Singapore Businesses Ready to Engage in Belt and Road Initiative (BRI)
23 May 2017 [Singapore] - The Belt and Road Forum for International Cooperation, held from 14 to 15 May 2017 in Beijing, was a resounding success and has generated wide interest among the business community in Singapore. China’s pledge of more than RMB $100 billion in Belt and Road projects resonated positively with world businesses, notwithstanding differing views in regard to BRI’s outlook.
Singapore has always been a connector – most significantly for trade. Our role in the Maritime Silk Road (MSR) can be traced to the ancient Maritime Silk Road. Singapore’s strategic location along this trade route, led to significant maritime exchange, as evidenced by extensive archaeological records.
Our continued prosperity depends on continuing to serve as a connector. We are a small country, and therefore throwing our weight on either side of the geopolitical scale does little to tilt the balance. However, as a conduit between larger nations, we make ourselves a vital part of the conversation. We must engage everyone and obstruct no one.
Better engagement at a diplomatic level facilitates better trade relationships, and better trade relationships lead to more effectiveness in diplomatic engagements. The Belt and Road Initiative is a chance for Singapore to put itself at the heart of a new global trade ecosystem, and cement the future of Singaporean business.
Singapore’s strategic location at the crossroads of East and West enables it to be a key access point along the MSR, as it expands its role as a global transportation hub.Singapore receives some 2,700 vessel calls daily, cementing its status as a key global maritime centre and the world’s busiest port. Also, Changi International Airport handles about 6,800 flights weekly, making it one of the largest air transportation hubs in Southeast Asia. Hence, it is natural that Singapore continues to strengthen its potential as an important logistics and transportation hub along the MSR.
In addition, Singapore’s track record in financing, insurance, legal, arbitration, project management, and training and development positions it as a centre for providing numerous businesses opportunities in the BRI.
As a key regional financial centre, Singapore houses over 200 banks, with many basing their operational headquarters here for regional group activities. Also, as one of the largest offshore Renminbi centres, Singapore serves corporates and investors’ RMB needs with enhanced convenience. Currently, several Chinese banks have issued BRI bonds in Singapore to finance projects. This builds on the strong record of project financing in Singapore with its ecosystem of insurance, legal and arbitration expertise. 60% of ASEAN infrastructure projects are mainly financed by Singapore-based banks.
Against this backdrop, Singapore businesses can leverage their expertise by actively seeking opportunities to fund BRI projects. Also, Chinese companies can partner Singapore companies to finance projects in third countries.
In recent years, Singapore has emerged as the top destination for Asian businesses expanding abroad. According to official statistics published by the Ministry of Trade and Industry, more than 6,500 Chinese companies have established their presence in Singapore, almost twice the number of companies 5 years ago. This reflects the Chinese companies’ interest to go global through Singapore or via joint partnerships with Singapore companies.
On the other hand, China remains the top expansion destination for Singapore companies. Over the years, more Singapore enterprises and projects have embraced BRI-related policies and platforms to access the Chinese market. One key area is the development of Government-to-Government (G2G) projects. In April this year, IE Singapore, signed an MOU with the Guangxi Government to jointly improve connectivity between Western China and Southeast Asia via Guangxi, reaffirming the close and mutually beneficial relationship between Singapore and China.
We therefore strongly urge Singapore businesses in these industries to step forward and offer their expertise as their exchange of knowledge and information would be crucial to the projects’ success.
As Singapore continues to grow its capability in managing public and private sector projects, it can leverage its expertise in education, public policy, public administration and governance to facilitate the sharing of best practices in managing BRI projects. This can enable our foreign business counterparts from varying backgrounds to hone core skills required for implementing BRI projects.
Hosting BRI Office in Singapore
Singapore’s vast experiences makes it an attractive proposition for China to consider setting up a “BRI Planning & Implementation Office” here for closer G2G collaboration on BRI projects in our region. This is in line with Singapore’s role as the country coordinator for ASEAN-China relations to act as a bridge between both parties.
The BRI can contribute significantly to the ASEAN Connectivity Blueprint and help bridge the infrastructure gaps in the region. Singapore is well placed to accelerate the realisation of these projects through informed assessments. The possible services that the office can provide include devising businesses strategies and responses, building corporate and financing capabilities, sourcing project development opportunities for infrastructure and urban planning through joint-venture partnerships, and establishing overseas representative offices. In addition, Singapore’s reputation as a country that promotes and upholds good relations with its neighbours will provide a neutral location for the office.
Through enhanced cooperation and integration, participating businesses from China and ASEAN can stand to gain from improved development. A prosperous ASEAN will become a more important market for Chinese products and services.
Enhancing Knowledge of BRI
Singapore Business Federation (SBF) was the first to respond positively and strongly support the BRI by mobilizing, sharing, exchanging BRI-related information and increasing the business community’s awareness of China's BRI. These are done primarily through establishing platforms such as the annual Singapore Regional Business Forum (SRBF) and Belt and Road Digital Portal, and participating in BRI forums and seminars since 2014. During the 11th China-ASEAN Expo (CAEXPO) in September 2014, SBF Chairman in his speech highlighted the importance and significance of MSR.
The SRBF was inaugurated in 2015 to serve as a high profile, neutral and constructive platform for regional business leaders, academia, and government officials to network and discuss current issues in today’s global economy, 21st Maritime Silk Road was chosen as the theme.
It has been receiving strong support by the regional business community, with the participants increasing from 400 to 500 for the second SRBF held last year.
The 3rd Forum is scheduled to be held on 15 August this year with the theme ‘Seizing Business Opportunities Through Regional Cooperation’, incorporating an exciting line-up of programmes that includes the memorandum of understanding (MOU) signing ceremony, business matching, side meetings and networking among business leaders, launch of Belt and Road English portal, and an inaugural regional business survey report under the BRI.
Jointly launched by SBF and Singapore Press Holding’s Lianhe Zaobao (LHZB), the Belt and Road Digital Portal aims to help businesses better understand the initiative and seize opportunities arising from China’s trade and economic development plan. According to the latest survey conducted by SBF, the Portal has been well-received by the business community in Singapore, ASEAN and the Greater China Region, with readership hitting 7.8 million within one year of its official launch. To reach out to a wider audience, an English version of the portal is scheduled for launch in the second half of the year.
The opportunities arising out of the Belt & Road Initiative are tremendous, and the business community is wired to sense its potential. Business can and must take the lead. Being a connector requires us to be neutral, and look towards the wider interests of the international community. We should approach and engage, or else risk being left behind. The stakes are simply too high.
China has charted the new trajectory for trade and investments with a grand vision and ambitious long term plans; it is timely and opportune for us to work together to achieve more. As the old Chinese saying goes, “a nine-storey tower rises from a heap of earth; a journey of one thousand miles begins with the first step.” Working together, we can progress collectively in an environment of stability, trust, confidence and prosperity.