The slowing Chinese economy could hurt Singapore's growth this year but the impact is unlikely to be large, said economists.
While some local sectors might be more affected than others, hopes of a soft landing in the world's second-largest economy have been raised based on recent data.
China reported earlier this week that its economy grew 7.5 per cent in the three months to June, slower than the 7.7 per cent pace seen in the first three months of the year.
A slowdown in China could have major repercussions on regional economies most exposed to the market, said ABN Amro economists.
They said that Singapore, along with South Korea and Taiwan, "stand out as the most vulnerable economies" should a sharper slide in Chinese growth take place.
China has been a growing export market for Singapore in recent years; this year, it overtook Europe as the Republic's single largest export market. Between January and June this year, it took in 12.8 per cent of Singapore's non-oil domestic exports, higher than the 12 per cent shipped to Europe.
Even though exports to China did rise 7 per cent last month, Bank of America Merrill Lynch economist Chua Hak Bin believes that the slowdown will hit Singapore's economic growth this year.
But Barclays Capital economist Joey Chew noted that the bulk of Singapore's exports to China are semiconductors and machinery, which eventually go to markets such as the United States and Europe.
"A lot of electronics are not actually retained in China, but processed and made into final products for exports to G3 (the US, Europe and Japan). So that's safe from China's slowdown," she said. "But machinery exports from Singapore to China have been quite subdued for some time now, and will probably stay so."
Dr Chua noted that the slowdown could also affect corporate profits of big property developers such as CapitaLand, with the property market cooling there.
"The biggest tail risk is that of a hard landing, where growth slides to below 6 per cent. That would hit companies there hard."
Still, Dr Moh Chong Tau, president and chief executive officer of precisionengineering firm Makino Asia believes the fears are unfounded.
He said China is slowing but not heading into a recession
"China is a multitrillion-dollar economy and it's growing at 7.5 per cent. That's a lot of money to be made," said Dr Moh, who is also honorary secretary of the Singapore Manufacturing Federation.
"Companies just have to make sure they get out of the low-value products and focus efforts on where they can get a competitive edge."