​Speech by Parliamentary Secretary for Trade and Industry & Education Ms Low Yen Ling at the China Minsheng Investment Seminar on 30 October 2015, 9.05am at Conrad Centennial Singapore

 

Mr Dong Wenbiao,
Chairman of China Minsheng Investment

Distinguished Guests,

Ladies and Gentlemen,

 

1.         Good morning. I would like to thank China Minsheng Investment (CMI) for their invitation to be here today. I am happy to note that the CMI Global Advisory Council (GAC) has chosen to hold its 2nd meeting in Singapore. I understand that this is the first GAC meeting held outside of China.

Singapore-China Economic Relations

2.         Singapore and China celebrate the 25th anniversary of our diplomatic relations this year. To mark this important bilateral milestone, President Tony Tan had a successful State Visit to China in July this year. Similarly, we also look forward to welcoming Chinese President Xi Jinping when he visits Singapore next month.

3.         Trade and investment ties between Singapore and China are substantial and have been growing steadily over the years. China is Singapore’s top trading partner, while Singapore is China’s 3rd largest trading partner in ASEAN. On the investment front, Singapore was China’s largest foreign investor in 2013 and 2014.  Singapore is China’s largest investment destination in Asia, and one of the top investment destinations for Chinese companies investing abroad.

“One Belt One Road” Initiative

4.         The Silk Road Economic Belt and the 21st Century Maritime Silk Road, or collectively known as “One Belt One Road” initiative was first proposed in 2013 by Chinese President Xi Jinping. Since its inception, progress has been noteworthy. Following the establishment of the USD 40 billion Silk Road Fund and the Asian Infrastructure Investment Bank, plans to develop the Bangladesh-China-India-Myanmar Economic Corridor and the China-Pakistan Economic Corridor have also been rolled out.

5.         “One Belt One Road” initiative will not only help to address the USD 8 trillion infrastructure investment shortfall that Asia will be facing in the coming decade, but will also have the potential to further encourage economic integration within the region. In addition, through the establishment of closer physical connectivity, people-to-people ties and interactions would also be strengthened through the “One Belt One Road” initiative.

6.         In order for this initiative to take shape, government support alone is not enough. Collective support of the public and private sectors will be required. In particular, the internationalisation of Chinese companies in recent years has been a key driver for “One Belt One Road” initiative. Outbound investments from China have been growing rapidly, and China’s overseas direct investment (ODI) will soon exceed foreign direct investment (FDI) into China. In addition, over 6,000 Chinese companies have established their presence in Singapore. Many of them are using Singapore as an international or regional headquarters to internationalise.

Opportunities in ASEAN, as a part of “One Belt One Road” Initiative

7.         Singapore is strategically located in ASEAN, one of the key regions under the “One Belt One Road” Initiative. This is not unexpected given ASEAN’s significant market demand for consumer products and services. ASEAN has a growing population of 620 million people and a combined GDP of USD 3 trillion. The rising affluence of ASEAN’s fast-growing middle class, and increase in high net-worth individuals and ageing demographics offer abundant business opportunities for companies looking to get a slice of the ASEAN pie. 

8.         Under the ASEAN Economic Community (AEC) vision, ASEAN will transform into a regional competitive market with free flow of goods, services, investment, skilled labour, and freer flow of capital. Chinese companies can benefit from the lower costs and risks when venturing into ASEAN through Singapore.

Singapore’s role in “One Belt One Road” Initiative

9.         In this regard, Singapore can contribute to the development of “One Belt One Road” initiative in three key areas of connectivity:

10.       First, trade connectivity. Chinese companies can leverage on our strong regional linkages to enter global and ASEAN markets. Our dense network of 21 Free Trade Agreements (FTAs) and Economic Partnership Agreements (EPAs) provides Singapore-based companies convenient access to the global market. Singapore companies are also familiar with Chinese companies and the Southeast Asian market. As such, there can be win-win partnerships between China and Singapore companies as more Chinese companies venture into Southeast Asian markets. This makes Singapore well-placed as an international and regional headquarters for Chinese companies to venture abroad.

11.  Second, financial connectivity. Singapore is an international financial hub and the largest offshore RMB centre after Hong Kong. This makes Singapore an ideal location for Chinese companies to house their project development and project financing functions, and financial and treasury centres.

12.  Third, logistics connectivity. Singapore is an international aviation, maritime, logistics and communication centre. Companies, especially Chinese companies venturing out, can tap on Singapore as a logistics hub and make use of our reliable infrastructure to set up their regional warehousing and distribution centre.

Conclusion

13.       Singapore looks forward to playing a constructive role in the “One Belt One Road” initiative. We would also like to encourage Chinese companies such as CMI to continue to forge closer ties with Singapore companies and proactively explore collaborations. Concertedly, the region can usher in a new era of thriving trade and prosperity.

14.  I wish this seminar a great success. Thank you.