South Korea'S Export Competitiveness: Critical To Overcoming The: Fill & Download for Free

Question: “Is China the reason why Taiwan's economy has been a slow growth or stagnation for the last 10 years?”Answer: In a sense, yes.You see, one of the common impression in the west is that somehow Taiwanese, HKers, Singaporean or South Koreans are super-Asians who worked economic magic to achieve their current status.That reality is much different. The economic development of a nation/area is heavily impact by geopolitics and shifts in regional economic development. The smaller the nation/area, the more vulnerable they are.The tldr version is that much of Taiwan’s rapid growth from 1970 to 1990s has to do with a growing mainland China, but once China develops, its domestic industries actually out-competes and overtook Taiwanese industries’ market share.Historically, the four Asian tigers: Taiwan, Singapore, Hong Kong and South Korea certainly weren’t always advanced economies.Taiwan didn’t start to development until 1960s, where Jiang managed to kill quite a lot of local landlords to initiate his own land reform. This is on top of the people and money he brought to Taiwan when he lost the war against CCP. Aid from US also played a factor which is for the purpose of establishing a foothold near China. Taiwan’s economy really took off in the 1980s, where trade with mainland China injected large amount money, goods and resource into the economy.Taiwan GDP - Gross Domestic Product 1988The key year is 1973. Do you know what happened then? Nixon’s visit to China, of course.Singapore is, in fact, initially ejected from Malaysia due to a number of reasons.History of Singapore - WikipediaSingapore GDP | 1960-2019 Data | 2020-2022 Forecast | Historical | Chart | NewsIn fact, its economy isn’t great for quite a while after independence.Singapore started taking off in the 1990s, where China gradually reached its “world factory” status. The trade between China and rest of the world means Singapore is a premium position to take advantage of the trade as a port of exchange.List of importing markets for a product exported by SingaporeList of supplying markets for a product imported by Singapore(Singapore is small country where export close to the size, sometimes even bigger than its GDP.)Hong Kong is a fishing village back in early 20th century. The reason for its flourishing economy most people know actually comes from cold war.As PRC formed in 1949, it set out to secure its territory. Since much of the old colonial power’s holdings in China is in the Chinese heartlands. The CCP has to choice, but to stand against the European/US powers. The Russians, on the other hand, went through the revolution to become USSR. Although the Chinese and Russians have border conflicts as well, it is much further up north. So the sensible choice to standing with USSR against European/US.This is becomes especially true after Korean war. This means direct trade between China and Europe are not possible due to politic divide during cold war.However, unlike the Russians, who share borders and conflicts with western European powers. The Chinese are much further away and doesn’t actually have strategic conflict with Europe. This means although China and Europe can’t trade openly, they actually don’t mind trading. This where Hong Kong came in, much of the trade between Hong Kong and China, Hong Kong with Europe is actually just trade between China and Europe. Of course, this also promoted many Europeans to setting up factories in Hong Kong to take advantage of the mainland China market.South Korea is a bit different from the other three, mostly because it is much bigger than other three and as the result, more resilient. More importantly, as a decent sized nation, South Korea actually has a better spectrum of industrial base than Taiwan, Hong Kong and Singapore.South Korea Nominal GDPHowever, as the result, it also have to go through a longer initial build-up phase comparing to the other three. Just like very large nations like China has to spend even more time to build-up its base infrastructure. It is similar to momentum built up of a physical object, the weight you are, the slower the build up under the same force, but once you started, you also can’t be stopped so easily.In South Korea’s case, for much of the cold war, North Korea actually has better economy and living standard comparing to South Korea due the USSR economic system supplies much more resource to North Korea and its method of cooperation of specialized countries means North Korea only have to develop in limited numbers of fields comparing to the South Koreans. However, once USSR collapsed, North Korea’s economy lost a critical component and it has been in the dumps ever since (the sanctions certainly played a part in that as well). In comparison, South Korea’s more diverse industrial base means it could survive better.In Taiwan, Hong Kong and Singapore’s case, China