One Belt, One Road not 'by China, for China'

Singapore

PANELLISTS at the Singapore Regional Business Forum on Tuesday said that even though the One Belt, One Road (OBOR) development framework and setting up of the new Asian Infrastructure Investment Bank (AIIB) are often seen as China-driven initiatives for China's own benefit, this is not very true.

In fact, the Chinese government has been trying to promote both as regional platforms, and AIIB has already begun funding projects in neighbouring countries like Bangladesh and Pakistan.

The OBOR, first unveiled in 2013, is a key part of China's development strategy to deepen economic cooperation with countries in Asia, Europe and Africa. It has the potential to benefit some 60 countries with a population of 4.4 billion people along the economic belt, and much of the investments is likely to be in infrastructure.

Teo Eng Cheong, international CEO of Surbana Jurong, said: "Because it was announced by President Xi Jinping, people will always associate the One Belt, One Road with China. But China has been quite deliberate in trying to share the ownership so that it is not seen as really Chinese-driven, but as an initiative that will be co-driven by whichever countries are involved."

He listed the benefits that the OBOR initiative will bring to China. Chinese investors or companies can tie up with regional or local companies to jointly develop infrastructure projects. Neighbouring countries can be developed to eventually become markets for China's products. China can enjoy better returns on its official reserves, internationalise its research and development efforts, and extend its political influence, he said.

China will still likely be involved in many of the OBOR projects, but the initiative also opens up many opportunities that other countries can take advantage of.

All the benefits to China do not negate the positive impact it can have on the countries in this region, because China has made it very clear that it is looking at win-win propositions, Mr Teo said.

Other countries should thus use this opportunity to welcome foreign investments and expertise, and seek to structure their infrastructure projects attractively. They should also be willing to share profits with private companies in the case of public- private partnerships.

"This is something that can be done in a mutually beneficial way and China has been fairly transparent about it. For me, I won't get too hung up about who initiated it," he said.

Jasper Wong, senior vice-president, infrastructure & project finance, corporate banking overseas, at United Overseas Bank, said that a lot of people think that AIIB funds only Chinese companies and projects, but the bank has already been financing projects in Bangladesh, Pakistan and Indonesia.

"These projects are run together in concerted effort with the World Bank, International Finance Corporation, Asian Development Bank, and European Bank for Reconstruction and Development. What this means is that AIIB is taking the experience from other institutions in terms of how to roll out social infrastructure projects."

So far, these projects include building a hydropower extension and national motorway in Pakistan, and upgrading slum areas in Indonesia.

Mr Wong also noted that AIIB has been more active on the public sector side of projects, and "not crowding out the commercial banks". By this, he means that AIIB has been taking on the more difficult, high-risk deals that commercial banks are unable to finance.

Some 500 representatives from 35 countries and regions attended the second Singapore Regional Business Forum, organised by the Singapore Business Federation.