Friday, 12 May 2017

One Belt, One Road: China makes tracks on modern Silk Road

On Sunday, Beijing will host a two-day summit on the Belt and Road Initiative, an ambitious project that incorporates an overland network of highways and railroads as well as a maritime route. This is the first in a series that looks at the mega project spanning China, Central Asia, South-east Asia, South Asia, Africa, the Middle East and Europe.
By Goh Sui Noi, China Bureau Chief In Beijing, The Straits Times, 11 May 2017

That China is holding a mega summit in Beijing this coming week to drum up international support for its Belt and Road Initiative is telling. China may have helped to drive global growth for many years now, but the size and ambition of the project is such that Beijing alone cannot make it happen.

So what is the Belt and Road Initiative (BRI) or One Belt, One Road as it is better known?


Chinese President Xi Jinping, in two speeches in the space of about a month in 2013, proposed the revival of the Silk Road, ancient land and sea trade routes that linked China to the rest of Asia, as well as Africa and Europe.

In September that year, in Kazakhstan, he spoke about building a Silk Road Economic Belt, an overland network of highways and railroads linking China through Central Asia to Europe. A month later, in Jakarta, he proposed the 21st Century Maritime Silk Road that links China's sea ports to those in South-east Asia, South Asia, Africa, the Middle East and Europe.

Along these routes would be transport nodes and trading and industrial hubs. Building up these routes would mean beefing up infrastructure such as ports and railways, especially in less developed nations along the routes.

In Jakarta, Mr Xi also proposed the Asian Infrastructure Investment Bank (AIIB) to help finance the building of infrastructure in the economies along these trade routes.

Together, the land and sea networks came to be known in Chinese as 一带一路, or One Belt, One Road. This was later officially translated as Belt and Road Initiative, but One Belt, One Road is more often used.

In March 2015, the National Development and Reform Commission came up with a blueprint of the BRI that painted a broad vision of its aim - to promote the orderly and free flow of economic factors, efficient allocation of resources and deep integration of markets.

But it is clearly China-centric - it is to enable China to "further expand and deepen its opening up, and to strengthen its mutually beneficial cooperation with countries in Asia, Europe and Africa and the rest of the world", said the blueprint.

It is ambitious in that it encompasses 65 per cent of the world's population, about one-third of the world's gross domestic product and about a quarter of the world's trade.

The initiative would primarily involve more than 60 countries along the routes, but the Chinese have said it is open to all countries that "share the same goals".

So it is that more than 1,200 delegates from 110 countries, including Singapore, and 61 international organisations will attend the forum.


As the Chinese economy slows - from 10.6 per cent in 2010 to last year's 6.7 per cent, the slowest in 26 years - it needs to find new sources of growth, especially for its construction and engineering companies, analysts have said.

China also seeks to export overcapacity in its industries such as steel, cement and aluminium, and help its firms go international. China wants to use the initiative to develop its less developed regions.


While China has styled the BRI as a plan for economic cooperation with the rest of the world, many outside China see it as its way to dominate Asia again.

China had dominated the region, particularly at the height of the Qing dynasty in the 18th century, but lost its influence after the fall of the dynasty in 1911.

China is expanding its influence by binding other nations more closely to it economically, said Mr Tom Miller, author of China's Asian Dream: Empire Building Along The New Silk Road, at a talk recently.

There is also a security element. Beijing hopes to bring greater stability through economic development to Xinjiang, a poor region which has had outbreaks of violence.


The US$100 billion (S$141 billion) AIIB was set up in part to fund infrastructure projects of the BRI, as was the US$40 billion Silk Road Fund.

There is also the US$100 billion New Development Bank, set up by the Brics countries - Brazil, Russia, India, China and South Africa.

China's own banks have also pledged to lend to BRI projects.

However, with the Asian Development Bank having estimated that the Asian region alone needs US$1.7 trillion worth of infrastructure building annually from 2016 to 2030 to maintain its growth momentum, more funds are needed.

There is thus a need for the private and public sectors to come together and for the better-off countries to help financially, said Mr Zhang Yunling of the Chinese Academy of Social Sciences.

To involve the private sector, however, there is a need for transparency in how the funds are allocated, analysts say. This is because private investors will not get involved unless they are sure the funds will be used effectively.

It has been pointed out that corruption and wasteful bureaucracies are common among nations on the routes. Addressing investors' concerns is a huge challenge for China.


Chinese officials have said that since 2013, the country has invested more than US$50 billion in countries along the trade routes.

In addition, they said, 56 economic and trade cooperation zones have been built by Chinese businesses, generating nearly US$1.1 billion in tax revenue and creating 180,000 local jobs.

But many projects considered to be part of the BRI predate the initiative. For example, the International Centre of Boundary Cooperation, a free trade zone that straddles the border between China and Kazakhstan in the city of Horgos (also known as Khorgos), was set up in 2011 but is now part of the BRI.


Developing countries along the routes which are hungry for infrastructure welcome the BRI. These include ASEAN countries like Laos, Cambodia, the Philippines and Indonesia, although there is some wariness of China's intention to influence the region politically.

China's main rival, the United States, has shown little interest.

Its officials were non-committal when Mr Xi, at his meeting with US President Donald Trump, said China welcomed US participation in it.

Japan, which had earlier shown little interest, appears to have changed its mind. It is sending Mr Toshihiro Nikai, secretary-general of the ruling Liberal Democratic Party, to the forum.

