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WhyItMatters

S'pore useful to Silk Road plan

At first glance, there appears to be little in the Belt and Road initiative for Singapore. For this Chinese mega-project is mainly about building roads, railways, ports and industrial parks in countries along two trading routes linking Asia, Africa and Europe by land and sea.

Singapore, which occupies an important position along the sea route, already has a bustling seaport and a well-connected airport that are important transport nodes in the region. And it also has well-developed industrial parks.

China says its ambitious plan is to boost growth for itself and developing countries in its neighbourhood and beyond as it revives the two ancient Silk Road routes through infrastructure building.

Some analysts put total funding needs of the Silk Road projects at about US$1 trillion (S$1.4 trillion). Such a scale requires capital and expertise beyond what the Chinese government and the governments of participating countries can provide.

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This is where Singapore can play up its relevance despite not having any major Silk Road projects on its shores. It can help China and the other countries raise funds and offer technical know-how in urban planning, especially by roping in the private sector.

As a financial centre, Singapore can broker deals involving capital markets and institutional investors such as insurance companies and pension funds to finance these infrastructure projects. Singapore can also share its experience in developing industrial parks and designing infrastructure projects.

At the company level, Singapore firms, with their better knowledge of local conditions in the region, can help their Chinese counterparts navigate the business environment in South-east Asia. This complementary role will go a long way in supporting the success of this long-term undertaking described by Chinese President Xi Jinping as "a project of the century".

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A version of this article appeared in the print edition of The Straits Times on May 20, 2017, with the headline 'S'pore useful to Silk Road plan'. Print Edition | Subscribe