played a critical role in their economic development. However, as the Chinese industry develops, the role and relationship changes.In Hong Kong’s case, normalization of relationship in the 1970s means China and Europe can now trade directly with each other. Although Hong Kong has advantage in infrastructure and first comer status, the limitation of its geographical area, as well as lack a powerful central government backing it up eventually means its competitive advantages corroded and much of its trade is more diverted into other Chinese port cities. Why go through the middleman when you can deal with the customer directly?Singapore is less impacted than Hong Kong. This is because China traffic still go through Southeast Asia and unlike Hong Kong, there isn’t two dozens of nearby ports with good infrastructure to replace it.Taiwan is impacted in a different way. Unlike Hong Kong and Singapore, which rely on trade and exchange, Taiwan actually has its own industry and it mainly took advantage of the mainland China’s large market in the 1980s. However, as the domestic Chinese industry grows, the better supply chain, resource and more consistent policy and development plan in mainland eventually started to overcome Taiwan’s initial advantages.Nowadays, Taiwanese companies directly faces competition from mainland. So a curious phenomenon started to develop. You see, the way Taiwan calculates GDP is actually different from lots of the countries.For example, China’s GDP calculation is purely on production in Chinese territory, so it basically tallies the assets and service produced on Chinese oil (in the agriculture, industrial and service sector) and add them together.US runs a consumption+export-import equation, which inflates the data somewhat due to the nature of the service consumption, but still in line with assets within the country.Taiwan, instead, runs a strange method that tallies the revenue of all companies with its headquarter in Taiwan and count those revenue as part of the Taiwan GDP.What does this mean? Well, many of the Taiwanese factories owners have choose to setup their factories at mainland to take advantage of the supply chain, market and resource. They may also setup shop in some other countries, like Vietnam, India or even US. These companies make their stuff outside Taiwan, sell their stuff outside Taiwan and pay their taxes outside Taiwan, but somehow they are counted as part of Taiwan’s GDP.This means places outside Taiwan, mainland China in particular, is where much of Taiwan’s GDP growth actually taking place. So if you are a Taiwanese that lives in Taiwan, you are going to see aging infrastructure, stagnate salary despite growth in GDP, because the growth actually took place somewhere else.The stagnant of the Taiwan economy is due to outflow of Taiwan industrial other place. Since mainland China is a major destination, so in a sense, China is responsible for the current stagnant of Taiwan’s economy. Of course, much of Taiwan’s development opportunities comes from mainland China in the first place.I think I will also talk a bit about South Korea. Unlike the other three, China didn’t become South Korea’s biggest trading partner until well into 2000s. My understanding is that unlike Hong Kong/Singapore/Taiwan, South Korea is still in the “taking advantage of China’s economy growth” phase until very recently. More specifically, although the South Korea industrial spectrum did shrink due to China’s expansion, its pillar economy, which is electronics and semiconductors actually flourished in the past two decades since this field is particular high entrance and favors a first comers. So overall, South Korea’s growth is actually better than what it would be.However, that is set to change as China itself is branching into semiconductors. The Chinese initially started to venture into the market in late 1990s, but it didn’t make too much progress until 2010s. The reason is that in semiconductor market, the first comer gets the bigger customer base, can setup standards and protocols. Both of which greatly aid in developing newer and better products, which further feeds into the first comer advantage. As the result, the Chinese companies have to scrap at bottom of the market and bid their time.That kinda got change recently with Trump’s war against Huawei. In response to the tech ban from US, the Chinese government poured a large amount of investment into the domestic industry. The exit of US industries from Chinese market also created a hole for Chinese industrial to grab and more importantly, US even forced South Koreans to pull some of their products out of the Chinese market. (Trump’s tech ban means South Korean factories using US equipment can’t sell to Chinese industries as well.) Suddenly, South Korea’s first comer’s advantage is useless, because you are forced out of the market.So in the next decades or so, we may gradually see similar stagnation of South Korea economy.

