THE One Belt One Road initiative has a short name with a big ambition. Announced in late 2013, it aims to promote connectivity and cooperation among countries primarily in the Eurasia region through the maritime Silk Road and the land-based Silk Road Economic Belt.
The strategic proposal - now formally referred to as the Belt and Road initiative - is also part of China's strategy to secure its status and influence as one of the world's most powerful economies. President Xi Jinping set his mind on the Belt and Road initiative, just as he did on his well-known anti-corruption efforts. While not short of detractors and sceptics, it is difficult to ignore the general support and enthusiasm generated in both public and private sectors, and the general consensus that the Belt and Road initiative has built impressive momentum.
The benefits of China's initiative are clear for the Asean region. With economic growth slowing in the region and a clear need for infrastructure development, governments across Asia have the opportunity to boost infrastructure spending and improve reputations through Belt and Road. However, as a nation state with some of the world's most advanced infrastructure and an already sophisticated port and transportation system linking to its neighbours, where do the opportunities for Singapore lie?
Singapore was one of the earliest supporters of the Belt and Road initiative, recognising its magnitude and enormous potential. Being strategically located along the maritime Silk Road, the Belt and Road initiative is expected to unlock untapped regions, namely Central Asia, creating new trade and investment for Singapore companies. In particular, Singapore's well established logistics and infrastructure sectors are expected to reap benefits from the Belt and Road initiative. Singapore has a strong pool of local companies with wide-ranging infrastructure capabilities, from power, water to transport management. These companies' familiarity with doing business in Asia also makes them excellent partners for Chinese companies to explore infrastructure projects and market opportunities in the region. The establishment of the Asean Economic Community in December 2015 is also expected to multiply the benefits of the Belt and Road initiative even further. Singapore is the country coordinator for Asean-China dialogue relations, with a remit to hold this role for the next three years. This will enhance Singapore's super connector role, particularly as Belt and Road links China with its South-east Asian neighbours.
In addition, as one of the region's leading financial and professional services hubs, there are multiple areas for Singapore to capitalise on. For instance, Singapore is a world leader for offshore RMB exchange, alongside Hong Kong, and this creates natural synergies for China-linked financings. Signs of this already happening can be seen from Singapore signing memoranda of understanding with Industrial and Commercial Bank of China Limited, China Construction Bank and Bank of China to bring more than S$90 billion worth of financing for Belt and Road projects to the table. Professional services firms are also poised to capitalise on the significant opportunities in advising both Singapore-based and foreign enterprises as they expand into the region. The Belt and Road initiative is not without its challenges. To succeed, it requires a combination of huge financial clout, cutting-edge technical acumen and the ability to implement projects in a region with very diverse cultures, religions, languages and political systems. Deng Xiaoping once said: "Learn from all countries in the world. And most of all learn from Singapore." Singapore still has much to offer China in this regard and the Belt and Road initiative will certainly lead to even deeper ties between these two countries.
First published on The Business Times, 28 July 2016 and IE Singapore, 28 July 2016