recent years, in order to vacate precious city center waterfront land, Singapore has reclaimed land in Tuas, in the west, extending the coastline by more than 30 kilometers, all for use as higher-standard terminals, initiating a massive project of relocating the port terminals from the city center.

Geographically speaking, Singapore port is not in the best location in the Malacca Strait. However, with advanced hardware facilities, efficient management mode, and clean business philosophy, Singapore port is favored by the international shipping industry. It is said that many international merchant ships would detour to Singapore port for supplies.

In the 1970s, the petrochemical industry was developed, creating the Jurong Island petrochemical center. This small island, which constantly reclaims land and expands its area, covers only 32 square kilometers, but it has gathered nearly a hundred of the world’s top petrochemical companies, such as ExxonMobil, BASF, Shell, DuPont, and Sumitomo Chemical. When I arrived in Singapore in 1998, there were rumors that the daily crude oil processing capacity on Jurong Island exceeded that of Sinopec in the same year.

Recently, Singapore has become a hot topic. However, most people may have only heard of its status as an international financial center with a population of several million, and many people’s impression of it is just a tourist destination named the “garden city.”

Little do they know that since its founding in the 1960s, Singapore has almost switched industries every ten years, while continuously upgrading old industries in all aspects, ultimately turning these industries (some of which are already sunset industries in our eyes) into internationally influential leading industry bases.

In the 1960s, maritime shipping created a several-kilometer-long efficient container port coastline. Today, the Port of Singapore is still one of the world’s largest ports, and an unquestionable international maritime logistics center. In recent years, in order to release valuable city-center coastal land, Singapore has reclaimed land in the western Tuas area, extending the coastline by more than thirty kilometers, all for the purpose of building higher-specification ports. This has launched a massive project of relocating the port terminals from the city center to the west.

Geographically, the Port of Singapore is not the best location in the Strait of Malacca. However, with its advanced hardware facilities, efficient management model, and clean business philosophy, the Port of Singapore is favored by the international shipping industry. It is said that many international merchant ships are willing to detour to Singapore for supplies.

In the 1970s, the petrochemical industry created the Jurong Island Petrochemical Center. This small island, which has constantly been reclaimed and expanded, with an area of only 32 square kilometers, has attracted nearly 100 of the world’s top petrochemical companies, such as ExxonMobil, BASF, Shell, DuPont, and Sumitomo Chemical. When I arrived in Singapore in 1998, it was rumored that the daily crude oil processing capacity of Jurong Island exceeded that of Sinopec at that time.

High-end petrochemical products have earned Singapore a lot of foreign exchange, and petrochemical by-products are also fully utilized. For example, most of Singapore’s domestic electricity supply comes from diesel power generation. It may sound luxurious, but the cost control is very good. In Singapore, whether it is industrial or residential electricity costs, they are only slightly higher than those in mainland China and far lower than European costs.

Located 150 meters below the seabed of Jurong Island, Singapore has built an underground oil storage tank with a capacity equivalent to 600 Olympic-sized swimming pools. Crude oil from around the world is refined on Jurong Island, which has allowed this small country with no natural resources to have a continuous source of energy.

In the 1980s, the semiconductor industry almost synchronized with TSMC. To this day, 14 silicon wafer factories, 6 non-silicon wafer factories, 26 packaging factories, and more than 40 large-scale integrated circuit design companies have gathered in this small country.

In recent years, a significant branch of the high-level talents in China’s semiconductor industry has come from Singapore. The recent international situation and geopolitical issues have brought about a second upsurge in Singapore’s semiconductor industry.

In the 1990s, the biopharmaceutical industry attracted the world’s top five pharmaceutical companies to set up production bases and R&D centers in Singapore. I am not a professional in this industry, and I know very little about it, but it is said that in recent years, many drugs used globally during multiple pandemic crises were produced in Singapore.

In the 21st century, the new generation information technology, nanotechnology, aerospace, and artificial intelligence industries have been booming. Large research and development centers such as Procter & Gamble, Seagate, Applied Materials, and Rolls-Royce Aero-engine have all set up their R&D centers in Singapore. During this phase, Singapore successfully completed the gorgeous transformation from low-end manufacturing to actively assisting high-end manufacturing with R&D.

In 2004, SynCo Nano Singapore was born in this era of great times. We were honored to participate in the landing and development of most of Singapore’s top-level hard science and technology production and R&D projects during this period, which trained our technical team and made us become the most powerful commercial operation third-party laboratory and auxiliary R&D institution in Southeast Asia.

At the same time, Singapore has world-class institutions in basic fields such as medical and education. My alma mater, the National University of Singapore, has been ranked as the top university in Asia by QS for several consecutive years.

Despite its developed economy and industry, Singapore has managed to protect its natural environment very well. This small city-state of just over 700 square kilometers has significant areas of original forests and protected wetlands in close proximity to the urban areas. Occasionally, otters, monkeys, wild boars, rhinoceros birds, and large parrots can be seen roaming the streets, providing eye-catching scenes.

