Amidst the dire state of Sino-US relations, Singapore’s overseas expansion can soothe tensions between the two superpowers. A hint of this possibility lies in Singapore Foreign Minister Vivian Balakrishnan’s recent visit to the port of Sines in Portugal.
The US government of President Joseph Biden and the previous US administration of President Donald Trump view China as a competitor, especially with the Belt and Road Initiative, Chinese President Xi Jinping’s mega-project to connect China with other countries through infrastructure projects like ports and roads.
Senior officials of the Trump administration like former State Secretary Michael Pompeo have denounced the Belt and Road. In late June, US President Biden announced a US$600 billion global infrastructure plan to counter the Belt and Road, the value of whose projects are estimated to total trillions of US dollars. This shows Washington’s competitive attitude towards China’s economic rise on the world stage.
However, there is one country whose overseas economic expansion will not rile the US. That is Singapore, which can be argued to be creating its mini version of Belt and Road through its infrastructure projects abroad, including a container terminal in Sines.
Firstly, the scale of the city state’s overseas projects is small compared to the gargantuan scale of the Belt and Road. Secondly, Singapore and the US have strong economic and military ties, so the US should have no problem with the international expansion of such a friendly country.
PSA in Sines
In 1999, the Port of Singapore Authority (PSA) gained a 30-year concession to build and operate a container terminal in the port of Sines with the Administration of the Port of Sines.
On July 1, PSA Sines inaugurated a new stage of the expansion at the Sines Container Terminal, said a PSA press release on the same day. The inauguration event was graced by the Portuguese Secretary of State of Infrastructure, Hugo Santos Mendes, the Singaporean Minister for Foreign Affairs, Vivian Balakrishnan, President of the Sines Port Authority, José Luís Cacho, the Mayor of Sines, Nuno Mascarenhas, PSA management, customers, partners and stakeholders, PSA added.
PSA Sines has embarked on an expansion project worth over EUR 300 million (S$433 million), said the PSA press release. When the expansion is completed by 2028, the terminal will have doubled its annual handling capacity to 4.1 million TEUs (Twenty-foot Equivalent Units), herewith strengthening its position as one of the main ports in the region, PSA added.
On his Facebook page on July 2, Balakrishnan wrote, “PSA Sines is a significant port on international maritime routes. It is strategically positioned to be a key transhipment hub for Europe, connecting to Asia via Singapore. This partnership will create new opportunities for Singapore and Portugal as maritime states that depend on trade for our prosperity. My congratulations to PSA for its success in establishing a worldwide network of ports and flying the Singapore flag high!”
If the Chinese flag flew high over a worldwide network of ports, Washington would freak out, but not in Singapore’s case.
The Portuguese explorer Vasco da Gama was born near Sines, Balakrishnan wrote on his Facebook page. “In 1498, he changed history when he discovered a new trade route between Europe and Asia. This heralded the arrival of the Portuguese people to Southeast Asia and beyond.”
Vasco da Gama paved the way for the Portuguese to conquer Malacca and colonize Macau. Thanks to da Gama blazing a trail from Europe to Asia, other European empires followed in his wake, with Britain adding India, Myanmar, Malaysia, and Singapore to its empire, Holland conquering Indonesia and Indochina incorporated into the French empire.
By no stretch of the imagination can Washington think Singapore harbours ambitions of creating an empire through PSA’s container terminal in Sines. If Washington does not fear PSA’s worldwide network of ports, why should it regard Belt and Road as a threat? In this way, Singapore’s overseas expansion can allay US fears of Chinese overseas expansion.
It can be argued that the international business of Singapore is tiny compared to the enormous scale of Chinese overseas projects. Moreover, the US government accuses China of ambitions in the South China Sea, suppressing liberties in Hong Kong and threatening Taiwan, while Singapore faces no such accusations. Thus, the US will look benignly on Singapore’s overseas expansion but not China’s, so the argument goes.
In that case, overseas Singaporean projects like PSA Sines can bring on board companies from China as well as European countries, Japan and other nations. As Chinese companies partner with firms from Singapore and other countries in international projects, the US will feel less threatened by such projects.
China and US tussle over Portugal
In visiting Sines, Balakrishnan did not just alight on a strategic hub connecting Asia with Europe, but also an intersection of rivalry between the US and China.
As tensions between the US and China degenerated into a full-fledged commercial war, Washington began to grow more critical of Lisbon’s close ties with China, wrote Loro Horta, a Timor-Leste diplomat on 22 July 2021 in an article of ThinkChina.
“Matters came to a head when in 2020 Portugal accepted a Chinese proposal to modernise and expand the port of Sines, the country’s most important harbour. Under the Belt and Road Initiative (BRI) China proposed a 640 million euro container terminal at Sines to transform it into a major shipping hub between Europe and the Americas. Unfortunately for small Portugal, the Chinese proposal angered the Americans,” said the article of ThinkChina, an e-magazine powered by Lianhe Zaobao, the main Chinese-language newspaper in Singapore.
“In no uncertain terms, the US ambassador to Portugal George Glass told the Portuguese government that Lisbon needed to rethink its relations with Beijing,” the ThinkChina article added.
The Portuguese authorities pushed back at Glass’ comments and denounced American meddling in Portugal’s internal affairs, Horta wrote. “Lisbon stated that it remained a firm ally of the US and that its ties with China are based on economic interests.”
Partly like Singapore, Portugal is an ally of the US through NATO yet has growing economic ties with China.
“However, Washington has made clear that Lisbon must choose. The new Biden administration, while having a more polite posture, is unlikely to change this stance,” Horta predicted.
Through PSA’s presence in Sines, Singapore sits at a crossroads of Sino-US tensions. But the Singapore government can use this to mediate relations between the two superpowers, like what happened on its home ground. At the Shangri-La Dialogue in Singapore on June 10, US Defense Secretary J. Lloyd Austin met Chinese Defence Minister Wei Fenghe to prevent tensions between their countries from getting out of hand. Likewise, Singapore’s presence in Sines can be a point of mediation between China and USA.
Singapore has shown that building infrastructure projects abroad need not frighten other countries. It is unrealistic to think US perceptions of China as a danger will disappear anytime soon, but Singapore can help reduce fears of Chinese global expansion.
Toh Han Shih is chief analyst of Headland Intelligence, a Hong Kong risk consultancy. The opinions expressed in this column are his own.