23 November 2020
For Youths

BCYC Knowledge Exchange Collective – The Belt and Road Initiative

BCYC Knowledge Exchange Collective – The Belt and Road Initiative

The fourth instalment of BCYC Knowledge Exchange Collective (KEC), an interactive platform for members to share and discuss topics or trends in relation to Singapore and China, was held on 30 August 2020. BCYC member Egwin Fan shared about the Belt and Road Initiative (BRI) as well as the opportunities available for Singapore businesses and professionals.

 

Introduction and Sharing of the Belt and Road Initiative

The BRI, initiated by Chinese President Xi Jinping in 2013, is the world’s largest platform for collaboration and trade. It is often termed as the centrepiece of Chinese foreign policy today and envisions the strengthening of China’s trade and developmental connections with Asia and Europe. This is done through the creation of a “Silk Road Economic Belt” improving overland transportation between China, Central Asia and Western Europe, as well as a “21st Century Maritime Silk Road” with the development of seaport infrastructure in the South China Sea, South Pacific and Indian Ocean regions. 

Under the initiative, China finances key infrastructural projects such as utilities, pipelines, railroads and seaports in developing countries through the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund. Egwin highlighted that this mutually benefits the developing countries and China as the improvement of transportation infrastructure enhance connectivity and boosts economic growth for the developing country while China also sees increased trade and investment returns from the projects. The initiative also goes beyond infrastructure connectivity with four other goals in policy coordination, trade facilitation, financial integration, and people-to-people exchange.

Egwin also spoke about the various driving factors for the BRI as proposed by the scholars, including China’s desire to forge stronger bilateral ties with countries involved in the initiative, boosting regional trade and economic development, and promoting the internationalisation of Chinese enterprises and the Renmimbi. 

Singapore’s Role in the Belt and Road Initiative

As a small and open economy, Singapore has welcomed the launch of the BRI and has actively collaborated with China on BRI-related initiatives, starting in 2014 with the signing of a Memorandum of Understanding (MOU) establishing the AIIB, as part of a group of 21 founding countries. 

After signing  2 MOUs and an agreement in 2017 and 2018 on areas such as policy cooperation, bilateral relations, and the development third-party market collaboration between Singapore and Chinese companies.

Finally, the four areas of cooperation between Singapore and China in the areas of infrastructure connectivity, financial connectivity, third-party market cooperation and professional services were formalised at the second BRI forum in 2019.

Singapore’s Opportunities from the Belt and Road Initiative

Under the four areas of cooperation, Singapore businesses and professionals stand to benefit from infrastructural improvements and other opportunities offered by the BRI. The new International Land-Sea Trade Corridor is a joint government-to-government project under the BRI which significantly reduces the time that goods from China arrive in Singapore. The corridor involves linking Chongqing to the port of Qinzhou by rail, thereby reducing the time taken for goods from Western regions of China to arrive in Singapore from 20 days to just two.

Formalised cooperation between Singapore and China allows local financial institutions such as DBS Bank to provide expertise to Chinese commercial and development banks in evaluating BRI projects in Southeast Asian region. In addition, Singapore firms can also play a pivotal role in the establishment of third-party market cooperation through networks and expertise in the region by partnering Chinese firms in areas such as infrastructure and logistics. Finally, Singapore’s status as an international arbitration and alternative dispute resolution hub would also allow the legal industry to offer their services to governments and firms from BRI countries involved in disputes.

About Business China Youth Chapter 

Business China Youth Chapter (BCYC) is a voluntary group of youths that envisions to be the leading Singapore-based community and inspires youths to be China-savvy and facilitate connections with China. Supported by Business China, BCYC has a vibrant calendar of activities which serve the needs of the BCYC community.

To join Business China Youth Chapter, please email bcyc@businesschina.org.sg

This article is contributed by Business China Youth Chapter Member Bryan Chang.