Singapore to Gain from Silk Road Revival

In November last year, Chinese President Xi Jinping met with Prime Minister Lee Hsien Loong of Singapore to discuss the future of Sino-Singaporean relations, and, in particular, Beijing’s upcoming revival of the Silk Road.

The Silk Road

The historically rich and mythical Silk Road is an old overland and maritime route that encouraged the exchange of South and East Asian goods, inventions, and ideas in Europe. Six hundred years later, President Xi Jinping is reviving the Silk Road with his “Silk Road Economic Belt” initiative--otherwise known as the “One Belt One Road” initiative. China will be establishing a $40 billion Silk Road Fund to support the infrastructure investments that will be needed to realize China’s new trade development plans. Additionally, the proposal will be a component of the Asian Infrastructure Investment Bank (AIIB) proposal designed to help underdeveloped Asian countries.

The new foreign-policy initiative is aimed at improving relations and development in Eurasia. Xi has emphasized that the goal of the Silk Road Initiative is to combine the ancient friendships that had been fostered by the Silk Road with those of an increasingly globalized and contemporary world.

APEC Visit

Lee Hsien Loong’s meeting corresponded with his visit to Beijing for the annual APEC Summit, a convening of 21 Pacific Rim economies that seeks to promote free trade and economic cooperation. During the discussion that took place at Beijing’s Great Hall of the People, Lee Hsien Loong stressed the continued cooperation between Singapore and China, including through the construction of the “One Belt One Road” project,  a Singapore-China free trade zone, and China’s Western Development.

During an interview following the meeting, Lee Hsien Loong said: “"If we can deepen our cooperation with neighbouring countries, and in particular, strengthen trade and investment between China and its neighbours through the maritime Silk Road initiative, we hope a part of the services can be provided through Singapore's sea port and airport network."

As a small country, Singapore is dependent on opening its economy to the world. As a result, trade is particularly important and necessary for Singapore’s economic development. The revival of the ancient Silk Road will present new opportunities to Singapore as the region’s major transportation, logistics, and maritime epicenter.

The Asian “Marshall Plan”

While Singapore is looking at the Silk Road Economic Belt Initiative with optimism and future economic value, others, particularly in the West, have looked upon the “One Belt One Road” plan with much more hesitation.

Many Western analysts associate the “One Belt One Road” initiative with the U.S. Marshall Plan. They believe that China aims to use this initiative is to seek influence and eventual dominance in Asia. On the other hand, opposing sides believe that China’s initiative is too ambitious, challenging, and peaceful to be compared to the Marshall Plan of World War II.

Regardless of China’s motives and corresponding foreign interests, the Silk Road is back, and it seems like Singapore will be enjoying one profitable ride.