SINGAPORE - Lockdowns in China have led to some shipment delay for imports required by the manufacturing and construction sectors here, but firms have largely been able to cope, said Minister of State for Trade and Industry Low Yen Ling in Parliament on Monday (May 9).

The Republic's essential food and healthcare supplies have not been significantly affected as Singapore's reliance on China for these items is relatively low, she added.

However, global inflationary pressures are likely to be exacerbated in the near-term, with the lockdowns further straining supply chains already under stress from the Russia-Ukraine conflict, she noted.

Sengkang GRC MP He Ting Ru had asked about the impact to supply chains and rising prices in Singapore, in view of Covid-19 outbreaks prompting several cities in China - including Shanghai - to be placed under partial or full lockdowns involving strict movement restrictions for local residents.

The controls have hit the Chinese economy hard, sparking factory closures and supply chain disruptions as Beijing continues to double down on its Covid-19-zero approach.

Reduced economic activity in a major global supply node like China will inevitably lead to the likes of delays in shipping time and in manufacturing orders being fulfilled, but cargo is still able to leave from the Shanghai port and where necessary, is also being redirected to other Chinese ports or other transport modes such as by air, said Ms Low.

"Industries in Singapore will feel the impact of the supply chain disruptions to varying degrees, depending on their dependence on imported supplies from China and their contingency planning," she said.

Ms Low said that many companies have strengthened their business continuity and supply chain resilience plans - such as holding more inventory buffers and diversifying their supplier sources to mitigate the impact of disruptions - since the outbreak of Covid-19.

Singapore's key imports from China include electronics, machinery and metals - mainly intermediate goods required by the manufacturing and construction sectors here.

"Based on feedback from companies in these sectors, we understand that most of them have been able to cope with the delays in shipments from China thus far," said Ms Low.

She added that Singapore's reliance on China for essential food and healthcare items is relatively low, and that the cities from which these are imported are not classified as high-risk ones for now.

"The Government will continue to adopt a multi-pronged approach of import diversification, local production and stockpiling, which will help to minimise supply shocks," said Ms Low.

Still, with China's lockdowns occurring in tandem with the war in Ukraine, near-term global inflation is likely to worsen, she noted.

"How the effects play out over the longer term will depend on the scale and extent of the lockdowns and their impact on China's economy," said Ms Low.

Rising cost pressures and a higher frequency of supply disruptions have prompted some businesses to hold more inventory as a buffer, which require more working capital.

To support companies' cashflow needs, the Government had announced at Budget 2022 an extension of the Temporary Bridging Loan Programme and the enhanced Trade Loan Scheme, up to September 30 this year.

"In addition, the three rounds of tightening of Singapore's monetary policy over the past six months should also help moderate the pass-through effects of external inflationary pressures," said Ms Low.

To help lower-income households cope with higher prices, Social Service Offices (SSOs) will provide at least six months of support for new ComCare Short- to Medium-Term Assistance clients who apply between April and September this year.

Those already on the temporary financial support scheme can also have their assistance extended for at least another three months, she added.

"The SSOs will continue to exercise flexibility to provide those in need with financial assistance and support," said Ms Low.