The European Union has said that projects along the new trade routes should be open to Europeans.

As some analysts have said, there is a worry among countries and companies about missing out on what could be the largest trading collaboration in the world for many years to come.

Singapore in 'good position' to support China firms on 'Belt and Road': Lawrence Wong
The Sunday Times, 14 May 2017

As a strategic node on the age-old Maritime Silk Road, Singapore continues to be a key hub connecting the movement of goods and people in South-east Asia to the world.

This puts the Republic in a good position to support the growing number of Chinese firms venturing along the "Belt and Road", said Minister for National Development Lawrence Wong.

Mr Wong made these remarks in an interview with China's Xinhuanet news agency in Beijing.

He is in the Chinese capital to attend the two-day Belt and Road Forum for International Cooperation, which kicks off today.

He said China's Belt and Road initiative - which aims to revive ancient land and sea trade routes that linked the country to the rest of Asia, Africa and Europe - creates many opportunities for closer cooperation between China and Singapore.

As a regional financial centre and one of the largest offshore renminbi centres, Singapore can address the financing needs of Belt and Road projects, particularly in South-east Asia, said Mr Wong. He added that several Chinese banks have already issued Belt and Road bonds in Singapore to finance projects.

There are also many opportunities for businesses from both countries to work together, he said. These projects could involve other countries along the trade route, and in areas such as transport and logistics, utilities and infrastructure developments.

Mr Wong said many Chinese firms are already using Singapore as a launch pad to South-east Asia.

China's investment in Singapore alone accounts for about one-third of its total investments in countries along the Belt and Road, China's Ministry of Commerce said.

Another possible area of cooperation between Singapore and China is providing joint training for officials from Belt and Road countries that are at different stages of development. Mr Wong said Singapore's experience in urban transformation may be of interest to other nations. "Singapore stands ready to partner with China to build the Belt and Road as a major platform for regional collaboration," he added.

Tomorrow, Mr Wong will speak at the Belt and Road Industry Financing International symposium. He will then head to Suzhou to chair the 8th World Cities Summit Mayors Forum - a platform for mayors and city leaders to share best practices on how to address pressing urban challenges.

Mr Wong will meet foreign leaders, counterparts and industry leaders in Beijing and Suzhou. He will be accompanied by officials from the Ministry of National Development and the Monetary Authority of Singapore.

Closing the infrastructure gaps in ASEAN
By Goh Sui Noi, China Bureau Chief, The Straits Times, 11 May 2017

BEIJING - China's ambitious new Silk Road plan will help developing countries in South-east Asia to close their infrastructure gaps and improve their productivity and economic growth, bankers and analysts have said.

"The Belt and Road Initiative is a helpful catalyst to fulfil a number of infrastructure gaps in the region as demand rises," said Mr Tim Evans, head of commercial banking in international markets, Asia-Pacific, at HSBC.

Many countries in the region have placed emphasis on infrastructure building as a way to improve their economic efficiency.

New road and rail links can improve transport efficiency, so it will take just days to transport goods by road or rail between China and Thailand, when it now takes a week or more by sea.

China is helping Indonesia build a 142km high-speed rail linking Jakarta with Bandung, and providing 75 per cent of the financing for the US$5.2 billion (S$7.3 billion) project.

Vietnam is also in great need of infrastructure such as power generation, transport and waste treatment, noted Mr Winfield Wong, head of wholesale banking at HSBC in Vietnam.

It needs to spend about US$30 billion a year to build up its infrastructure, he added.

The Asian Development Bank has projected that Asia will need to spend US$1.7 trillion annually from 2016 to 2030 on infrastructure to maintain its growth momentum.

But countries in the region do not have deep pockets for infrastructure building. The region's leaders are thus looking to China's Belt and Road Initiative to help them fund it.

Vietnam's President Tran Dai Quang is among the seven top leaders from ASEAN who will attend the Belt and Road forum in Beijing from Sunday to Monday.

The others are Philippine President Rodrigo Duterte, Indonesian President Joko Widodo, Myanmar State Counsellor Aung San Suu Kyi, Malaysian Prime Minister Najib Razak, Cambodian Prime Minister Hun Sen and Laos President Bounnhang Vorachit.

In the second instalment of a series that looks at the mega project spanning China, Central Asia, South-east Asia, South Asia, Africa, the Middle East and Europe, The Straits Times explores Fujian, a designated core area for the 21st Century Maritime Silk Road, and Horgos, the special economic development zone on China's border with Kazakhstan.

Horgos on China-Kazakhstan border: Not smooth as silk yet in border hub
By Lim Yan Liang, China Correspondent In Horgos, Xinjiang, The Straits Times, 12 May 2017

Under the shadows of the snow- capped Tianshan mountains, Chinese and Kazakhs cross over into each other's territory with just a flash of their passports in Horgos, a 5.3 sq km special economic zone straddling China and Kazakhstan.

Conceived in 2006 and operational in 2011, the zone came under the One Belt, One Road initiative after the latter was proposed in 2013.

The zone is meant to be a key node for rail and vehicular trade between China and Eurasia going on to Europe; and a catalyst for a larger 70 sq km area to house high-tech industry, financial services and biomedical firms. But five years on, Horgos, or Khorgos, is still a long way from these lofty goals.

