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Speeches
25 Oct 2018 Updated 03 Jan 2019

Speech by Minister Chan Chun Sing at the Inaugural BRI Investment Forum

 SPEECH BY MR CHAN CHUN SING,

MINISTER FOR TRADE AND INDUSTRY,

AT THE SINGAPORE-CHINA BELT AND ROAD INITIATIVE INVESTMENT FORUM 2018 ,

ON THURSDAY 25 OCTOBER 2018 AT 1050 HRS

RITZ CARLTON MILLENIA, SINGAPORE

 

Promoting China’s Integration with the Region and Forging Closer Partnership in Belt and Road Initiative”

His Excellency Ning Jizhe (宁吉喆), Vice-Chairman of PRC National

Development and Reform Commission,

Distinguished Guests,

Ladies and Gentlemen,

Good Morning.

    Introduction

  1.  I would like to begin by extending a very warm welcome to Vice Chairman Ning and his delegation to Singapore. Today’s forum is a useful platform to explore how China and Singapore can deepen our partnership in the Belt and Road Initiative. 2. Singapore has been a consistent partner of China’s integration with the global economy. We believe that a stable, prosperous and progressive China is good for China, the region as well as the world. We supported China joining the WTO in 2001.

  2. We also believe that the establishment of the Asian Infrastructure Investment Bank (AIIB) can make a constructive contribution to the global economy.

  3. Over the years, Singapore and China have also developed longstanding and wide-ranging economic relations. The nature of our relationship, along with the major Government-to-Government projects, has evolved in tandem with China’s development needs and priorities.

  4. The historic visits by Mr Lee Kuan Yew to China in 1976, and Deng Xiaoping to Singapore in 1978, laid the foundations for Singapore-China bilateral relations. In 1994, Singapore and China jointly established our first Government-to-Government project, the Suzhou Industrial Park, to promote the exchange of development experiences. This was followed by the Sino-Singapore Tianjin Eco-city and the China-Singapore (Chongqing) Connectivity Initiative. We now have seven Provincial Business Councils and other broad-ranging economic cooperation projects with different levels of the China government.

  5. Beyond economic cooperation, we also have broad and deep cooperation in the areas of security, social governance, legal, cultural and leadership development. All these are possible based on the principles of mutual respect, mutual trust and mutual benefits.

  6. The Belt and Road Initiative, first announced in 2013, is yet another step taken by China to deepen its linkages and integration with the world. In 2015, China’s Overseas Direct Investment (ODI) exceeded its Foreign Direct Investment (FDI) for the first time as more Chinese companies expanded their operations globally. This new trend is significant. China has shifted from attracting FDI in the first 40 years of China’s economic growth to increasingly having the ability to export its capital and expertise to the rest of the world.

  7. Some international media have expressed concerns with this development. Others have questioned the intent and financial viability of the various projects in the Belt and Road Initiative. In the global context, we have also seen the rise of anti-globalisation sentiments and the escalation of trade tensions.

  8. The success of the Belt and Road Initiative will depend on how we, as partners and stakeholders, work together to shape this initiative going forward. As we mark the fifth year of the Belt and Road Initiative, it is important that we address some of these challenges constructively together, and realise the full potential of the Belt and Road Initiative.

    Progressing Together


  9. How can we, as members of the global economy, ensure that we have a stable and predictable environment where business can thrive and the global economy can grow healthily? I would like to suggest four principles that can guide us as we navigate these global challenges, work together on the Belt and Road Initiative, and enhance international cooperation:


  10. First, to evolve the multilateral system we must progress with the times. (制度进化)

  11. The World Trade Organisation (WTO) has long represented the multilateral trading system, which is the foundation upon which global trade and investment takes place. Notwithstanding this, the WTO has existed since 1995 and many of its rules were borrowed from the 1948 General Agreement on Tariffs and Trade (GATT). Given the passage of time, there is a need to update and strengthen WTO rules to deal with new issues like the emergent digital economy. For multilateralism to remain relevant, WTO rules must evolve to suit the modern-day context. Members of the WTO need to work together to evolve the existing trade rules to suit this context. We also need to create new rules for the digital economy. We can start with like-minded partners, who have sound economic understanding and demonstrated political will, to exercise pathfinder leadership.

  12. Second for all the projects that we are undertaking, we must allow market discipline to run its course. (市场纪律)

  13. Market discipline means each and every project must be evaluated thoroughly according to market principles. The prospect of financial loss and considerations for long-term sustainability ensure greater accountability, encourage healthier risk management and create more financially prudent and viable projects.

  14. Projects with the greatest chance of success are those uncoloured by suggestions of non-economic considerations and poor financial management. Projects held up to high standards of financial prudence and probity will inspire confidence and bring real benefits to the people we serve.

  15. Thirdly, we must continue to work hard to integrate our production and value chains.

  16. Protectionism will result in the fragmentation and isolation of production and value chains. Instead, we should work together towards a more, not less, integrated and interdependent eco-system. This will encourage stronger partnership with shared ownership of the global system. However, such integration also necessitates adjustments at the local levels for us to achieve nett benefit at the global level. Countries must distribute the nett gains from globalisation across our respective societies to help those who have fallen behind – absolutely or relatively – to adjust. Otherwise, we risk local backlash with global consequences. But regardless, the trends towards global integration of production and value chains is inevitable. It will be very difficult for anyone to find a product that is only made in one country.

