Singapore Must Embrace AI as China Has, Says SM Lee — And the Stakes Are Higher Than They Look

Senior Minister Lee Hsien Loong ended a five-day China visit on May 22 with a message that was part economic counsel and part quiet warning: Singapore cannot afford to watch the AI revolution from a comfortable distance. The country that shook hands with a humanoid robot in Shanghai this week needs to move — and move with the same conviction that has made China’s technology push one of the defining economic stories of the decade.

Context: A Small State at a Large Crossroads

Singapore has spent decades threading a needle that most countries don’t even attempt. It maintains deep ties with Beijing, equally deep ones with Washington, and has turned that ambiguity — formally called “strategic autonomy” — into an economic asset. The model works when the world’s two largest economies each see value in a neutral, well-governed node at the heart of Asia’s supply chains.

That model is under stress. Singapore’s Ministry of Trade and Industry downgraded its 2025 GDP forecast to a range of zero to two percent, citing weakening external demand and escalating US-China trade tensions. Against that backdrop, a five-day trip by Senior Minister Lee Hsien Loong to Guangxi and Shanghai — his first China visit as Senior Minister in a year and a half — carries more weight than a standard diplomatic itinerary. It signals that Singapore’s leadership sees the next chapter of the China relationship not as a risk to be managed, but as an opportunity to be seized. Provided, Lee made clear, that Singapore doesn’t sleepwalk into it. ASEAN Briefing

The Core Development: What Lee Said, and Why He Said It in Shanghai

Speaking to Singapore journalists at the Jing An Shangri-La in Shanghai on May 22, Lee described the bilateral relationship as grounded in shared economic interest rather than ethnic affinity — arguing that when China prospers, opportunities open up for Singapore and its businesses. That framing is deliberate. It rejects the idea that Singapore’s 74-percent ethnic-Chinese majority creates an automatic strategic alignment with Beijing, and replaces it with something more durable: mutual commercial benefit. The Star

The Singapore-China AI opportunities dimension of the visit came into sharpest relief a day earlier, when Lee toured the Shanghai Municipal Humanoid Robot Innovation Incubator on May 21. He was served tea and given a health check — both performed by AI-powered humanoid robots — at the government-backed facility, which is home to some of China’s most advanced physical AI systems. The imagery was chosen carefully. These weren’t demonstration robots in a trade-show booth. They were production-ready machines operating at scale, the product of a national industrial push that Beijing has been financing for years. Asia News Network

Lee’s takeaway was direct. He told reporters that other countries — China in particular — are advancing quickly in AI, that Singapore has to move forward as well, and that “we also have to learn from others and engage with others and have the confidence that if they can do it, we can do it, too. It is not something which is easy to do. The Chinese are not finding it easy to do either. But they know that it has to be done, and it is happening on a nationwide scale.” The Star

That last phrase is the one worth pausing on. “Nationwide scale.” China’s AI deployment isn’t a cluster of well-funded startups hoping for adoption. It’s a state-directed mobilisation backed by industrial policy, manufacturing infrastructure, and a tolerance for disruption that democratic societies find harder to achieve. Lee knows this. He’s also signalling that Singapore needs a comparable clarity of purpose — not the same methods, but the same seriousness.

The Shanghai incubator that Lee visited has plans to set up a Singapore branch office as early as October 2026, using the Republic as a hub for Chinese robotics companies expanding internationally. Unitree, one of eight firms housed at the incubator, is already scheduled to conduct large-scale trials at Singapore’s Punggol Digital District later this year. The pipeline from Chinese lab to Singaporean testbed is forming in real time. Asia News Network

The Analytical Layer: Singapore as a Relay Node — and Its Limits

Why Does Singapore’s Gateway Role in Chinese AI Actually Work?

Singapore’s value to Chinese technology companies isn’t primarily geographic, though location helps. It’s institutional. The rule of law, deep capital markets, English-language contracts, and frictionless access to Western investors make the city-state the most efficient place for a Chinese company to become, in practice if not in name, a global one.

This dynamic was crystallised in December 2025, when Meta acquired Manus — a Chinese AI firm — for $2 billion after Manus redomiciled to Singapore six months earlier, rebranding itself as Singaporean to sidestep US restrictions on Chinese tech acquisitions. The “China-shedding” playbook — relocating to Singapore, severing formal mainland ties, accessing Western capital — has become a recognised strategy among Chinese AI entrepreneurs facing severe domestic valuation constraints. The Interpreter

What does Singapore gain? The ASEAN-6 currently captures 14.5 percent of global FDI, and 65 percent of that flows to Singapore alone. A significant portion of that capital arrives because multinationals and Chinese companies alike need a jurisdiction that works in both directions. Singapore is, as one industry observer put it, “the only place where the full spectrum of global AI comes together in one room.” Nation Thailand