Rather than high-volume, high- margin trade powered by rail cars or prime movers, most of Horgos' daily 12,000 visitors are there to cash in on tax exemptions or discounts. Chinese visitors especially would cart as many cartons of canned food, chocolates or soft drinks as they can out of the Chinese side of the zone to save on consumption tax of 13 to 17 per cent.

One Chinese visitor, a 31-year-old who wanted to be known as Mr Zhang, said he makes 20 yuan (S$4) per trip and he sells his food purchases to a nearby minimart. "A trip can take 30 minutes, or more than an hour if the Customs queues are long," he said. "It's a tax-free zone, but there's still passport control."

For now, the difference between the Kazakh and Chinese sides of Horgos could not be more stark.

Two double-storey duty-free centres on the Kazakh side are dwarfed by the tall buildings on China's side, where the din of machines is a constant. Down the road, the finishing touches are being put on a border crossing that can handle 10 times the road traffic of the existing one when it is completed later this year.

Unlike deep-pocketed China, which has poured 11.7 billion yuan into building mega malls, commercial towers and even a cultural centre on its side of the zone, Kazakhstan, a country of 18 million people, has struggled to fund infrastructure projects, especially after a plunge in oil prices in 2014 hit its natural resource-reliant economy.

While Kazakhstan's President Nursultan Nazarbayev has thrown his weight behind the project, analysts said things may be slow to get moving, given the long shadow cast by the region's top dog, Russia.

Kazakhstan and Russia, along with Armenia, Belarus and Kyrgyzstan, are already part of a Customs union. Fear that Chinese goods will flood into the union through Horgos means only €1,500 (S$2,300) worth of duty-free goods can be brought into Kazakhstan each day per visitor. China imposes a cap of 8,000 yuan per person a day.

Dr Farkhod Tolipov, director of Knowledge Caravan, an institute which studies geopolitics in Central Asia, said: "The opening and unlocking of Central Asia appears to be a more complicated and protracted process than expected, in which the 'Modern Silk Road' needs to balance multiple national interests."

For Horgos to fulfil its promise, the Chinese need to change their mindsets, said experts.

Beijing has deployed moves from a familiar playbook to try and spur economic growth: capital and infrastructure investment, and preferential policies to try to make Horgos a more attractive offshore yuan settlement centre than even Shenzhen or Shanghai.

But it needs to look at how it can help Central Asian countries build up their infrastructure, said Professor Yang Yiyong, director of the Macroeconomics Institute at the National Development and Reform Commission, China's economic planning authority. "We should be taking a leaf from Singapore's book, setting up cooperation offices in each of the five Central Asian countries," he said at a Belt and Road forum.

Dr Tolipov said China should help Eurasia attract third-party investment. "By using the Silk Road Economic Belt idea, these states can advertise their own territories, resources, economic potential, reliability, perspectives and even history to draw outside investors."

Fujian gears up to boost trade links with South-east Asia
By Chong Koh Ping, China Correspondent In Fuzhou (Fujian), The Straits Times, 12 May 2017

Call it the frozen seafood express delivery.

Previously, seafood imports from South-east Asia, such as ribbon fish, squid and pomfret, would be stuck for days at Mawei Port in Fuzhou before being cleared by Customs and sent to different corners of China.

Now, one day may be all it takes for the seafood to go from port to dining table, with the setting up of a 24-hour inspection station inside a wholesale market near the port in 2013 speeding up Customs clearance by leaps and bounds.

"It has certainly helped cut costs and made it more convenient for businesses to import seafood," said Mr Andy Lin, managing director of Ming Cheng Group, which operates an integrated centre for the import, trading, storage and distribution of seafood.

"We've seen a 10 per cent increase year on year in demand for seafood imports from South-east Asia in recent years. There is room for the volume to double."

ASEAN seafood imports make up about 40 per cent of the 30 billion yuan (S$6.1 billion) worth of trade a year involving more than 1,000 businesses at its integrated centre in Fuzhou.

Local enterprises in Fujian hope to see more improved government services and policies such as the express Customs clearance, as the province gears up to boost trade with South-east Asia.

Fujian, which has a population of nearly 39 million people, is expected to take the lead in boosting trade links after being named "the core area" of the 21st Century Maritime Silk Road. The southern coastal province, which is the ancestral home of 12.5 million overseas Chinese in ASEAN, has been assigned by Beijing to focus on ASEAN countries.

Unveiled by Chinese President Xi Jinping during his visit to Indonesia in 2013, the revival of the 1,000-year-old sea route is touted as a grand project to connect China with its South-east Asian neighbours and westwards to South Asia and beyond.

Together with another overland route that links western China with Central Asia and Europe along an economic belt, the two routes are collectively known as the One Belt, One Road.

Ministry of Agriculture statistics show that ASEAN nations are top buyers of seafood products from China. In 2015, ASEAN was also China's third largest export market behind Japan and the United States. Imports from the region to China come in fourth behind Russia, the US and Peru.

"ASEAN has overtaken the US as our biggest trading partner in the past year," Mr Li Lin, deputy director-general of the Foreign Affairs Office of Fujian Provincial Government, told a group of ASEAN reporters on a recent visit organised by China's Foreign Ministry.

Last year, Fujian's economy grew 8.4 per cent to reach 2.85 trillion yuan, ranking 10th out of 31 provinces. Foreign trade contributed to more than one third of its gross domestic product, at 1.04 trillion yuan.