Singapore’s tourism industry is also renowned, and its national carrier, Singapore Airlines, has been ranked the world’s best for several consecutive years. Singapore, a land-scarce country, is even aggressively developing agricultural technology, with a goal to achieve self-sufficiency in food production of over 30% by 2030.

There have been many reports on the above topics, so I won’t go into further detail. Instead, I’d like to share my perspective on Singapore’s technology and finance.

Singapore encourages companies to invest in leading research and development, and multinational corporations’ research centers, such as those mentioned earlier, are highly welcomed by the Singaporean government. During the early stages of less mature company R&D, the government takes the lead in establishing research institutions to guide the market and provide temporary support for the development of emerging industries.

Speaking of the government’s role in leading research and development, one must mention the Singapore Agency for Science, Technology, and Research (A*STAR), as well as its affiliated research institutions.

The Agency for Science, Technology and Research (A*STAR) in Singapore has 14 affiliated research institutes. These institutes are not isolated entities, but rather engineering and technology research institutions established at a certain period of time to support the development of specific emerging strategic industries in the country. For example, the Institute of Chemical Engineering & Science (ICES) specializes in chemical engineering and technology research, supporting the country’s strong petrochemical industry; the Singapore Institute of Manufacturing Technology (SIMTech) specializes in advanced manufacturing engineering technology research, supporting the country’s precision manufacturing and later aerospace industries; the Institute of Biotechnology & Nanotechnology (IBN) specializes in biotechnology and nanotechnology research, supporting the country’s huge biomedical and nanotechnology industries; and the Institute of High Performance Computing (IHPC) specializes in high-performance computing, big data processing technology, and artificial intelligence research, supporting the country’s next-generation information technology and later artificial intelligence industries, and so on.

From 2001 to 2004, I worked at ASTAR IME (Institute of Microelectronics) and deeply experienced the close integration between Singapore’s government research institutes and the local industry. It was here that I laid the foundation for my later entrepreneurial technical accumulation and business model. During my entrepreneurial journey, from a seed-stage start-up to a towering tree, and ultimately giving back to Singapore’s semiconductor industry, the different support strategies provided by ASTAR at different stages were all classic (if I have time in the future, I would like to write a complete story about the entire Shengke Nanotechnology growth process and ASTAR, but I will not elaborate on it today).

Given that Singapore’s research institutes are established in close proximity to industrial demand, their birth date carries a distinct historical mission of “serving industrial demand”. According to the global technological development, their research direction is continuously adjusted based on the development needs of industrial technology. Some research institutions even disappeared due to the decline of certain technological products. For example, the initial purpose of the Data Storage Institute (DSI) was to serve Singapore’s large local hard drive storage industry, but in recent years, the hard drive industry has become saturated or even declined, and DSI was subsequently disbanded.

Interestingly, with the rise of locally commercialized research institutions, the Singaporean government research institutions will actively choose to withdraw at the right time. For example, as the commercial operation of the IME spinoff company AMF becomes more and more mature, the Institute of Microelectronics (IME) in Singapore proactively withdrew from the silicon photomask manufacturing field. With the rise of the commercialized analysis laboratory of Shengkong Nanotechnology, the Singaporean Agency for Science, Technology and Research (A*STAR) proactively merged the analysis laboratories of 14 research institutes, reduced the procurement budget of government research institute analysis laboratories, and gradually withdrew from the market competition of analysis and testing, leaving the market to the pure commercial operation of Shengkong Nanotechnology. Cultivating long-term sustainable market-oriented research and development investment not only supports local start-ups but also saves government budgets, which is an extremely wise move.

Now let’s talk about my understanding of Singapore’s financial industry.

As the world’s third-largest international financial center and China’s largest source of foreign investment, Singapore has too many laurels in the financial field.

An open market environment, diversified economic structure, neutral international status, and stable political system make international capital particularly favor Singapore. Unlike Hong Kong, Singapore’s financial industry is based on its strong industrial foundation. From another perspective, if domestic financial institutions are unwilling to provide funds for the domestic technology industry, it will inevitably lead to the neglect and shrinkage of the industry, and the hollowing-out of the financial industry will be inevitable. When I founded Shengkong Nanotechnology in Singapore in 2004, starting from 20,000 SGD, it has become the largest third-party semiconductor analysis laboratory in Southeast Asia. So far, we have not undergone any equity financing in Singapore. In addition to the accumulation of our own profits, the three major local banks in Singapore (UOB, DBS, and OCBC) have given us tremendous financial support. In China a few years ago, domestic banks were generally reluctant to touch high-tech instrument loans, but the three major local banks in Singapore have been playing with such loans for the past 20 years. As long as the enterprise qualification meets the requirements, there are no obstacles to the loan. In recent years, domestic banks in China have gradually started to make breakthroughs in these areas of technology loans. It is a blessing for technology startups, and good things are never too late.

