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Chinese technology groups such as ByteDance and Alibaba are strengthening their presence in Singapore as they compete with their American rivals to dominate Southeast Asia.
Artificial intelligence start-up SenseTime, online travel platform Ctrip, social networking site YY and telecommunications provider China Telecom are also among those who have either increased their office space or are considering increasing it their numbers, according to several people involved in the discussions.
The trend takes place against a backdrop of deteriorating US-China relations and as companies in the world’s two largest economies compete for regional influence in advanced technologies.
“Southeast Asia has been a major focus for the last 18 to 24 months for Chinese companies and now Singapore has become a battleground between Chinese technology and American technology who see them both as a springboard for the region, “said Ashley Swan, Singapore-based executive director of the Savills real estate group.
ByteDance, owner of the famous video streaming application TikTok, will move this year from a shared office to much larger premises at One Raffles Quay, in the central business district of Singapore. In November, Huawei opened a cloud and AI innovation lab in the city.
As part of perhaps the most eye-catching deal, Alibaba bought half of a $ 1.2 billion skyscraper in Singapore’s central business district in May. It marked the technological group’s first international real estate purchase and the building will eventually become its headquarters outside of mainland China.
But they continue to catch up with the likes of Facebook, Google, Microsoft and Amazon, which have been in the region for much longer and continue to grow.
Southeast Asia is one of the few places where American and Chinese companies openly compete to exert influence in areas such as cloud computing. The region of 650 million people is rapidly evolving online and providing a potentially huge customer base with markets such as Indonesia, added Mr. Swan.
Facebook is building a $ 1 billion data center, its first in Asia, after moving to a new regional headquarters in Singapore in 2018. Twitter has announced this year that it will install its first Asia-Pacific engineering center in the city.
US-Chinese tensions may have “played a role” in increasing the workforce of Chinese tech companies, but more importantly, being in Singapore will help them expand their products and services in the region of in a big way “over the next few years, said Benjamin Cheong, partner at Rajah & Tann law firm.
They also have great confidence in Singapore in terms of political stability and a solid legal framework despite the higher rental costs and higher wages, he said.
The region has been a major focus for Alibaba, founded by billionaire Jack Ma, with the acquisitions of e-commerce companies Lazada and Redmart. He also invested in Tokopedia, a popular Indonesian online shopping unicorn.
Chinese venture capital firms are among the most active in the city as they increase their investments in start-ups in Southeast Asia.
Along with Silicon Valley, Singapore is home to the largest number of Chinese tech companies outside of mainland China, according to real estate company JLL.
Chinese technology groups have steadily increased their presence since entering the city state about five years ago, said Regina Lim, head of capital market research for JLL’s Asia-Pacific operations.
“They feel like it was China 15 years ago and if they were making as much money as the penetration of the Internet and e-commerce in China, it could also happen in places like Indonesia and Thailand, “said Ms. Lim.