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Singapore businesses bank on China's Belt and Road amid slowdown

SINGAPORE (July 30): Nearly one in three multinational corporations are currently involved in projects related to China’s Belt and Road Initiative (BRI), according to preliminary findings from a joint survey by the Singapore Business Federation (SBF) and accounting firm PwC.

Close to half of the 50 companies surveyed also report having plans to embark on BRI-related projects in the next three years.

A similar study, administered just two years ago in 2017 by the SBF and the Economist Intelligence Unit (EIU), found that only 12.5% of companies were involved in BRI-related projects.

“The cross-border nature of the BRI makes it a significant catalyst in regional infrastructure development and is likely to bring together investors across regions to jointly develop much-needed infrastructure projects, especially for underserved communities,” says Jennifer Tay, a partner specialising in capital projects and infrastructure at PwC, at a media briefing on Tuesday.

Indeed, interest is heating up in the BRI, which was launched by Chinese President Xi Jinping in 2013. And Singapore is positioning itself as a broker for BRI-related infrastructure projects in the region.

“It’s not only just about China,” says SBF chairman Teo Siong Seng. “We hope people can recognize that BRI is for the region.”

Even as its own economic data has slowed recently, Singapore has emerged as a vocal advocate for facilitating much-needed sustainable infrastructure projects in Southeast Asia. The city state has even dedicated a new government agency – Infrastructure Asia – to the effort.

With the BRI seen to improve connectivity, trade and employment opportunities around the world, it could act as a spur for economic growth. And MNCs from Asean seem to be showing keen interest.

For instance, 66% of respondents from Vietnam, 57% of respondents from Singapore and 57% of respondents from Indonesia noted their interest in investing in BRI-related projects.

Additionally, 86% recorded interest in having partnerships with the Chinese government, compared with just 50% who were interested in partnerships with Japan, and 43% for the US.

However, according to preliminary findings from SBF and PwC’s report, a quarter of companies say they are unclear about the opportunities presented by the BRI.

The report, titled “Delving into the BRI: How Regional Players Plan to Leverage on BRI Business Opportunities”, will be launched when Singapore hosts regional infrastructure events on Aug 15-16.

The upcoming summits serve to facilitate more dialogue between businesses and governments to spur investments and involvements in BRI-related projects.

The city state is expecting more than 800 business leaders and senior government officials to attend from 45 countries and regions.

“Effective partnerships are critical to successful infrastructure projects, which are vital for Asia’s long-term growth. [They also] present significant investment opportunities” says Pek Lian Guan, vice-chairman of the SBF.

Pek, who also chairs the SBF infrastructure committee, adds: “Driven by factors such as urbanisation, increase in mobility, trade competitiveness and technological breakthroughs, we see huge potential and demand for infrastructure growth and spending in the region.”