No.Reasons are simple enough:1. Semiconductor is extremely important for both military use AND manufacture-based civilian economy2. Semiconductor at this point can not be circumvented or replaced by anything else3. China is actually making progress, however laughable these progress might be, but progress never the lessSemiconductor is one of most sophisticated things human civilization ever came up with(some basic details later). The bar of self-reliant on semiconductor is therefore very very high, on par, if not surpass jet engines, which China also struggles to catch up with major industrial powers.While processors and other semiconductor products constitutes largest import (double of what mainland China spend on petroleum import as of 2018!), the reason why China is keep pouring resources into semiconductor industry is that China doesn’t look at semiconductor industry in pure commercial terms. China consider semiconductor as a critical part of national security that has to completely self reliant.There are two “national security” angles. First, majority of modern weapon / weapon systems contain some electronic parts, from missiles, radars, to something as simple as land mines, you can’t build a competitive weapon system without it. Further, even in the civilian world, as long as a nation choose a manufacturing-oriented economy, it can’t avoid electronic parts which differentiate products made today versus product made in the past (think washing machines made in the 1950s vs washing machine made today).Since semiconductors constitute a such critical part of entire manufacturing sector, the consequence of having foreign made semiconductor parts being cut off by foreign powers can be devastating. China got a taste of it in 2018 when US banned semiconductor processor to ZTE, a company of 75,000 employees and 16 billion USD in annual revenue, almost went under overnight. Not that China is specially vulnerable. If US do this to Sweden and Finland, Ericsson and Nokia will go down as fast as ZTE, as ALL telecom equipment companies in the world are hopelessly depend upon American made chips.(I got a feeling those who wear MAGA hat and attending Trump’s rally have no idea THIS is an example of what makes America so great…)Unlike let say internal combustion engine, or landline phones, or credit card payment system which there is a path to “leap frog” over existing technology, there is no alternative for electrons+semiconductor-metal based computing devices as of 2019 and its immediate future.China’s struggle to gain a foothold in semiconductor industry is a fun story itself. In order to understand how far China has gotten, one need to understand a bit about semiconductor thus understand why there is only a handful of countries on earth can do this.Warning: TLDR background and a bit history for non-Engineering major. If you are an Engineering major, you can either skip it or let me know errors as my understanding in this area is also limited.If you want to make a pattern, let say, draw a happy face on a piece of copper plate, you could use a steel-blade knife painstakingly carve it. If you want to make this process less muscle-intensive, you could cover the copper plate with a layer of wax, then use a knife to remove the wax in a pattern you wanted, then, spray the copper plate with a layer of acid. The part which wax was removed is now being eating away by the acid which you just spread on, thus, a happy face emerges. This process is called “etching.”(above: example of dyi copper etching at home)Semiconductor such as CPUs are made in similar manner. What makes it so hard to make CPU than drawing a happy face on a copper plate are several folds:1. instead of a copper plate, you need a piece of silicon plate. In the industry, it’s called a “wafer.” What make this silicon wafer so special is that in order for silicon to exhibit semiconductor property (i.e. act like a copper wire stuck in an electric outlet in some condition, acting like a piece of robber which insulate electricity in some other condition), the silicon itself need to be extremely pure. In fact, silicon wafer is the purest thing human ever produced in human civilization, period, with purity around 99.9999999%. The high purity requirement is something most people can’t quite fathom, as nothing on earth is actually “pure” by nature yet the word “pure” has been abused through out different human civilization (The metal also need in “crystal form,” think “crystal” as “snow” and non-crystal as “ice.” when we talk about solid water.).This is also the reason why information revolution happened in the late 20th century instead of late 19th century, as people didn’t have the knowledge to make silicon with such high purity in such