Singapore can seize many opportunities from China’s Belt and Road initiative

2077

Asia today can be likened to Europe after the Second World War. Then, Europe had a significant infrastructure requirement, but needed capital from the US in the form of the Marshall Plan. Fast-forward to the present day: while China will not be able to finance Asia’s infrastructure need all on its own, with its significant savings surpluses and capital, it can catalyse a similar kind of Marshall Plan for Asia.

BRI also opens up significant opportunities for Asian companies, with the most obvious industries standing to benefit being power, transportation, water and infrastructure. Commercial banks as well as debt and equity capital markets also have a role to play in complementing policy banks like AIIB in greasing the wheels of commerce, financing trade, enabling working capital efficiencies and providing hedging solutions.

Closer to home, I believe Singapore has a number of intrinsic strengths that it can leverage on, allowing it to seize the many opportunities afforded by BRI.

  • Singapore is a very important financial hub. Singapore is one of the places where large amounts of capital gathers: it is the second-largest wealth management centre in the world, the third-largest financial market centre, and perhaps the number one commodities hub. As much as 60% of all project finance in Southeast Asia is arranged by Singapore domiciled banks. As a global financial centre, Singapore is able to intermediate both capital and trade as it goes out from China into the rest of the world. Singapore also does the reverse. It is an extremely good hub to raise capital back into China. As Chinese capital markets open and Chinese companies are able to access global bond markets, Singapore is extremely well-positioned to facilitate that process.
  • Singapore has a role as honest broker. The fact is, geopolitics sometimes comes along with economic and commercial considerations. In several markets and several countries, the ability for Chinese investment to go independently is often challenging. Being able to partner with Singapore, and being able to use Singapore as a conduit for their investments often makes those investments and projects a lot more palatable.
  • Singapore has a lot of world-class companies that can partner with Chinese companies. With BRI, there are opportunities and projects in the port, construction and offshore marine sectors for example. In a range of different industries, there are world-class Singapore companies which can prove to be extremely useful partners in being able to drive joint activity with Chinese collaborators around the region.


Excerpted from Article by Piyush Gupta, Group CEO of DBS Bank, titled ‘Belt and Road Initiative: implications for Asia and Singapore‘.

Get the latest news, opinions and commentaries. Available on Android  

27 comments

  1. Marshall Plan? Article written by a pro West person. Silk Road is a plan to reduce reliance on SCS in case of war. Added to that, China has built up huge capacities for infrastructure, rail, roads and especially steel. After again taking a clear pro US stance at the Shangrila La security forum, still hoping Chinese companies will partner Spore ones? Must be truly naive or stupid, or both. Looks like a period of economic decline for Spore now!
    China now has a clear Spore last policy. Even Alibaba has moved its hub to KL, clear signal China will build up SEA, excluding Spore. Huge strategic error to get involve in elephant fights.

    1. Qing Hui Yong Rent is not the issue for Chinese companies now, it is Spore’s clear support for US world order, you just join the fight between elephants.

    2. Low Ngee Kiat If Singapore is serious in attracting talent why not lower rental costs for firms to open here? We cant keep increasing rent for the same service over time. Surefire way to chase companies away.

    3. Mark Abisheganaden Go talk to Chinese companies. Many are explicit in following Chinese Govt’s Spore last policy now. Very clear now. Very political. In fact, Chinese are very proud of their country’s achievements and more nationalistic than most. Look at their netizens, all urging boycott of Spore. Even a Beijing taxi driver has refused a Sporean fare. I m advised not to speak once in a taxi or I could get thrown out too!

  2. Irene Hoe says:

    It would be best if Indy put the name of the writer or writers right on top so that readers can tell who it is before they decide to read what has been written. It’s annoying to have to keep scrolling down to the end to see the writer’s name

  3. Ben Rob says:

    Countries print money but had to manage inflation and its currency. China prints bililion and billions using thousands of machine every day and cheating the world by artificially controlling its currency. Now all of a sudden theh had hundreds and hundreds of billion on hand and using it to quickly buy other companies outside china and telling the world that they earn it.

    1. Jeffrey Ko says:

      If Chinese money is worthless as you imply, no country would accept them as payment. Are you saying these countries , including the U.S. are stupid to accept these worthless money from China?

  4. A lot of OBOR projects are China EXIM bank financed. That mean all hardware, expertise, products and services, consultants, engineers, workers, etc…are all Chinese.

  5. Why is there this denial? This harping on the past “good relations” does not mitigate the “bad relations” that many suspect exist at the moment.

    1. Good government has at least usd500bn reserves left by LKY team. Easy to stay afloat, but next generation will have harder time getting good jobs and opportunities as long as Spore remains in US camp.

    1. Jaga G. Jagathisan Huge strategic error focussing on US world order at a time when geopolitical power is more dispersed. LKY choose West during Cold War ideological fight was correct move. Now the fight is economics, markets and resources. Choosing a heavily in debt and declining USA is stupid. The wise thing to do is remain ambiguous or on US side but quietly so. Looks like LHL doesnt know when to stay quiet, unlike father.

    2. Yes, he is very much so.

      He is talking from position, and as a foreigner, has no clue how we have moved backwards in the last 10 yrs.

      Look, even SIA has begun to lose money. Heard MAS had made a huge profit.

      What regional achievement have we done in the last 10 yrs? All our leaders are talking is about defence, defence etc police actions. No new inoovations. No new ideas. Even basic things like trains cant be run properly.

      As for financial services – these days, it can be provided from anywhere. Your banker does not need to be in Shenton or MBFC. He/she can be in Luzene, CF, Canary Wharf, etc etc and provide the same level of funding.

    1. You mean all those in AIIB, including Germany/UK and Russia’s Putin are bowing to China? They know SCS is a US/China geopolitical struggle and stayed relatively quiet. Spore loudly choose to join the frontlines and turned itself into a China foe. Still hoping for opportunities? China now has a Spore last policy. Alibaba loudly annouced in Hangzhou yesterday it will use KL as SEA hub, almost all Chinese companies will bypass Spore now.

Comments are closed.