As a result of a crackdown at home and the strain in other main markets, Chinese tech giants are expanding in Singapore, but they may struggle to find talent. Tencent, the messaging and gaming behemoth, is building a centre, and ByteDance, the owner of TikTok, is on a hiring spree after establishing a regional headquarters, while Alibaba, the e-commerce behemoth, is investing in real estate and recruiting. As authorities tighten the screws at home over concerns about the platforms’ rising strength, tech companies are shifting their attention to booming Southeast Asian markets. Regulators have launched a blitz on the industry, slapping heavy fines on many businesses and threatening to break up large corporations with a scope that now reaches deep into ordinary Chinese lives.
Meanwhile, simmering tensions between Washington and Beijing, exacerbated by Donald Trump’s presidency’s attack on Chinese tech titans, make the US an unappealing prospect, and problems abound elsewhere. According to Rajiv Biswas, Asia Pacific’s chief economist at IHS Markit, China’s tech companies are facing regulatory pressures and sanctions from governments in other countries, especially the United States, but also other nations such as India. After a border conflict last year, India has blocked a slew of Chinese applications, and the European Union and other Western powers recently imposed sanctions in response to China’s treatment of the Muslim Uyghur minority, triggering retaliatory measures.
However, Singapore, a thriving financial centre with strong links to both Beijing and the West, has become a safe haven for tech companies, looking to grow their operations without disturbing either side. Singapore is considered to be a more neutral country in the current environment of geopolitical instability, according to Chen Guoli, professor of strategy at INSEAD’s Singapore campus.
Furthermore, long-running unrest in traditional rival Hong Kong may have lowered its appeal, though analysts point out that other factors are more likely to be at play. The influx of Chinese cash will be welcomed in Singapore, which has been hit hard by the coronavirus, and is attempting to develop itself as a technology hub. It already houses major offices of the US tech giants Facebook, Google, and Twitter, and the ByteDance recently relocated into larger offices in the financial district and launched a recruiting campaign.
According to Ajay Thalluri, an analyst with data and analytics company GlobalData, ByteDance’s posted a third of its job ads in Singapore between September and February, more than twice as many as it did in China, with an emphasis on recruiting specialised engineers. Meanwhile, Alibaba acquired a 50% stake in an office tower, where its e-commerce unit Lazada was the main tenant last year, and its subsidiary, fintech behemoth Ant Group, was granted a licence to operate a wholesale digital bank in the city-state. Alibaba is forming teams in Singapore, with major senior and mid-level job postings in talent development, product management, and legal, according to the company.
The e-commerce company, which was co-founded by Jack Ma, has been under intense scrutiny in China, with authorities cancelling Ant’s record IPO in November. ByteDance and Tencent, which announced their expansion plans in Singapore in September, say they are more concerned with increasing their businesses in Southeast Asia, a booming area with a population of 650 million people, than with preventing tensions elsewhere. Analysts claim that by expanding their footprint in Singapore, the tech giants are hedging their bets in case tensions with the West reach a new low point.
According to INSEAD’s Chen, Chinese businesses need a plan B, in case they have to break their global and domestic operations, in which case Singapore could serve as their international hub. However, hiring staff with the requisite skills is a major challenge in the city, which has a population of only 5.7 million. Technology is evolving and accelerating at a rate that far outpaces the availability of talent needed to scale, said Daljit Sall, senior director of information technology at Randstad Singapore. Singapore is attempting to attract international talent, which could create unease in a country, where the high foreign population is already a source of concern, and schools are providing courses to train students for tech employment. Nonetheless, filling these skills gaps now is always an urgent need, Sall said.
