Singapore has signed an agreement with China to strengthen cooperation on its ambitious Belt and Road Initiative, aiming to expand the city-state’s involvement.
The two nations signed a memorandum of understanding in Beijing to set up a working group to formulate plans for greater collaboration between companies from both countries around the region.
Singapore would also work with financial institutions to assist with financing and consulting procedures.
The deal was signed by Singapore’s National Development Minister Lawrence Wong, while China’s Prime Minister Li Keqiang and Singaporean counterpart Lee Hsien Loong attended the signing ceremony.
It is not only the Singaporean authorities that are looking to benefit from Chinese expansionism.
Of more than 1,200 listed companies that can trade under the Stock Connect programme linking the stock exchanges in Hong Kong, Shanghai and Shenzhen, 65 per cent have predicted that they would increase their Belt and Road Initiative trade in the next three years, said a report by three of China’s biggest stock exchanges.
The report said was that China’s state banks were seeking overseas financial influence by increasing Belt and Road support.
“Funds and loans acquired by listed companies in Belt and Road countries were mainly from offshore commercial lenders. But mainland commercial banks are fast catching up,” the stock exchanges reported.
The Singaporean deal “will pave the way for closer partnerships between our companies in third-party markets, one of the key cooperation pillars that Singapore and China have identified under the Belt and Road Initiative”, said Singapore’s trade minister Lim Hng Kiang. “Singapore’s strength as a key infrastructure, financial and legal hub in the region will add value to Chinese companies expanding along the Belt and Road.”
Belt and Road, proposed by Chinese President Xi Jinping in 2013, has been dubbed China’s Marshall Plan and aims to connect to Europe and Africa along five routes.
The project has become vital to economic growth in Asean’s financial and trade hub, although Singapore was slow to get involved in the scheme. Lee did not attend the first Belt and Road conference hosted by China in May last year.
But while China continues to build artificial islands in the South China Sea, Singapore cannot afford to alienate US, on which it relies for security.
Xi said this week in Hong Kong: “We want to compile an index for investors to capture investment opportunities brought by [Belt and Road], and for companies to gain better knowledge about their peers’ progress under the programme.”
Singapore’s busy docks will hope to prosper under Belt and Road. Picture credit: Flickr