There is no altruism in China's grand plan to revive the ancient trade routes between China and the West - the updated overland economic belt and maritime Silk Road, or "one belt, one road". Economic self-interest and big power projection are clearly at play. But the initiative is not to be dismissed, as observed recently at the Singapore Summit. The Chinese have not only set up a US$40 billion (S$57 billion) Silk Road fund but also the US$100 billion Asian Infrastructure Investment Bank for the purpose of connecting the cities and ports along the two routes. This offers opportunities aplenty for Asean nations, Singapore included.
China has good reasons for pushing in this direction. Most immediate of these is to deal with its problem of overcapacity as a result of years of breakneck growth. Consequently, since the announcement of the "one belt, one road" plan, there has been movement of cement factories overseas like those resited in Indonesia, Vietnam and Laos. China also wants to open up new markets for its products and production bases for its labour-intensive industries as it moves up the value chain. So, for developing countries along the routes, the initiative would mean their gaining infrastructure they would otherwise not have been able to afford. They also stand to benefit from investment in factories, the creation of jobs and access to the vast Chinese market. As one of the aims is to stimulate economic growth in China's own less developed regions, however, these nations might also see some competition as a result.
Singapore is well placed to play a role in this orchestration, with its developed financial centre and expertise in the services industries including port operations, as well as its position at the confluence of major sea and air routes . It has already been asked by the Chinese to start a project in one of the cities in the less developed west, with a focus on services, to connect with the overland route. It can also play a role linking China with countries in South-east Asia, given its in-depth knowledge of the neighbourhood.
However, some countries in the region are somewhat wary about the initiative. The Indonesians have had some unhappy experience with Chinese investments. For example, infrastructure loans came with Chinese material and workers, ending up being a source of tension and adding to the country's trade deficit with China. There was also little by way of technology transfer sought by developing economies. The West might be sceptical of any initiative that lies outside the ambit of its trade rules, labour practices and protection of intellectual property, but trading nations must take a pragmatic approach and exploit opportunities that arise while insisting on certain safeguards. For example, social and environmental standards should be upheld and broad strategic interests should not be bargained away.
