SPEECH BY SENIOR MINISTER OF STATE MS SIM ANN, AT THE BELT AND ROAD INITIATIVE (BRI) FORUM BY HUMAN CAPITAL (SINGAPORE), ON 4 MAY 2018, 10.00AM, AT RESORTS WORLD CONVENTION CENTRE
Mr. Richard Magnus, Chairman of Human Capital Singapore
Mdm Ho Geok Choo, CEO of Human Capital Singapore
Distinguished guests
Ladies and Gentlemen
Introduction
1. I am pleased to join you this morning at the Belt and Road Initiative (BRI) Forum and would like to thank Human Capital Singapore for inviting me here. Today’s event is a valuable platform for businesses, especially Small and Medium Enterprises (SMEs), to understand the opportunities the BRI presents, and how to ride on this wave, as the BRI enhances connectivity and integration of the region.
BRI as a Key Pillar of Bilateral Cooperation
2. Singapore is an early supporter of the BRI. We are a founding member of the Asian Infrastructure Investment Bank (AIIB) and signed an overarching MOU on BRI cooperation with China in May 2017. During Prime Minister Lee’s visit to China in April 2018, Singapore and China further signed an MOU on Developing Third Party Market Cooperation to forge closer partnerships between Singapore and Chinese companies along the Belt and Road.
3. More Chinese companies have internationalised along the Belt and Road, particularly in Southeast Asia, and are actively looking for local partnerships in recent years. To date, over 7,500 Chinese companies have set up operations in Singapore. Singapore was also China’s largest overseas investment destination along the Belt and Road in the last two years, with Chinese companies like Alibaba and ofo being familiar names to Singaporeans. The BRI hence presents opportunities for Singapore companies to collaborate with Chinese companies, including in internationalising into third markets.
Singapore’s Value Propositions in the BRI
4. The BRI is a key pillar of economic cooperation between Singapore and China. There are three areas where Singapore and China can further deepen our cooperation.
5. First, infrastructure connectivity. The China-Singapore (Chongqing) Connectivity Initiative, or the CCI, is a key demonstration project of the BRI. In particular, the CCI Southern Transport Corridor, or the STC, connects the overland Silk Road Economic Belt with the 21st Century Maritime Silk Road, offering a faster and more direct trade route between Western China and Southeast Asia. Companies hoping to export to or import goods from Western China can now use the Southern Transport Corridor, which connects Chongqing to Singapore via Guangxi.
6. Last August, Chongqing, Guizhou, Gansu and Guangxi signed an MOU to collaborate on the Southern Transport Corridor. More Western Chinese provinces like Sichuan, Yunnan and Shaanxi are also coming on board this initiative, thus expanding the potential and network of this transport corridor.
7. Second, financial connectivity. Infrastructural projects under the BRI are often large-scale and require significant financial expertise to structure. Singapore is an international financial centre and one of the largest offshore RMB centres in the world. Our banks are actively helping Chinese companies tap the BRI and expand into Southeast Asia. Singapore’s financial centre can play a useful role in structuring and providing specialised insurance coverage for Belt and Road infrastructure projects. Today, two-thirds of Southeast Asia infrastructure projects are arranged by Singapore-based project finance teams.
8. Third, third-party market cooperation. As a key regional financial, legal and infrastructure hub, Singapore can value-add to Chinese companies’ ventures along the Belt and Road. Singapore and Chinese companies share complementary strengths and could potentially forge closer partnerships in sectors such as transport & logistics, mixed-use parks, and e-commerce.
9. For example, Surbana Jurong and China Highway Engineering Consulting Corporation signed a joint venture agreement last May to undertake infrastructure-related projects in Belt and Road countries. YCH and Forchn Holdings also announced plans to launch a US$150 million fund in March 2018 to invest in warehousing and logistics assets located in Southeast Asia and China. These examples are evident of Singapore companies’ strengths in possessing the necessary networks, local know-how and cross-cultural understanding that are highly valued by Chinese companies. I encourage more companies to embark on such third-party collaboration and enter new markets to seize opportunities present in the region.
Singapore as a Launchpad to Southeast Asia
10. Regional markets, especially Southeast Asia, present many opportunities for Singapore and international companies. Rapid urbanisation and a burgeoning middle class in Southeast Asia, China and India have resulted in new business opportunities spanning across sectors, such as consumer goods and services, as well as infrastructure.
11. As a leading maritime, trading and professional services hub, companies can tap on Singapore’s strong network of Free Trade Agreements (FTAs) and Bilateral Investment Treaties (BITs) to access the region and beyond. Our reputable and credible legal system, which provides a full suite of arbitration, litigation and mediation services for commercial disputes also provides investors with more confidence to pursue cross-border projects.
12. To harness these growth opportunities in Asia, we announced the establishment of the Infrastructure Office at Budget 2018. The Office aims to support infrastructure development of the region, including through the BRI and bringing together local and international partners across the value chain, including infrastructure developers, institutional investors, multilateral development agencies, and legal, accounting, and financial services providers. I look forward to seeing more companies tap on this platform for information exchange on infrastructure opportunities in Asia, facilitate infrastructure investment and financing.
Supporting Singapore SMEs Internationalisation Efforts
13. The Singapore Government is supportive of companies’ efforts in enhancing capabilities and deepening their expertise in the region. To access opportunities in China and countries along the BRI, companies can partner Enterprise Singapore through various initiatives.
14. Some of these initiatives include the Enterprise Development Grant (EDG) and the Market Readiness Assistance (MRA) Grant. These grants help companies to build capabilities and internationalise. Enterprise Singapore also has the China Ready Programme, which offers in-market experience in cities like Guangzhou and Suzhou. These experiences, coupled with networking opportunities, enable businesses to gain insights on market knowledge and the business environment in China that would otherwise be difficult to attain.
15. In terms of talent development, Enterprise Singapore has the Go Southeast Asia Award, launched in April 2017, which aims to develop future talent pool through internship programmes. Under this programme, interested and high-potential final-year undergraduate students will be matched with Singapore companies for internships in Southeast Asia. The ASEAN Leadership Programme, announced at Budget 2018 and to be launched in the second half of 2018, will also help our business leaders build networks and plan business expansions in Southeast Asian markets. This will ensure that our businesses are well-equipped to seize opportunities present in our region.
Conclusion
16. In conclusion, I would like to welcome more international companies to use Singapore as a launchpad into the region, and to forge closer partnerships with Singapore companies, particularly in the BRI. The government will continue to support our local companies and SMEs to enhance their competitiveness as they internationalise.
17. Thank you.