When it comes to ASEAN, Mr Li said Fujian's priority is to improve transport links, expand two-way trade and investments, develop maritime cooperation and deepen people-to-people exchanges.Fujian has also stepped up its sister province programme with ASEAN, said Mr Li. Last year, it established sister province relationships with East Java in Indonesia and Sarawak in Malaysia.

Asked if any projects have been sealed between Fujian and ASEAN countries, Mr Li said the first step is simply to encourage more visits between the two sides. "With the increase in people-to-people connections, including more tourist arrivals, friendship and confidence will be built. And with better understanding, concrete economic cooperation will follow," he added.

Quanzhou remains key to maritime Silk Road
By Chong Koh Ping, China Correspondent, The Straits Times, 12 May 2017

FUJIAN • Any talk of the revival of the ancient maritime Silk Road will not be complete without a mention of Quanzhou city.

As one of the key starting points of the sea route, through which China exported its ceramics, silk and tea, Quanzhou was said to be the largest port in the east from the 10th century to 14th century.

Also known as Zaiton among Arab traders in the old days, based on citong, the Chinese name for the coral trees that used to line the streets, the city has many remnants of Muslim, Christian, Hindu, Buddhist and Taoist religious sites from that period. The local government has applied for 16 such sites to be added to the Unesco's list of World Heritage Sites next year.

Today, Quanzhou is an economic powerhouse. Its economic output topped the nine cities in the province for 18 years. Quanzhou's economy is almost entirely driven by its 100,000 private enterprises. Its top five industrial clusters - textile and clothing, petrochemical, footwear, equipment manufacturing and construction materials - each boasts an annual output of more than 100 billion yuan (S$20 billion).

Jinjiang, in the south-eastern part of Quanzhou, is home to famous Chinese clothing brands and sports shoemakers, like Anta, 361 Degrees and Peak. Local officials said some of these enterprises have started venturing out of China to explore new markets globally.

President of 361 Degrees Ding Wuhao told The Straits Times it has more than 1,300 stores in Brazil, the United States, Europe and Taiwan since it started expanding overseas in 2014.

As for setting up in South-east Asia along the maritime Silk Road, he said: "We will leverage on the government's favourable policies, adjust our overseas strategies accordingly and gradually develop markets along the Silk Road."

Belt and Road Forum

China pledges $174b for mega Silk Road project
But it won't use initiative to interfere in other nations' affairs, says Xi at Belt and Road Forum
By Chong Koh Ping, China Correspondent In Beijing, The Straits Times, 15 May 2017

Chinese President Xi Jinping has pledged US$124 billion (S$174 billion) to boost his hugely ambitious new Silk Road project, but stressed that China will not use it as a tool to impose its will on others and that every country is welcome to join it.

"We will not resort to outdated geopolitical manoeuvring," said Mr Xi at the opening of the inaugural Belt and Road Forum in Beijing.

"What we hope to create is a big family of harmonious co-existence," he added, seeking to assuage concerns that China is using the initiative to expand its influence by interfering in other countries' internal affairs and exporting its model of development.

The Belt and Road Forum comes nearly four years after Mr Xi unveiled his plan to revive ancient trading routes via land and sea that linked Asia, Africa and Europe.

Mr Xi branded the plan to build roads, railways, ports and industrial parks along the routes "a project of the century" in a "world fraught with challenges".

The gathering of some 1,500 representatives from over 130 countries to discuss international cooperation led by China comes amid a backlash against globalisation and free trade in the US and Europe.

"Trade is an important engine driving growth," said Mr Xi to an audience that included 29 heads of state and government and leaders of key international organisations such as the United Nations and World Bank.

"We should embrace the outside world with an open mind, uphold the multilateral trading regime, and advance the building of free trade areas," he added.

Mr Xi said his vision is to form a new model of win-win cooperation centred on open economies, market integration and inclusive development.

Yesterday, the Chinese leader announced a massive package of additional funding to finance projects along the trade routes.

This includes another 100 billion yuan (S$20.3 billion) for the Silk Road infrastructure fund, 250 billion yuan in special loans by the China Development Bank and 130 billion yuan of loans by the Export-Import Bank of China for Belt and Road projects. In addition, Chinese banks will expand their overseas capital by 300 billion yuan.

In the next three years, China will also set aside 60 billion yuan to improve the well-being of people living in countries along the routes.

Analysts say this shows Mr Xi's resolve in giving the initiative a strong impetus at the beginning.

"You can imagine it as a start-up. You need someone to put in the initial investment. So China is now providing the seed money. And it has to be big enough to attract further rounds of funding," said Professor Wang Huiyao, president of the Centre for China and Globalisation, an independent think-tank in Beijing.

Professor Wang Yiwei from Renmin University noted that the generous funding also shows China's desire to take on a leadership role in world affairs.

Given China's recent woes with its falling foreign reserves and a weakening yuan followed by tighter controls of the outflow of capital, there have been concerns over whether the world's second- largest economy has the money to drive its ambitious plan, he said.

"But as you can see, the worries are unfounded," he added.

Many developing countries along the trade routes have welcomed the initiative even as some are wary of China asserting its influence.

India has refused to take part in the forum, unhappy that a key project with Pakistan runs through Kashmir, which it also lays claim to.

The United States yesterday said it welcomes the initiative and that US companies are ready to take part in it.

Some nations, such as Britain, have embraced it but others like Australia are cautiously receptive.

