Singapore, which has a population of 5m to China’s 1.35 billion, remains a source of inspiration for some Chinese reformers. On the eve of the latest third plenum, held earlier this month, the Development Research Centre (DRC), a government think-tank, advertised an ambitious set of reform proposals, including an overhaul of China’s inefficient state-owned enterprises (SOEs). Simply privatising these companies remains out of the question for China’s leaders. But there are alternatives, and Singapore provides one.
The DRC’s plan named Temasek, a holding company for SOEs in Singapore, as a potential model. It was created in 1974, when it inherited 35 companies from the finance ministry. Its inaugural portfolio contained several of the firms that made Jurong eye-catching, including its shipyard and its birdpark (pictured). In the four decades since, Temasek’s portfolio has both multiplied (it is now worth S$215 billion, or $172 billion) and gone forth: only 30% of its holdings remain in Singapore itself. Its domestic holdings are concentrated in what Singapore calls “government-linked companies” (GLCs), such as Singapore Airlines (of which it owns 56%) and SingTel, a telecoms company (52%).