large quantity until 1950s (Not bad for a company which makes typewriter and staplers: IBM) . Last time I checked, five companies in the world controls 94% of the total market in this “pure” silicon wafer industry.2. Instead of using wax and acid in that copper plate example, all sort of very toxic and exotic chemicals are being used in this process. As one can imagine, unlike let say software source code or shape of an iPhone which people can copy easily, these exotic chemicals are VERY difficult to make and more importantly, extremely hard to reverse engineering them.3. Instead of a happy face, you need to draw “switches.” Think of these switches like non-dimmable light switches which each one of them can be turned “on” or “off” but nothing in between. CPU are essentially made of these switches. More switches you have, more powerful CPU is. Further, if you are able to make each switches smaller, each of these switches will need less electricity to flip it on or off, and you can pack more of these switches per given silicon wafer.Let me repeat this: smaller you can make these switches, you gain two things: 1. you can pack more switches into a CPU thus make it run faster, and 2. the CPU itself will be more power efficient (i.e. use less battery) and dissipate less heat.As of late 2018, people managed to pack BILLIONS of these switches in size of an Apple Watch’s watch face (I was going to use a postal stamp as an example, then, I figure it’s 21th century and many people here probably never seen a postal stamp before).Question is: how do you pack that many switches inside a such small form factor? You obviously can’t hand carve them. Again, using that copper plate/happy face as an analogy, instead of using a knife to carve a happy face pattern, you use a laser to burn the “wax” off. Nowadays, you can’t even use visible light to create such pattern simply because the wavelength of the visible light (think wavelength as the width of a light beam) is too wide to make such pattern. This process, which fundamentally similar to the copper plate + wax + acid example, should really called “photoetching” process. But no, the guy who invented this machine/process want sound high tech, so, it is called “photolithography.”With this knowledge in mind, you probably won’t be surprised that such “laser machine” is very VERY hard to make and cost upward in tens if not hundreds millions of dollars. The machine is called “photolithographic equipment.” There is only a handful of companies who make high end machine in the world. It is one of most difficult technical barrier to overcome.4. Because we are talking about packing billions of switches into a processor (as of early 2019, AMD packed 19+ billion transistors into a single Epyc CPU. Note that Intel’s 8008 CPU only had 3500 transistors back in 1972), you need a special environment to manufacturing these things so no dust / human skin flakes fall into these precious processors. Since manufacturing these things are a such pain in the neck, semiconductor MANUFACTURING itself, from the beginning, has always been one of highest barrier to entry.5. Then, there is the processor design itself. As I said earlier modern CPU constitute BILLIONS of little switches (it is properly called “transistors,” I have no idea what they really are). As you can imagine, design a CPU require technical skills hence it is a very high technical barrier itself.The upside of all this is that, once you ironed out everything, the process of making CPU is kind of like a high tech version of printing books. You can make A LOT of them relatively easily with very low per unit material cost (much easier than, let say, assemble a car), hence spread out the initial cost of design and manufacturing equipment to every CPU you make. The consequences of this economic externality is that it has a nasty tendency of “winner takes all:” More market share you have, initial cost can be spread to more units hence lower the cost per chip (or more profit per chip). More profit you have, more you can invest in either design next generation or fine tuning manufacturing process, which sharply reduce manufacturing defects hence further reduce per unit cost. This is the reason why at some point there were more than a dozen CPU makers in US alone (IBM, Motorola, Texas Instrument, Intel, HP, Sun Microsystems, Digital Equipment, Silicon Graphics, etc) but today Intel is the dominated CPU vendor in the market.To summarize these technical barriers1. you need to know how to make silicon crystalline wafer more pure than God intended and make them big enough and cheap enough.2. you need to know how to make all these of exotic chemical as part of semiconductor process3. you need to know how to make