Projects span rail, ports, industrial parks
The Straits Times, 15 May 2017

BEIJING • China's Belt and Road initiative spans some 65 countries representing 60 per cent of the global population and around a third of global gross domestic product (GDP).

The China Development Bank alone has earmarked US$890 billion (S$1.2 trillion) for some 900 projects.

Here are some projects involving a land "belt" and a sea "road" that link China to countries in Asia, Europe and Africa:


• The China-Europe Railway Express includes 51 rail links connecting 27 Chinese and 28 European cities, with freight trains that offer shorter transport time than sea routes.

• A planned 418km rail line between the Asian giant and Laos is aimed at becoming the first overseas route that connects with the vast rail system in China.

• An 873km high-speed railway project between China and Thailand will link the Chinese border to Thailand's ports. It will transform south-western Yunnan province into a trading hub that exports China's goods to South-east Asia.

• Nepal is in talks with China to build a cross-border rail link that may cost up to US$8 billion, with funding expected after the Himalayan country signs up formally for the Belt and Road plan. The proposed 550km railway would connect China's western Tibet region to Nepal's capital of Kathmandu.

• In Africa, the initiative will include a 471km railway between Kenya's capital, Nairobi, and its port of Mombasa on the Indian Ocean coast. The railway is expected to carry 25 million tonnes of cargo per year.


• Three state-owned Chinese enterprises have bought Turkey's third-largest port, Kumport, which is considered an important joint between the "belt" and the "road".

• In Pakistan, a controversial trade route was inaugurated last November to link its Gwadar port, on the Arabian Sea, with Kashgar, a city in China's north-western Xinjiang region.

The economic corridor has alarmed India because it cuts through disputed territory in Kashmir that New Delhi claims is illegally occupied. The port will provide China with safer and more direct access to the oil-rich Middle East than the sea trade route it currently uses through the Malacca Strait.

Central to the project in Pakistan is the renovation of a 487km road that is part of China's only land passage to the Middle East.


• China and Malaysia are building an industrial park in Kuantan, Malaysia, for steel, aluminium and palm oil processing

• In eastern Europe, ground was broken in July 2014 in Minsk for a China-Belarus industrial park for high-tech businesses, the largest one built by the Asian country overseas.


Singapore can help finance projects, says Lawrence Wong
By Chong Koh Ping, China Correspondent, The Straits Times, 15 May 2017

BEIJING • Singapore can play a complementary role in financing projects in the Belt and Road initiative, particularly those in South- east Asia, said National Development Minister Lawrence Wong.

As an international financial centre and one of the largest offshore yuan centres, Singapore can join Hong Kong and London in facilitating lending to the major infrastructure projects aimed at improving connectivity between China and countries along the trade routes linking Asia, Africa and Europe.

Mr Wong suggested roping in private and commercial partners to help make projects more bankable or more acceptable to lenders.

Besides finance, Singapore also has a wide range of high-quality professional services in urban master-planning, engineering, project advisory, dispute resolution and legal services, which can help make infrastructure projects more bankable, he said at a session on financial connectivity at the Belt and Road Forum yesterday.

Financial institutions are also welcome to tap Singapore's capital markets and institutional investors, such as pension funds and insurance companies, to raise funds, he added.

Mr Wong represented Singapore in signing a memorandum of understanding (MOU) on the Belt and Road initiative with China.

The MOU notes that cooperation on the initiative will "enable the two sides to enjoy better bilateral relations, more substantive economic ties and closer people-to-people exchanges".

China's initiative promises new route to open trade

Several deals signed amid pledge to promote rules-based trading and push for growth
By Chong Koh Ping, China Correspondent In Beijing, The Straits Times, 16 May 2017

China's ambitious Belt and Road Forum drew to a close yesterday with a slew of deals and the promise of a new door opening to global trade.

At a time when the United States is pursuing an "America First" policy, Chinese President Xi Jinping shepherded a communique in which 30 nations vowed to promote a rules-based trading system and greater openness.

Stressing the importance of a level playing field for trade and investment, Mr Xi said: "It is our hope that through the Belt and Road development, we will unleash new economic forces for global growth."

China signed cooperation deals with 68 countries and international organisations during the two-day forum, yielding a list of 270 deliverables in areas such as policy coordination, infrastructure building, trade, investment and finance.

Mr Xi also announced that the next Belt and Road Forum will be held in 2019.

Touted as the biggest diplomatic event initiated by China, the inaugural forum was attended by 1,500 delegates from more than 130 countries to discuss Mr Xi's mega project to revive two ancient trade routes via land and sea.

Mr Xi mooted the initiative four years ago as a way to boost growth for China and its neighbours by building roads, railways, ports and industrial parks along the trade routes.

Speaking to reporters at the Yanqi Lake resort, the forum venue on the outskirts of Beijing, Mr Xi said that the gathering had sent a "positive message" to the rest of the world.

Many countries walked away from the forum with numerous deals sealed. Malaysia signed nine memorandums of understanding and agreements with China, including several new commercial deals worth more than US$7.22 billion (S$10.1 billion). The biggest was for a US$3.46 billion project to set up a futuristic robotic hub in Johor.

Indonesia signed three agreements with China, including a loan worth US$4.48 billion from the China Development Bank for the Jakarta-Bandung high-speed rail project.

"The Belt and Road development does not shut out, nor is it directed against, any party," said Mr Xi.

The leaders agreed to promote a trading system with the World Trade Organisation at its core.

