The German industrial conglomerate Siemens has announced significant investments in factories in China and Singapore as part of its strategy to diversify in Asia while expanding in the Chinese market, despite geopolitical tensions. Chief executive Roland Busch revealed at a news conference in Singapore that Siemens plans to invest €2bn globally this year, starting with a factory expansion in China and the establishment of a high-tech plant in Singapore.
Siemens’ focus on China stems from its recognition of the country as a driver of technological innovation. However, the company is also mitigating risks associated with heavy reliance on China by choosing Singapore as a hub for exports to South and Southeast Asia. Busch explained, “We avoid the term ‘decoupling’ because it implies a dichotomy. Instead, we are diversifying by looking for opportunities to serve multiple markets, thus increasing our resilience.”
In Singapore, Siemens is building a new €200mn plant that will employ 400 people and produce digital twin and intelligent hardware technologies for companies in the region. Meanwhile, in Chengdu, China, the conglomerate plans to invest €140mn to expand its plant by 40%, catering to local growth opportunities in China for China. Additionally, Siemens is establishing a research and development center in Shenzhen to accelerate the development of motion control systems. These high-tech investments in China are driven by the region’s early adoption of new technologies, particularly in digitalization and high-tech manufacturing.
However, Siemens’ China strategy has faced criticism from investors, who express concerns about overreliance on the country. The German government has also called on the nation’s industry to diversify, highlighting China’s growing threat to international security. It was reported that Busch initially intended to establish the Singapore plant in China but changed plans due to protests from the supervisory board.
Addressing the tense relationship between the US and China, Busch acknowledged the race for global dominance and the resulting tensions. Siemens’ diversification strategy has been largely influenced by the pandemic, which exposed the risks of heavy dependence on specific countries or companies. “The world is now focused on reducing these dependencies,” said Busch.
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