machines that can draw things at literally nanometer scale4. you need to learn how to design a processor or other semiconductor components5. you need to learn how to manufacturing them in a hair free, skin-flake free environment quickly and cheaply with unhumanly precisionBased upon my outdated industry knowledge, number of countries that have the technical know how on all five points above are: United States, and Japan… plus European Union… that is it. I am counting Russia out simply because I suspect Russia’s semiconductor industry is outdated by now, even for military applications, simply because lack of deployment scale thus lack of sustainable profit for reinvestment to keep up with the West.Sure, Taiwan and its TSMC is arguably the BEST semiconductor MANUFACTURING company on earth (TSMC is pushing 5nm manufacturing process by 2020! Just for reference, a human hair is about 80,000nm in diameter!!), and Taiwan also make silicon wafer themselves and many of the chemicals for the manufacturing process, but Taiwan is hopelessly depend upon company such as ASML (a billion dollar company you probably never heard of, based in the Netherlands) for their lithographic equipment.In case of Taiwan, 1, 2, 5 all checked out, but 3 is missing. As far as design goes (4), Taiwan actually have a x86 chip (via acquisition. remember Cyrix?) an impressive feat consider how small Taiwan is. But by now, Taiwan’s own x86 chip, at one time marred by lawsuit with Intel, is commercially irrelevant other than low-power niche market.South Korea is in similar situation as Taiwan, except South Korea is number one in memory (a completely different beast than CPU on its own, which I won’t talk about here). The last time I checked, South Korea didn’t have their own top-tier lithographic equipment neither.Because most countries at most occupies one or two (or three) of 5 areas of entire semiconductor manufacturing chain, if you look at raw import/export data, you will have an illusion that some countries/regions are very good at semiconductor manufacturing in this era of global trade.But if US decided to use its diplomatic clout to prevent lithographic machine being shipped to Taiwan. Taiwan’s vibrant semiconductor industry will be gone within just a couple years.(Not that US will ever do that, simply because TSMC, initially funded by Ministry of Economic Affairs of Republic of China, only hold 6% of stock by now, rest of largest shareholders are American private equity / investment firms. As result, TSMC, with the word “Taiwan” in its name, is actually an American company by now. The wonders of global trade goes both ways, no?)If US decided to do the same to South Korea, I am pretty sure South Korea won’t fair much better.If US decided to do this to mainland China…Wait, US, along with European Union and Japan, already doing this to China.As part of weapon embargo against the mainland China for the 1989 Tiananmen Square crackdown, lithographic equipment is included because it is considered a “dual use” technology.Is lithographic equipment a true dual use technology? Of course it is. But, using this Tiananmen Square crackdown to impose sanctions for 30 years? Many countries unfortunately also used army to crack down on peaceful protesters in the past (US Bonus Army 1932, France Algerian 1961/1962, South Korea Gwangju 1980, Bahrain Shia 2011) For some reason, China is the one who stuck with this sanction which still in effect today.In 2015, US issued an export ban on high-end Intel Xeon family CPU to mainland China. Again, using this military/civilian “dual use” technology as the reason behind such ban. All supercomputer are general-purpose, which include military use, that itself is nothing new. What I found interesting is that China’s supercomputer has been on Top500’s list (the website which track performance of supercomputer around the world), albeit not on the top, for almost a decade and US didn’t seems to have a problem… until one of China’s supercomputer ranked number one… two years in a row.Rather the timing of US’ CPU ban has anything to do with the fact that China’s own supercomputer beat American one or not, no one really knows. But the optics sure looks like US act out of sour grapes. The dark humor is that other than bragging right, being number one on those supercomputer list doesn’t really mean much at all! You can still do your nuclear explosion simulations rather you ranked number 1 or number 117 on the Top500 list…I can go on on how US and other European nations tried to prevent China from purchasing companies that hold key technologies, or refuse to license certain technology to China even if China want to pay for them DESPITE that the product in question has very dubious chance of being