They noted the challenges faced by the world economy and welcomed the initiative to improve connectivity between Asia and Europe.

They also said that it is important to expand trade and investment based on market rules and universally recognised norms.

The communique also urged countries that have signed on to the Paris climate change agreement to implement it fully.

Mr Xi reiterated that the initiative is an "open and inclusive platform for development", adding: "We will not base cooperation on ideological ground, nor will we pursue any political agenda or make any exclusive arrangement."

Despite China's pledges of inclusiveness and a level playing field for all, there are concerns over transparency issues and the country's growing clout and its intentions.

Germany asked for more transparency. India, meanwhile, refused to attend the forum because one of the Belt and Road projects passes through Kashmir and Pakistan. The two South Asian neighbours have fought two wars over the disputed Kashmir region.

New Silk Road brings opportunities and challenges: Lawrence Wong

By Chong Koh Ping, China Correspondent In Beijing, The Straits Times, 17 May 2017

Singapore's partnership with China on its ambitious new Silk Road initiative brings both opportunities and challenges, National Development Minister Lawrence Wong said in Beijing yesterday.

Singapore can play a role to help finance Belt and Road projects, and provide expertise in infrastructure planning. Singapore companies can also partner Chinese companies to invest in South-east Asia, he said.

"But we should be aware that it can present competition. With the Belt and Road (initiative), new infrastructure will be built all around us... Trade routes will be adjusted as these new roads and ports get built and developed," said Mr Wong, who represented Singapore at the inaugural Belt and Road Forum in Beijing on Sunday and Monday.

The diplomatic event, touted to be the biggest held by China, had 1,500 participants from more than 130 countries.

Mooted by Chinese President Xi Jinping in 2013, the Belt and Road initiative is an ambitious plan to link China to Asia, Africa and Europe, via land and sea.

Mr Wong told reporters that other countries are looking to be the next transshipment port, air hub, sea hub or financial hub as they ride on Mr Xi's mega project, which promises to boost growth by building roads, railways, ports and industrial parks along the trade routes.

"This means that we shouldn't be complacent and should continue to work hard to make Singapore relevant," he said, noting that Singapore is doubling the capacity of its airport and seaport, which will make them more relevant in the future.

When asked why Singapore Prime Minister Lee Hsien Loong did not attend the Belt and Road Forum, which was attended by 29 heads of state and government, including many from South-east Asia, Mr Wong said the invitation was decided by the Chinese.

The focus of the forum, he noted, was on encouraging Chinese firms to go overseas and the channelling of Chinese investments abroad. Singapore does not have any infrastructure projects linked to the initiative.

"It doesn't mean that we are completely irrelevant," Mr Wong said.

When the Japanese started investing in South-east Asia in the 1980s, they aimed to relocate their factories and outsource manufacturing to cheaper places, he said. As their investment needs matched Singapore's development needs, the Government worked hard to make the country a good regional base for Japanese companies.

"Now, the wave of (Chinese) investments may be more infrastructure related. (The infrastructure projects) may or may not be in Singapore because our infrastructure needs are very different from those of the developing countries around the region," he added.

But as a financial and infrastructure centre, Singapore can help broker Chinese investments to those countries and partner Chinese firms to venture into the region.

Mr Wong was asked about plans by Hong Kong's rail operator to partner state-owned China Railway Corp to bid for the construction of the Singapore-Kuala Lumpur high-speed railway.

If the bid is successful, Singapore will have its first Belt and Road project right on its shores.

Mr Wong said: "We welcome the participation of all companies, including those from Hong Kong and China."

Normal Singapore-China ties can also be strong and beneficial

Being treated as a 'normal' country by China may be good for bilateral ties
By Goh Sui Noi, China Bureau Chief, The Straits Times, 16 Jun 2017

BEIJING • Without doubt, Singapore and China were at pains this week to tell the world that their relationship was back on track after a rough patch last year over the South China Sea and Taiwan.

At a press conference on Monday in Beijing after his meeting with his Chinese counterpart, Singapore Foreign Minister Vivian Balakrishnan said: "China-Singapore relations are in good working order. They are strong, with the potential to grow even stronger."

Chinese Foreign Minister Wang Yi, for his part, said: "We had in-depth talks and reached a lot of consensus on bilateral, regional issues and shared interests.

"Both of us are of the view that, against the background of a backlash against globalisation, China and Singapore, as the champions of regional integration, need to work together to address challenges and uphold common interests."

Separately at their meeting later that day, State Councillor Yang Jiechi, a senior politician in charge of foreign affairs, told Dr Balakrishnan: "Your visit certainly reflects the high importance that the Government of Singapore attaches to its relations with China. We on the Chinese side also highly value our relations with Singapore."

Yet, as a sign that challenges lie ahead for the two countries in maintaining the close ties that they have enjoyed since the late 1970s, two Chinese newspapers pointed out how differences and misperceptions, and the attendant actions, have rocked the relationship, with one suggesting that China change its approach to the relationship.

The China Daily, China's largest English-language newspaper, in an editorial on Tuesday struck a positive note, saying Dr Balakrishnan's visit was a "precious step" forward in the repairing of ties. It added that a memorandum of understanding on the Belt and Road Initiative signed by the two countries last month "underscored the resilience of their ties".

However, in the editorial titled "Singapore should not be diverted from right course", it also noted that recent glitches in ties "have displayed Singapore's misinterpretations of China's intentions".

