SINGAPORE (May 27): The escalating trade war between the US and China may not be entirely bad news for Singapore. After an initial dampening as trade through the city state slows, the country could actually benefit from this global turmoil as companies relocate parts of their supply chain to the Asean region, say experts.

That movement is already evident. The US business lobby in China, the American Chamber of Commerce of China, surveyed 239 of its members from May 16 to 20 — after both China and the US raised tariffs on each other’s imports — and found that 40.7% had relocated manufacturing facilities outside China or were considering doing so.

Manufacturing will shift from China to other Southeast Asian countries, says Abhineet Kaul, senior director, consulting, public sector and government practice at Frost & Sullivan. “This is evident in both Vietnam and Cambodia, with plans being made in Myanmar, Thailand and Indonesia. This would mean more diversified trade for Singapore, which is beneficial to our economy,” he says.

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