  17. Fourth, ensuring benefits for all. (互惠共赢)

  18. Projects must benefit an expanding circle of stakeholders -- the local community, the region and the world. By ensuring that there are benefits for all, stakeholders have a vested interest and responsibility in the projects’ successes.    

  19. In this year’s World Economic Forum at Davos, I said that any project can have three levels of meaning and purpose. Any project, including the Belt and Road Initiative, can be likened to building a house at one level; or building a precinct at another level; or building a metropolis at the highest third level, depending on the ambition and which of the three levels it aims to achieve.    

  20. The first level is constructing a house. This means that the project is commercially viable and benefits oneself. The second level is developing a precinct. The project catalyses the regional economy. Peoples’ lives are improved through better access to resources and markets. To achieve this, software is as important as hardware. The third level is building a global metropolis. The project seeks to capture the imagination of its inhabitants, unleash the potential of the people we serve and inspire us to contribute for the greater good of our people. This is also in line with President Xi Jinping’s vision for countries to jointly build a community of common destiny for all mankind (人类命运共同体). This highest level of aspiration can only be achieved if we adopt an inclusive mind-set to work together across countries; a professional mind-set to evaluate the costs and benefits of the project transparently according to market discipline; and a stewardship mind-set to deliver the project honestly for the good of the current and future generations.

  21. Forging Win-Win Partnerships

  22. Singapore supports an inclusive, market-disciplined and transparent Belt and Road Initiative. We are a founding member of the AIIB. Singapore and China have also identified infrastructure connectivity, financial connectivity, third-party cooperation and professional services as areas where we can further enhance our cooperation.

  23.  As a key global trading and financing hub, Singapore can play a part in the Belt and Road Initiative in several ways.

  24.  First, Singapore can be a pathfinder for new ideas.

  25. For example, the China-Singapore (Chongqing) Connectivity Initiative Southern Transport Corridor (CCI-STC) reimagines existing trade flows in Western China. In the past, goods from Western China have to be transported through the Yangtze River, before it is exported. Now, there is the option to travel overland from Western China to Guangxi and then connect to Southeast Asia via the maritime route. The CCI-STC has effectively connected the “Belt” with the “Road”, which were once seen as two separate routes. What used to take three weeks can now be achieved in less than one week, at roughly the same cost.

  26.  Second, Singapore can be a launch-pad for Chinese companies to venture into third-party markets, especially in Southeast Asia.

  27. Singapore and China companies can tap on each other’s complementary strengths, and forge closer partnerships in third-party markets. There are already some successful partnerships. For example, YCH’s partnership with Forchn Holdings (富春集团) combines each other’s capabilities in supply chain management technologies and ecommerce services, which will allow the partners to explore logistics investment opportunities along the Belt and Road.

  28. Third, Singapore can offer our expertise in financing and legal advisory services, and leverage the numerous players across the infrastructure value chain present in Singapore to enhance the sustainability of BRI projects.    

  29. A recent effort was the US$300 million Sembcorp Myingyan [minzhan] power project in Myanmar. It was financed by Multilateral Development Banks (MDBs), namely the Asian Development Bank, the International Finance Corporation, and the AIIB, as well as private sector financiers including Clifford Capital, DBS Bank, DZ Bank and Overseas- Chinese Banking Corporation.    

  30. The project was also supported by advisory services firms including Allen & Gledhill, Mayer Brown, KPMG, Environ Singapore, ERM Singapore and Worley Parsons.    

  31. As the first internationally and competitively tendered power project in Myanmar, this project helped to set an important benchmark for private sector financing and has won several awards.

  32. Tapping on Singapore’s robust infrastructure ecosystem, we hope to continuously refine the way we approach infrastructure development, to find new ways to mitigate risks, and to increase the bankability of projects. A robust dispute resolution mechanism will also benefit investors and the host country, given that infrastructure projects are often long-term and capital intensive. Singapore can serve as a complementary and neutral venue for Chinese companies looking for an alternative venue for dispute resolution in Asia.

  33. Against this backdrop, Singapore launched two initiatives earlier this week. The first initiative is Infrastructure Asia (亚洲基础设施 办公室), an initiative led by Enterprise Singapore and Monetary Authority of Singapore. Infrastructure Asia serves as a bridge for different industry players across the infrastructure ecosystem, multi-lateral development banks (MDBs) and Governments. I hope that interested stakeholders will tap on this network to better access regional opportunities. Infrastructure Asia is an open platform. It welcomes participation from Chinese and global companies. This is what we envision as our role - bringing the best from all over the world for the benefit of the industry.

  34. The second initiative is the newly introduced Singapore Infrastructure Dispute-Management Protocol (SIDP) for large infrastructure project, which takes a more preventive approach by proactively managing disputes and uses an array of dispute resolution options. Such financing and legal services are the strengths of the Singapore ecosystem. But not just limited to Singapore, it is the strength of the Singapore network leveraging the global system.

  35. Conclusion

  36. Today’s forum hence provides a timely and good opportunity for business leaders from both Singapore and China to come together to discuss how we could work together to promote China’s further integration with the global economy, and unlock opportunities in the Belt and Road Initiative.

  37. Singapore also looks forward to closer partnership with NDRC and participating in the 2nd Belt and Road Forum in Beijing next year.

  38. Thank you and I wish everyone a fruitful day ahead.