In 2020, Singapore’s per capita GDP was $58,900, ranking sixth globally. The manufacturing sector accounted for 21% of the GDP, which is rare for a country to have a manufacturing sector that contributes over 20% to its GDP. Furthermore, Singapore’s manufacturing sector is highly valuable, mainly consisting of highly competitive high-tech manufacturing industries. In this process, the support provided by Singapore’s financial institutions played an essential role.

In addition, Singapore’s subsidy system is worth mentioning. The Singaporean government’s subsidy policy is extremely transparent and is published annually in the budget, which can be easily accessed online. The subsidies for enterprises are primarily based on the number of eligible employees and are given in the form of unified subsidies for salary or skill enhancement training expenses. At first glance, it seems like a “scatter approach.” However, in my 19 years of running a business in Singapore, I have never seen anyone from government departments such as the Commercial Affairs Department, the Inland Revenue Authority of Singapore, or the Ministry of Finance. I have also never written any project application documents or participated in any project defenses.

The Central Provident Fund Board (CPF) of Singapore holds all employee CPF contribution data, while the Inland Revenue Authority of Singapore (IRAS) holds all employee personal income tax contribution data. Therefore, this “scatter approach” subsidy system has almost no loopholes. Companies only need to apply online, and the back-end system will process it promptly. A few days later, the subsidy will be deposited into the company’s account. I have never met anyone from the government in this process, nor have I encountered any disputes.

In fact, the Singaporean government is well-versed in the “fairness of subsidies.” Excellent enterprises are those that have fought their way out of the cruel market competition, rather than relying on subsidies. Therefore, subsidies are not something that can be argued over. Any selection system that has subjective evaluation criteria that are not quantifiable may result in unfairness or even corruption, with some being selected and others being excluded. The subsidy policy based on large data of CPF and tax contributions is the most indisputable and subtly guides enterprises to legally and compliantly contribute CPF and taxes and invest in employee skill training to improve the overall national skill level.

(Note: From scarce professions, glimpse into Singapore’s high-quality economic structure.)

In 2004, I founded Winstar Nano Singapore Pte Ltd in Singapore, and in 2012, I settled in Suzhou Industrial Park as part of a Sino-Singapore joint venture project. Singapore is one of the countries with the best business environment in the world, and the investment environment in Suzhou Industrial Park is also among the best in China. Recently, someone was amazed and asked, “Mr. Li, how did you make such good choices?” In fact, wise companies will choose to develop in places with the best business environment. I have always reminded all startups on various occasions that when faced with hesitation and confusion about location selection, the answer is simple: if you are strong enough to have your own ecosystem, you can choose to settle in any city and even negotiate with the government. However, most startups need a complete ecosystem to drive their development. Startups in this state should not sacrifice themselves for government subsidies, as this would be fatal to the survival or long-term sustainable development of the company.

In the early 1998s, there was a saying that Singapore’s goal was no longer to be among the top four dragons in Asia, but to create an “Eastern Switzerland.” It may have sounded like just a dream at the time. But after 25 years, with various scandals surrounding Switzerland, Singapore has quietly risen to become the undisputed “Eastern Switzerland.”

Technology and finance are two swords for the high-quality development of manufacturing. R&D activities without the support of manufacturing entities have no soul, and a manufacturing industry without technological progress and R&D iteration will degenerate into a declining traditional industry. Without the high-quality manufacturing industry as the main body, the financial industry will also be hollowed out and reduced to an empty tower. After studying, working, and starting a business in Singapore for 25 years, I have a deep understanding of the logic behind the success of this tiny country. This article focuses on the upgrading and transformation of Singapore’s manufacturing industry over the past half century and its transition to new tracks, and focuses on technology and finance. With my personal experience, I hope to inspire more people to think. China and Singapore’s upgraded “comprehensive, high-quality, forward-looking partnership” is a welcome development for the wise.

Name: Li Xiaomin


Li Xiaomin received his Bachelor’s degree from Peking University and Master’s degree in Microelectronics from the National University of Singapore. He is currently the Chairman of Wintech-Nano (Suzhou) Co., Ltd. He has applied for multiple invention patents, published more than 80 scientific papers, and co-authored two books.

In 2001, he joined the Singaporean Research Institute and founded Wintech Nano-technology (Singapore) Co., Ltd. in 2004. In 2012, he founded Wintech-Nano (Suzhou) Co., Ltd. It has now become the largest semiconductor chip analysis and testing service platform and R&D center in China. He proposed the new concept of “Labless,” which separates the “necessary but non-core” R&D process from the industry and creates a new independent industry track. Li Xiaomin is recognized as a famous entrepreneur who has influenced the industry pattern for half a century in the latest book “Head of Youth Dream” by Singapore’s senior journalist Zheng Mingshan. In May 2021, he was featured on the cover of the May issue of Singapore’s “Time Wealth” magazine, becoming the youngest cover person since the publication’s inception and receiving high praise and recognition from the industry.