More funds will be made available to support Singapore and Chinese companies in One Belt, One Road (OBOR) infrastructure projects, with a Memorandum of Understanding (MOU) signed between International Enterprise (IE) Singapore and China Construction Bank (CCB) on Monday yesterday.
The OBOR connects China with Europe, Africa and Asia economically, socially and culturally through the continental Silk Road Economic Belt and the 21st Century Maritime Silk Road.
Under the MOU, which is the first CCB has signed with a Southeast Asian country, CCB will provide S$30bn of financing services to support local and Chinese companies to invest in OBOR projects in Singapore. Singapore companies will also be able to tap the bank's network in 25 countries and regions.
CCB has 176 major projects in OBOR countries, with an aggregate investment size of more than US$300bn (S$405bn) covering sectors such as power generation, mining and transportation.
IE Singapore's CEO Lee Ark Boon said that as the regional infrastructure hub, Singapore's know-how and networks with China and Southeast Asia give Singapore-based companies an advantage in OBOR projects.
He added that the partnership with CCB was "strategic, strengthening the critical financing element and bringing more projects to fruition."
"Tremendous potential" to direct Chinese investments into the region: Chan Chun Sing
Speaking at the "One Belt, One Road" Infrastructure and Capital Market Financial Services Forum, Minster in Prime Minister’s Office Chan Chun Sing noted that outward investments from China are overtaking foreign direct investments into China.
With much infrastructure required in Southeast Asia, Mr. Chan said there is "tremendous potential" to direct part of the outward direct investment into the region.
He added that Singapore's deep and in-depth market knowledge of Southeast Asia, and ability to work long term with the certainty the rule of law provides and provide a range of ancillary services such as professional and legal services will help the Republic work with China in investing in infrastructure projects in Southeast Asia.
CCB is exploring the idea of setting up a centre in Singapore to provide project financing and related professional services required for OBOR basic infrastructure investments.
It has also signed an MOU with the Singapore Exchange (SGX) to develop the capital market in Singapore. Under this agreement, the bank will work with SGX to encourage more Chinese companies to list on the SGX, especially through SGX's Direct Listing Framework.
The local bourse operator will work with the bank to highlight opportunities for Chinese companies to issue offshore RMB bonds, or Lion City Bonds, undertake merger and acquisitions and other capital market activities in Singapore.There are currently 120 Chinese companies and 103 RMB bonds listed on SGX.
(Source: Channel News Asia)