Written reply to PQ on Opportunities for Local Businesses in One Belt One Road Projects

Question:

Mr Zaqy Mohamad: To ask the Minister for Trade and Industry (Industry) (a) what are the Ministry's plans to help local businesses exploit opportunities in the various One Belt One Road projects across Asia; and (b) what is the addressable market for local companies and what are the Ministry's targets in helping local firms engage in related Government-to-Government initiatives.

Written reply:

1. The Belt and Road (B&R) initiative opens up opportunities for Singapore companies to partner the growing pool of Chinese companies venturing into various countries across Asia.  The government agencies are helping our companies prepare themselves for these opportunities by enhancing their capabilities, internationalisation efforts, and deepening their expertise in our region which is a key Belt & Road market.  For example, Singapore companies can tap on IE Singapore’s enhanced Internationalisation Finance Scheme (IFS) and the new Global Ready Infrastructure Talent (GRIT) Programme, which provides companies with greater financing, risk-sharing and talent support as they undertake mid-to-large scale infrastructure projects in the region.  IE Singapore has also recently launched the “Go Southeast Asia” Award to match high-potential final-year undergraduate students with Singapore companies and support their internships in Southeast Asia.

2. ASEAN is a key B&R market for the internationalising Chinese companies.  In 2016, Singapore was China’s largest overseas investment destination amongst countries within the B&R initiative, constituting 29% of China’s total ODI in B&R countries[1].  Our local companies bring market knowledge of regional countries, and have complementary strengths in the areas of transport and logistics, utilities, mixed-used park development, construction and financing.  A recent example of such collaboration is the joint venture between Surbana Jurong and the China Highway Engineering Consulting Corporation to pursue highway and infrastructure-related projects in the B&R countries. 

3. Within China, the Chongqing Connectivity Initiative (CCI) is a key priority and demonstration initiative that Singapore and China are collaborating on under the B&R.  As part of this collaboration, IE Singapore actively introduces Singapore companies to partners and agencies in China to access opportunities in Chongqing and Western China across different industry sectors.  The Chongqing Logistics Development Platform (CLDP)[2] and the Multi-modal Distribution and Connectivity (DC) Centre[3], both of which involve Singapore and Chinese companies, are examples of such projects and opportunities. 

4. Singapore has been an early supporter of China’s B&R initiative.  In June 2015, we became one of the founding members of the Asian Infrastructure Investment Bank (AIIB).  In November 2015, China and Singapore launched the Chongqing Connectivity Initiative, the third Government-to-Government project between Singapore and China.  More recently, Singapore signed an MOU with China in May to bolster our collaboration on projects and opportunities arising from the B&R initiative.  Through these efforts, our companies will have the opportunity to invest and participate in the B&R.  IE Singapore will continue to connect Singapore companies with key Chinese and foreign companies to explore B&R ventures in China as well as in third-party markets through its network of overseas centres.

[1] Refers to new investments. Source: PRC Ministry of Commerce.

[2] The CLDP, which is the core collaboration platform formed by PSA International, Pacific International Lines (PIL), Kerry Logistics (Singapore), together with six Chongqing companies, will integrate logistics resources within Chongqing, and develop multi-modal logistics standards and practices for river, railway, air and road transport modes. It will facilitate the development of logistics facilities or services along new trade and logistics corridors, provide supply chain solutions, develop value-added services and propose policy innovations to catalyse market demand and adoption of international best practices.

[3] The DC Centre to be developed by PSA International, PIL, YCH, Kerry Logistics and three Chongqing companies will plan, develop, manage and optimise multi-modal operations while coordinating and integrating logistics resources across neighbouring logistics centres. It will boost the consolidation of inland cargo in Chongqing, increasing its competitiveness and connectivity with the rest of China.