Yet the relay model has a structural ceiling. The Manus deal, celebrated as a Singaporean success, prompted Beijing to launch a regulatory investigation within days of the announcement, raising questions about whether this escape route will remain open for companies hoping to replicate the approach. Beijing is watching. If the redomiciliation trend accelerates, it will trigger countermeasures — and Singapore, caught between two regulatory regimes, will face pressure from both sides. The Interpreter

Lee’s message in Shanghai implicitly acknowledges this. Singapore can’t simply be a pass-through; it needs genuine AI capability of its own. The government earlier this week revealed plans to support 10,000 small and medium-sized enterprises in adopting AI over the next three years — a domestic mobilisation effort that runs in parallel with the invitation to Chinese robotics firms. The strategy is: absorb China’s know-how, develop local applications, build an ecosystem that’s complementary rather than dependent. BigGo Finance

Implications: Trade Flows, Tech Transfers, and the Ageing Dividend

How Could Singapore Benefit from China’s Growing Market Demand?

Singapore benefits from China’s market growth through three channels: as an export platform for goods and services flowing into China; as a regional hub for Chinese firms internalising globally; and, increasingly, as a testbed and application market for Chinese technology — particularly in healthcare, logistics, and financial services. The ageing population angle that Lee mentioned in his media session points to a fourth: co-developing solutions for demographic challenges both countries share.

The macro numbers are supportive. ASEAN-China bilateral trade reached a record $984 billion in 2024, and the first quarter of 2025 alone suggests the figure could exceed $1 trillion for the full year — with trade in electronics and electrical machinery a particular beneficiary for tech-linked economies including Singapore. FDI into Singapore hit a record $192 billion in 2024, a 5.6-percent increase on the prior year, with the Economic Development Board projecting inflows could exceed $200 billion by 2028 on the back of technology and sustainability investment. Nation ThailandASEAN Briefing

Those figures represent the upside. The downside is dependency. Lee was explicit: as long as Singapore maintains partnerships with all the major economies in the world, it can manage any dependencies and avoid over-reliance on a single partner. The hedge is diversification — keeping the US, EU, India, and Japan in play even as the China relationship deepens. The Star

The robotics dimension opens a specific new corridor. Singapore’s healthcare sector, constrained by labour shortages in an ageing society, is a natural first market for Chinese humanoid robots. The Shanghai incubator’s general manager, Rong Guoqiang, said he sees enormous demand for humanoid robots across factories, medical facilities, and educational institutions in Southeast Asia, and wants Chinese companies to pair with local Singaporean firms to “create innovative services” rather than simply transplanting products. That co-creation framing — if it holds — is exactly the kind of technology transfer that generates lasting economic value rather than a one-off sales arrangement. Asia News Network

Competing Perspectives: The Risks Lee Didn’t Dwell On

Lee’s framing in Shanghai was optimistic, grounded in opportunity. It’s worth applying pressure to that optimism.

The geopolitical environment has worsened materially since Singapore last updated its China strategy. US export controls on advanced semiconductors have tightened repeatedly since 2022, and any Singaporean firm that deepens its integration with Chinese AI infrastructure will face increasing scrutiny from Washington. Singapore’s status as a trusted node in Western supply chains rests, partly, on the perception that it doesn’t become a back-channel for technology transfer to adversaries. That perception is fragile.

There’s also the question of whether China’s AI dominance is as settled as it appears from a Shanghai robotics showroom. Analysis from ISEAS-Yusof Ishak Institute argues that China is the best-positioned economy to achieve mass implementation of “embodied AI” first, relying on a largely self-contained technology stack and an extensive manufacturing ecosystem. Yet the same analysis notes that US-China rivalry is reshaping Southeast Asia’s tech alignment — and small states that lean too visibly into China’s orbit may find Western partners reconsidering their commitments. ISEAS-Yusof Ishak Institute

Within Singapore, there’s a subtler tension. The urgency to embrace AI at Chinese speed runs up against the social contract that has sustained public trust in Singapore’s governance: measured change, careful sequencing, protection for workers whose jobs are displaced. DBS, the Republic’s largest bank, announced in early 2025 that it was cutting 4,000 temporary roles due to AI — the CEO said publicly it was the first time he was struggling to create jobs to replace those being automated. Embracing AI at “nationwide scale” doesn’t resolve the distribution question; it accelerates it.

A Closing Synthesis

Lee’s Shanghai visit distils a tension at the heart of Singapore’s strategic position. The city-state has prospered by being indispensable to everyone — a neutral clearinghouse in a divided world. That indispensability now requires it to become a genuine AI capability centre, not merely an AI transit hub.

The robots in Shanghai weren’t there for ceremony. They were there to make a point: China has moved from ambition to deployment, from policy announcements to machines that brew tea and take your pulse. Lee’s message — that Singapore must match that confidence, if not the scale — is less an invitation than an imperative.

Whether a city of six million can replicate the conviction of 1.4 billion is a question the robotics demonstrations couldn’t answer. But the alternative — standing aside while the region is reshaped by others’ choices — has never been the Singaporean way.