Featured Photo: The Sino-Singapore Dialogue speakers. From left: My Douglas Foo (moderator), Chairman, Sakae Holdings, Dr Zhong Feiteng (钟飞腾) (panelist), Director of Great Power Relations Institute at Chinese Academy of Social Sciences, Mr Ho Chee Hin (panelist), CEO, Business China, Mr Chen Xiang (陈翔) (panelist), Deputy General Manager, Bank of China (Singapore Branch) and Dr Pham Sy Thanh (panelist), Director, Mekong-China Strategic Studies Program.
BRI 2.0: Reboot, Re-Ernergise and Re-Strategise
(6 April 2023)
The 13th Stratagem Group-Nanyang Technological University (NTU) Sino-Singapore Dialogue was held on 6 April 2023, in conjunction with the Lien Fellows Reunion Dinner. The Sino-Singapore Dialogue was themed “BRI 2.0: Reboot, Re-energise and Re-strategise” and involved international speakers from China, Vietnam and Singapore. About 150 guests attended the dialogue at Shangri La Tower Ballroom.
Background
Mr Douglas Foo, Chairman of Sakae Holdings, moderated the dialogue and provided the background and context for the dialogue. This year marks the 10th anniversary of the Belt and Road Initiative (BRI) since it was proposed by President Xi Jinping in September 2013. As of 2022, some 150 countries and 32 international organisations had signed onto the BRI. Although progress of some BRI projects had been interrupted by COVID-19, there has been significant increase of investments in BRI projects after the world exited from the pandemic. It is now an appropriate time to pause and reflect on: (1) the unique propositions of BRI; (2) achievements, challenges and lessons learnt from BRI projects undertaken in the past ten years; (3) how could BRI adjust, modify and improve its narrative, branding, financing mechanism, project selection and project management to take into account the changing circumstances, arising from developments in technologies and global economic system; and (4) going forward, how could BRI projects balance host country’s need for economic developments with sustainability in project financing, environment, social development and governance.
Taking Stock of the Belt and Road Initiative Over the Past Ten Years
Dr Zhong Feiteng, Director of Great Power Relations Institute at Chinese Academy of Social Sciences, said that BRI had demonstrated China’s willingness to work with other smaller countries to achieve economic development. China’s model of investing in infrastructure developments and manufacturing capacity building had helped BRI countries narrow their development gaps in productivity, technology transfer, job creation and regional economic integration. Despite the benefits brought about by BRI projects, Dr Zhong pointed out that there were also externality costs to local communities, such as increased competition pressure on local businesses, environment pollution and social dislocation etc. Dr Zhong shared that there was presently limited data collection on these externality costs; and going forward, comprehensive project feasibility studies that take into consideration potential externality costs would be necessary to allow for a more scientific way of evaluating and planning for BRI projects.
Mr Ho Chee Hin, CEO of Business China, said that China had good noble intentions as BRI was about developing much-needed infrastructure in South East Asia and Central Asia region, as well as to promote greater trade and development. Mr Ho highlighted that BRI was not just an initiative for infrastructure projects, but also an advocacy for BRI countries to internationalise their local businesses to new overseas markets. Mr Ho cited the New International Land-Sea Trade Corridor, established under the China-Singapore (Chongqing) Demonstrative Initiative on Strategic Connectivity (CCI), and the China-Laos high-speed rail as examples of how BRI helps to facilitate transnational market access. Mr Ho however pointed out that in recent years, there had been increased concerns on the environmental implications of BRI projects. These concerns stemmed from broader challenges of reconciling economic development aspirations with environmental sustainability goals. China together with BRI partner countries could make a more concerted effort to ensure that BRI projects meet international green standards.
Dr Pham Sy Thanh, Director of Mekong-China Strategic Studies Program, shared that BRI had helped developing countries like Vietnam to build up required infrastructure. Without BRI, Vietnam and other developing countries would have difficulty in financing and managing such large-scale infrastructure projects by themselves. Dr Thanh however shared that local governments had often faced difficulties working with Chinese enterprises on BRI projects, mainly due to different management styles and cultures. These difficulties could be attributed to Chinese enterprises’ lack of overseas business management experiences as well as lack of familiarity with BRI partner countries’ laws and legislation.
Mr Chen Xiang, Deputy General Manager, Bank of China (Singapore), highlighted that inclusivity was one of BRI’s key success factors. Over the past ten years, BRI developments had brought about three key benefits for BRI partner countries: first, supplier diversity within the region; second, business opportunities for local SMEs; and third, convenience of connectivity with overseas markets. Mr Chen pointed that there were however cases of BRI project insolvency, which led to accusations of “debt traps” created by China-sponsored BRI projects. Mr Chen said that this issue had to be looked at objectively. On the one hand, financial loans were essential for developing countries to embark on large-scale infrastructure development, and if well-managed, this could lay the foundation for economic development. On the other hand, if the borrowed funds were poorly managed due to systemic corruption and inefficiency, countries could pile up unsustainable debts. Mr Chen said that going forward, China and BRI partner countries would need to improve on BRI project financing mechanism.
BRI 2.0, the Next Ten Years
Dr Zhong Feiteng emphasised the need for BRI 2.0 to adopt a more localised approach to project evaluation and management, taking into consideration the unique circumstances and requirements of each BRI partner country and local community. Dr Zhong suggested that BRI partner countries can leverage on big data to evaluate and monitor projects, as well as to benchmark BRI projects against global standards. In addition, having a better understanding of local governance systems will help mitigate potential challenges and misunderstandings ahead of project implementation.
Mr Chen Xiang said that while retaining its essence of being an initiative to facilitate regional trade and integration through concerted infrastructure development efforts, BRI 2.0 should revive and give new meanings to the original narration of the five areas of connectivity (五通): policy connectivity (政策沟通), trade connectivity (贸易畅通), infrastructure connectivity (设施联通), financial connectivity (资金融通) and people-to-people connectivity (民心相通).
Dr Pham Sy Thanh said that an area of improvement for BRI 2.0 is to establish a project management framework that can reduce miscommunications and misunderstandings among BRI partner countries. Enterprises undertaking BRI projects need to develop better understanding and appreciation of local social and political cultures. Dr Thanh added that in light of the ongoing Sino-US strategic competition, it is important that BRI 2.0 be managed as provision of common goods and where possible, to seek synergy with the US’ Indo-Pacific Strategy and G7’s Build Back Better World (B3W) initiatives.
Mr Ho Chee Hin said that Singapore’s reputation as regional financial and trading hubs means that Singapore can contribute to BRI 2.0 in the areas of finance, legal and advisory services. Many international banks, law firms and MNCs have set up their regional headquarters in Singapore, making Singapore an ideal springboard for BRI projects around the region. Singapore can also be a place to host BRI’s control-tower and disputes mediation functions.
At the dialogue, the moderator and panelists concluded that BRI 2.0 should entail enhancing policy coordination with all relevant stakeholders, increasing multilateralism and focusing on sustainability. BRI 2.0 needs to adopt multilateral rules and international best practices pertaining to project development, operation, procurement, as well as tendering and bidding; and these together with appropriate technology transfer and capacity building would allow BRI partner countries derive maximum values from BRI projects. BRI 2.0 is also expected to be more sustainable in terms of environment and financing, and to play a critical role in green transformation.