At the same time, it added that while Singapore has legitimate interests that differ from or even contradict China's, this "does not mean it has any reason to help others hurt China's core interests".

The Global Times, a nationalistic tabloid, was more direct in its editorial that appeared on both its English-language and Chinese-language websites.

The editorial that appeared on the day of Dr Balakrishnan's official meetings on Monday laid the blame for the cooling of ties last year squarely at Singapore's door.

The chill in ties, it said, was due to Singapore's "siding with the US and Japan regarding the South China Sea issue". This, it added, was exacerbated by the detention in Hong Kong of nine armoured vehicles of Singapore. These vehicles had been used in military exercises in Taiwan.

Noting that Singapore has long faced the difficulty of balancing between China and the United States alongside China's rise, it said: "As the country tries its best to strike a balance between the two sides, it tilts towards the US when a balance is impossible."

As examples of that tilt, it cited what it sees as Singapore's support for the South China Sea arbitration case against China brought by the Philippines and the Republic's opening of its military base to the US' anti-submarine reconnaissance aircraft for patrols over the disputed waterway.

While it affirmed Prime Minister Lee Hsien Loong's support for the Belt and Road Initiative, it added that Singapore will inevitably vacillate between China and the US. It concluded that China needs to take a "normal attitude" towards Singapore's swinging between the two powers.

There is no need to try too hard to get Singapore to be friendlier towards China or be too worked up by this issue, said the editorial.

After all, with fewer officials going to Singapore for training, the island Republic's influence on China is on the wane, said the paper.

There appears to be an intimation here that the Chinese should not feel disappointed or angry if Singapore - which has a Chinese majority and has been regarded by the Chinese people as "kith and kin" - does not stick up for China.

Neither should there be special treatment for Singapore - the Global Times editorial suggested that Beijing should send lower-level officials to the Shangri-La Dialogue, an annual security summit held in Singapore, as it is "a platform Singapore built for the US and Japan, and China has no reason to show support to it".

This may feel like a hard pill for Singapore to swallow, but it is possibly a trend it has to accept - and not entirely negative if the Republic manages it right.

Singapore's officials have often stressed that while the city-state has a Chinese majority, it is a multiracial society and a sovereign and independent country with its own national interests that may not always be similar to those of China.

Indeed, Professor Huang Jing of the Lee Kuan Yew School of Public Policy is of the view that the top Chinese leadership understands the need for Singapore to keep a substantial distance from China politically for its security interest. This is because it is dangerous for Singapore to be seen as a little China because "Singapore's major security threat is not the US or China but the countries around Singapore".

And the Global Times has acknowledged that Singapore's choice of balancing between China and the US is based on the fragility of its security - sandwiched as it is between two giants Malaysia and Indonesia - and its need to rely on the US for "the greatest security guarantee".

If China sees Singapore less as a Chinese society and more as a multiracial sovereign state with its own interests, it might have less expectation that Singapore should support its policies. There would then be less anger and less desire to lash out against or punish the tiny city-state when it sticks up for its own interests against those of Beijing where they are in contradiction.

But while Singapore should stand firm on its foreign policy principles - summarised by Prof Huang as strategic balance, adherence to international law and making no enemies - and not bend to the will of any big power, whether it be China, the US, Japan or India, it should also be sensitive to the feelings of the Chinese and have some flexibility in managing its ties with them.

The Chinese have a saying, jiang xin bi xin, to put oneself in somebody else's shoes, and Singapore officials could do this when interacting with the Chinese. This includes giving face to their Chinese interlocutors rather than being overbearing.

There was a time when the Chinese were eager to learn from Singaporeans and willing to take criticism and even ridicule on the chin, but not any more. Singaporeans who have been in China for decades tell me that the attitude now is: "Hey, you are in my country, you adjust to us, not we to you."

China was once poor and weak, but no longer, and it pays to remember that. And the rise of China is bringing it into friction with the dominant power in the region, the US, making it hard for countries in the region to maintain neutrality between the two rivals.

Two other Chinese phrases that I've learnt from living in Beijing and Taipei that could be useful here are gei ta ge tai jie xia - give one a chance to extricate oneself from an awkward position - and tui yi bu, hai kuo tian kong - if each side would take a step back or give way, things will be as boundless as the sea and the sky.

In other words, never push anyone against the wall, but give each other room to manoeuvre.

Where it is impossible to yield, taking care to explain clearly and with empathy for the other party would go some way towards gaining some understanding.

If Singapore manages it right, a normal relationship with its giant neighbour can also be strong, mutually respectful and mutually beneficial.

Lianhe Zaobao launches English version of Belt and Road portal

By Marissa Lee, The Straits Times, 16 Aug 2017

Lianhe Zaobao, the Chinese flagship newspaper of Singapore Press Holdings (SPH), unveiled the English version of its Belt and Road portal yesterday.

The portal - - is a joint project of SPH and the Singapore Business Federation (SBF) that aims to satisfy the increasing demand for news relating to the ambitious Chinese initiative.

It will also highlight Singapore's role in the initiative and lend readers a regional perspective on the developments.

A Chinese-language portal that was launched in March last year has amassed more than 11 million page views, with visitors coming mainly from the Greater China region, Singapore, other South-east Asian countries and the United States.

SPH deputy chief executive Anthony Tan said: "With the Belt and Road Initiative garnering prominence regionally, there is demand for a trusted website that carries news and developments.

