S$30b to support S’pore and China firms in One Belt, One Road projects

SINGAPORE — About S$30 billion of financial support will be made available to Singapore and China companies investing in projects under the One Belt, One Road (OBOR) initiative through Singapore, following a Memorandum of Understanding (MOU) between the two countries.

The MOU, signed by International Enterprise (IE) Singapore and China’s state-owned China Construction Bank (CCB) yesterday, is the latter’s first such partnership with a Southeast Asian country. As a start, the two have facilitated project discussions between a group of more than 30 Singapore and China companies to explore collaborations in infrastructure and connectivity, as well as info-communications and technology.

“These are two topics we are starting off with, but it’s not the only two sectors that can be covered by this initiative. I think there are a lot more sectors in urban development, in energy sectors that we can cover … I think One Belt, One Road is something major, we cannot afford to not participate in it and find some business opportunities there,” said Mr Ho Chee Hin, IE’s China group director.

Mr Ho was speaking to TODAY at the sidelines of the One Belt, One Road Infrastructure and Capital Market Financial Services Forum yesterday, where the MOU was inked.

Minister in the Prime Minister’s Office Chan Chun Sing, who witnessed the signing, said in a keynote address that China’s overseas direct investments (ODI) will overtake foreign direct investments into China in the near future.

“The area of greatest need in South-east Asia is infrastructure investment. There is tremendous potential for China to direct part of its growing ODI into this market to earn it a long-term rate of returns. Then the question is: Who should partner China and how should they do this?” he said.

Mr Chan added that China can leverage Singapore’s knowledge of South-east Asian markets, certainty of rules and regulations, as well as tapping investment and supporting services here.

Mr Zheng Chao, Minister Counsellor for Economic and Commercial Counsellor’s Office of the China Embassy in Singapore, agreed with Mr Chan. He noted that investments from Singapore into China accounted for more than 80 per cent of total investments from the 64 countries along the OBOR economic belt. The MOU will also see CCB explore the setting up of a centre in Singapore to provide project financing and related services required in investments under the OBOR initiative.

At the same event, the Chinese bank also inked an MOU with Singapore Exchange (SGX) on the development of the capital market in Singapore. CCB will work with SGX to encourage more Chinese companies to list in Singapore, issue bonds, undertake mergers and acquisitions, establish cross-border fund management services and other capital market financial services.

There are 120 Chinese companies and 103 yuan bonds on the SGX.