used in military applications…If you look at all these policies in the past, you start to realize that US banned chip sales against ZTE wasn’t an isolate incident. The West have tried, often half-heartily for some reason, for nearly 30 years, to hinder/sabotage China to move up the development value chains by prevent China get its dragon claws on semiconductors end products and intermediate products as part of semiconductor manufacturing processes.Let’s be frank, China is being treated this way this long probably has little to do with Tiananmen Square. While there is nothing “wrong” to find any excuse to attempt to stifle China’s attempt to move up the semiconductor value chain, what the West lose is the notion of fairness, especially in Chinese’s eyes. You can’t use “human right violation” as an excuse to assert yourself in semiconductor dominance on one hand, AND lecturing China about how China need to follow the international trade rules on the other hand, WITHOUT losing your own credibility on both.If you are a Chinese government in the leadership position, what would you do? Begging US to change his mind? (in case of ZTE, that is exactly what Xi did) The bigger question is: Should China’s own security and economic fate rest upon literally the mercy of a handful industrialized nations?Since all these (5) steps of semiconductor require HUGE resources that no private company would ever willing to put up this kind of HUGE and risky investment, other than use the political power to form state-owned enterprises to build them, what other choices do China have?The biggest grudges the West hold against China in this 2018/2019 trade war is that China refused to honor the Intellectual Properties, and that the existence of China’s State-Owned-Enterprises is fundamentally unfair therefore need to be dismantled.Now knowing what China has been through, do you at least understand where China is coming from, and why China is going to continue to do whatever it can, steal if necessary (go ask TSMC… they will give you an ear full), to get things which it think is critical to national interest? And that this state-owned-enterprises structure, despite its flaws, is not going away anytime soon?China started this semiconductor quest rather late, in small, but incremental steps, with much progress in manufacturing being made in the late 2010s. As of 2018, China managed to make a few chemicals, wafers of small diameter (it is hard to make things that pure, defect free AND BIG at same time), and lithographic equipment domestically. In other word, China is one country which by now has a complete semiconductor manufacturing chain, on par if not already surpass Russia other than certain narrow fields such as analog signal processing. If you dig through Chinese sources, you will see many of Chinese articles are quite straight forward about their own shortcomings. For example, China’s own lithographic equipment is 3–4 GENERATIONS behind first tier OEMs (which means domestically made CPU need more power and run slower at given physical size). Despite all, China’s progress was enough to alarm first tier lithographic equipment maker such as ASML, which start to export dated lithographic equipment to China lately. In case of wafer production, China is struggling to make wafer big enough for most demanding commercial use, etc. In other word, while China can make some semiconductors, they can’t make the most sophisticated product cheaply, independent of foreign parts as of early 2019 (example of most demanding product is the main processors in your average mobile phone!).By the time I was working in China in late 2000s, I start to see domestically made chips in many civilian places. In TV set-top boxes, and, to my dismay, in my phone. My phone was a China variant of Motorola device. The hardware is otherwise identical EXCEPT there is a Chinese-made Beidou navigation signal receiver in the China-market variant. My guess is that silly made-in-China receiver is the main reason why my phone runs hotter, and its battery life is a lot shorter than the US/EU/Latin America/Southeast Asia variant of the same model.A lousy chips in a mobile phone means shorter battery life. But at least you can charge it anytime you wanted. But when you are trying to mount an AESA radar on the nose of a jet fighter, where physical space AND electrical power are severely limited AND heat dissipation has always been a huge problem, then, lousy silicon chips’ shortcomings are no longer just a matter of inconvenience, isn’t it?Now that you know how important semiconductors are, and that the West has been levied embargo of various degree against China for past 30 years, can you understand why China is not going to give it up anytime soon?