"The Chinese website has gained good reputation since its launch for its in-depth coverage. We are sure that the English version will build on the strengths and reach out to a wider audience going forward."

The portal is featured as a special section on and is free to access. It includes an overview of the project, news, analysis, and a calendar of related activities.

The Belt and Road Initiative was first raised by Chinese President Xi Jinping to promote key infrastructure projects along the Silk Road economic belt and the 21st century maritime Silk Road.

It is China's top national-level strategy.

* How Singapore can gain from Silk Road project
It has been touted as one of the most ambitious plans of the 21st century so far. China's Belt and Road Initiative has not only gained attention because it spans Asia, Africa and Europe and covers 60 per cent of the world's population, but also because the participating countries cover around a third of the world's gross domestic product and world trade. They also contain 60 per cent of the world's population. Claire Huang looks at how it could help Singapore businesses and whether it will live up to its hype.
By Claire Huang, Hong Kong Correspondent, The Straits Times, 3 Mar 2018

What is the BRI?

Unveiled in late 2013, the Belt and Road Initiative (BRI) - formerly known as One Belt, One Road - is Chinese President Xi Jinping's signature foreign and economic policy initiative.

It seeks to place China at the centre of the global trade network by recreating ancient trade routes - now billed as the Silk Road Economic Belt and a 21st Century Maritime Silk Road - across Asia, Africa and Europe.

The BRI is expected to attract trillions of dollars in infrastructure spending in 60 countries by connecting Asia, Africa and Europe over land through Europe-Asia continental roads, and sea routes through the South China Sea and Indian Ocean. This will be achieved through the use of rail, roads, waterways, airways, pipelines and information highways.

What is its current status?

By the end of last year, almost US$50 billion (S$68 billion) had been invested in economies along the BRI routes.

Western banks are now in a race to fund BRI projects, the Financial Times has reported.

So far, the Asian Infrastructure Investment Bank has given an initial capital of US$100 billion.

China has also begun financing a power distribution upgrade in Bangladesh, rail networks in Indonesia, Africa and Laos, as well as maritime infrastructure in Pakistan and Oman.

At maturity, investment in the BRI is expected to reach US$4 trillion. But it has not all been smooth sailing. In early December, Pakistan, Nepal and Myanmar backed out of three major hydroelectricity projects, worth some US$20 billion in total, planned by Chinese companies.

What role does Singapore play?

Singapore has been China's largest foreign investor since 2013 and was one of China's top trading partners in Asean in 2016.

From 2013 to 2016, Chinese investments related to the BRI reached US$60 billion.

Singapore is one of the top recipients of China's outward BRI investments, receiving around a third of them since 2015, while 85 per cent of China's inbound investments from BRI countries make their way into China through Singapore.

In September last year, Mr Xi and Prime Minister Lee Hsien Loong reaffirmed the three platforms of collaboration under the BRI - infrastructural connectivity, financial connectivity and third-country collaboration, such as joint training for officials from BRI countries.

BMI Research infrastructure analyst Christian Zhang says that many BRI countries have underdeveloped regulatory, legal and financial systems, so organisations will look to Hong Kong and Singapore as stable, low-risk "middle grounds" for forging such deals.

"The two economies are already home to many international contractors, consultants and financiers, reinforcing the advantages offered by their strategic location along the routes," he said.

What's in it for businesses?

The key areas of investment opportunities are in infrastructure, transport, finance, insurance, trade, professional services, e-commerce, technology and innovation.

Singapore companies have been actively pursuing BRI opportunities in sectors such as real estate development, energy, shipping and logistics, as well as publications and new media.

These include the joint venture in 2015 between Ascendas-Singbridge and China Machinery Engineering Corporation in industrial and business park investments and developments across Asia, and the agreement between Sembcorp Industries and Chongqing Energy Investment Group to work on areas such as renewable energy projects, township development and overseas energy projects.

International Enterprise (IE) Singapore and the Singapore Business Federation have also been matching local firms with Chinese partners and other interested parties.

Singapore is the largest clearing centre for Chinese yuan payments outside of China and Hong Kong, and IE Singapore signed BRI agreements with major Chinese banks to increase financing and Chinese partnership options for local companies.

IE Singapore also established connections with multilateral Chinese financial institutions to help Singapore companies tap the available funding, regardless of size and project value.

These financial institutions are mandated to provide funding support for BRI projects.

Are there risks involved?

Observers note that the success of the BRI in areas such as Central Asia and Russia is not guaranteed. Beyond the specific difficulties in these regions, China also has to work with countries which have been less than enthusiastic about the BRI, such as India and Japan.

There are also strings attached to receiving development help from China. Last December, Sri Lanka formally handed over its strategic port of Hambantota to China in order to reduce its debt to Chinese firms that have invested billions into port and maritime infrastructure there.

There is a growing realisation among poorer countries that Chinese proposals to build infrastructure come at a high price.

In addition, China has been an active communicator of reforms and of opening up its economy to the world. But critics have dismissed this as rhetoric, pointing to China's foreign direct investment (FDI) policies. They argue that reciprocity is a key to BRI's success.

Last year, Chinese outward FDI amounted to US$111 billion - about four times higher than in 2012. However, inward FDI into China stood at US$40 billion (excluding investments from Hong Kong) - a wide disparity and a sign that China has much room for improvement to allow outsiders greater access.

This has led to countries like the United States and members of the European Union pushing for greater reciprocity on this front.

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