Singapore can play a key role in helping China's ambitious One Belt, One Road (OBOR) initiative reach its full potential, said Minister in the Prime Minister's Office Chan Chun Sing yesterday.
He told a forum that while the initiative was inspired by the ancient overland and maritime trade routes, it will need to incorporate other dimensions of connectivity to really flourish - and this is where Singapore can help.
"To me, whether it's One Belt, One Road, or the Maritime Silk Road, it goes beyond the two dimensions of conventional land and sea connectivity. It will be what I call a five-dimensional connectivity - that's land, sea, air, data and finance," he said.
The joint Singaporean and Chinese government project, the Chongqing Connectivity Initiative, could be where Singapore adds value, he said. The initiative has identified four areas for bilateral collaboration: finance, aviation, transport and logistics, and infocommunications technology. Mr Chan said it aims to create a "dumb-bell effect", namely, to catalyse the development of the two ends of the "dumb-bell" - in Chongqing and in Singapore.
"It's not just about foreign direct investment (FDI) flowing from Singapore to China. It's about how China... will also want to push its FDI into the world for... more sustainable returns for its ageing population," said Mr Chan, who was speaking to about 500 participants at the second Singapore Regional Business Forum held at The Ritz-Carlton.
"China can use Singapore as a platform to reach out to South-east Asia and the rest of the world.
"Singapore, on the other end of the dumb-bell, can bring in services to catalyse the development of China's western region. The creation of this dumb-bell effect will allow Singapore to play a role that is in accordance with China's needs."
In a separate panel, banking leaders elaborated on Singapore's role in the OBOR initiative as an infrastructure financing hub. Panellists said Singapore could play a key role in infrastructure finance for the region, a process that is well under way with banking experts in that field relocating here. But the private sector here faces several challenges in fighting for a slice of the cake.
OCBC Bank chief executive Samuel Tsien pointed to tough competition from the public sector due to the proliferation of financing via the Silk Road Fund, as well as the Asian Infrastructure Investment Bank.
Recounting his experience meeting a China Development Bank official, Mr Tsien said he had asked why no commercial banks were involved in the Jakarta-Bandung high-speed railway project. He was told that the bank had too much money and not enough projects. "As commercial banks, we really need to partner the policy banks in order to find opportunities that we cannot identify alone," he said.
DBS Bank head of project finance Lim Wee Seng said there was no lack of funds for the huge sums needed for infrastructure in the region, but that there was a lack of "bankable projects" due to institutional capacity. He urged the private sector to work with governments to develop more projects.
"This could be a potential area for Singapore and China to collaborate in," he said, adding that Singapore could bring in its urban-planning skills, and China its strengths in construction and sources of financing.