As Singapore gears itself to remain relevant and securre in the world, the Little Red Dot will meet numerous challenges that has to be foreseen and prevented. 2017 would bring in new problems that has to be solved as well as old ones which are not addressed effectively in the past.EconomyWith Donald Trump in good stead of being the next President of the United States, Singapore would feel the pinch once he takes office next year. The protectionist rhetoric of Trump signals worry for Singapore’s economy as he would most likely scrap the TPP (Tran-Pacific Partnership) and heavy taxes of foreign imports; especially if the GOP wins both the Senate and House of Representatives. The TPP is a free-trade agreement (FTA) between 12 countries (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam). With the US being one of Singapore’s major trading partners, exports in Singapore suffer a blow (not a crippling one as Singapore has diversified her trade partners over the years). In view of a slowing economy, Singapore must be prepared to overcome this hurdle and find ways to protect their exports.Donald Trump vows to cancel Trans-Pacific Partnership as president, puts NAFTA on noticeGlobal competition is rife, and Singapore is starting to sweat under the heat. In October 2016, the World Bank announced New Zealand as the best place to do business, after overtaking Singapore. Regionally, countries like Hong Kong, South Korea and Taiwan are closing the gap in terms of economic competitiveness. The challenge lies in the country gearing up to remain as the prime location in Asia for investments. If Singapore loses her sheen, Singaporeans will suffer. In fact, due to operating costs, many companies are shifting their services abroad.New Zealand Overtakes Singapore as Easiest Place to Do BusinessSingapore ‘must gird itself for growing global competition’: PM LeeBracing under technological disruption in the economy is also another challenge. Companies today are adopting technology in their operations to save on manpower costs and increase productivity. This is observation is prevalent in the manufacturing industry. In addition the growing skill mismatch between workers and employers could possibly drive up unemployment figures, especially among older PMETs( Professionals, Managers, Executives and Technicians). Although there are safeguards like SkillsFuture to prevent this negative development, more has to be been, quickly.Disruption the 'defining challenge' for Singapore economySocio-economicThe rising number of elderly countrymen has created a enormous wall that Singapore must scale to move forward. Singapore is the fastest aging population in the world and it spells trouble as birth rates remains worryingly low. A shrinking working population is a threat to our economic competition (in view that immigration is heavily regulated so it is not the silver bullet to this problem). In addition, although essential, healthcare expenditure would be a strain on our national budget and the dearth of healthcare workers will exacerbate the problems in healthcare. The dependency rate of elderly Singaporeans is set to decline, worrying as working Singaporeans would be faced with greater pressure taking care of their aging parents. The Confucian pride of taking care of aged parents would slowly and certainly become unbearable burden if this challenged is not met with effective policies. From spurring birth rates to ensuring physical and mental health of aging Singaporeans; the government must address them in 2017.Singapore feeling impact of rapidly ageing population30,000 more healthcare workers needed by 2020 to cater for Singapore's ageing population: Health MinistrySocialGrowing tensions between immigrants and Singaporeans, although unapparent, is a challenge in 2017. Taking into account that xenophobic and racist sites like All Singapore Stuff, Wake Up Singapore are gaining supporters, it is likely that the local-immigrant divide is widening. Singapore faces the challenge to dispel prejudices towards this misunderstood group. Xenophobic rhetoric like foreigners stealing the jobs of locals, straining public services and them being relatively uncivil should be dispelled with the overriding benefits these people would provide. If Singapore fails to address this challenge, I am afraid that social cohesion in the country would be undermined.Civil society groups 'alarmed' by surge of racism and xenophobiaEducationIt is fortunate that the Singaporean government identified ills in the education system. 2017 calls for reforms in the education system on all levels to ensure that future working Singaporeans would have essential skills to be relevant in the rapid-changing workforce. The education system should shift towards holistic education, critical thinking, enterprise and innovation; schools should place less emphasis on rote learning or else risk building generations of exam robots.It is also noteworthy that the Singaporean government faces the challenge to wean Singaporeans off the feverish grade-and-paper-chase due to the immense pressure it places on our youth today. Much has to be done to ensure the well-being of the young and vulnerable. It is absurd to pack the schedule if a primary school kid with loads of enrichment and tuition classes.Distress signal11-year-old boy’s suicide due to exam and parental stress: State CoronerGoing beyond grades: Evolving the Singapore education systemExternal threatsIt is not a matter of whether it would happen to Singapore, it is a matter of when it would be. Being a highly globalised country, the threat of terrorism is almost certain with the rise of ISIS. With many close calls, Singapore is vulnerable to terrorist attacks. I praise the government for its foresight by enhancing security to weed out potential radicals and foil terrorist plots in recent years.However, no matter how capable the current measures are, there will come a day when Singapore would be brought to her knees; and it may happen in 2017. it is thus a challenge for the Singaporean government and the people to remain strong and resilient in the light of it.Batam terrorist plot shows how serious terrorism threat against Singapore is: Shanmugam8 Bangladeshi men detained under Singapore's ISA for planning terror attacks back homeEnhancing Singapore's response to terrorism2017 will be a rough year, but I am hopeful that Singapore will rise to the challenge.