On Sunday, April 8, Singapore and China signed a Memorandum of Understanding (MOU) in Beijing to deepen their partnership on the Belt and Road Initiative. This initiative further strengthens Singapore’s participation in the infrastructure projects developed by Chinese companies.
This is in stark contrast to the strained Singapore-Sino relationships when Terrex were detained in Hong Kong and Singapore opposed to the Chinese territorial claims in South China Sea two years ago.
Time heals all wounds
Based on the MOU, a governmental working group will be formed for the purpose of deeper collaboration from firms from Singapore and China for Belt and Road Initiative projects in other countries. The governments also plan on working together with financial institutions in both countries for aid with funding and consultation.
On China’s side, National Development and Reform Commission vice chairman Zhang Yong was the signatory for the MOU, while National Development Minister Lawrence Wong signed the memorandum for Singapore. The signing in Beijing was attended by the Premier of China, Li Keqiang, and the Prime Minister of Singapore, Lee Hsien Loong.
Lim Hng Kang, the trade minister of Singapore, said that the MOU, “will pave the way for closer partnerships between our companies in third-party markets, one of the key cooperation pillars that Singapore and China have identified under the Belt and Road Initiative. Singapore’s strength as a key infrastructure, financial and legal hub in the region will add value to Chinese companies expanding along the Belt and Road.”
Partnering with China on the Belt and Road Initiative is a strategic move on Singapore’s part, since this would be instrumental to economic growth and will help the city-state maintain its status as a trade hub in Asia, as well as to continue to woo foreign companies to its shores.
It has taken some time for Singapore to partner with China. Last May, when China held the first international conference concerning the Belt and Road Initiative, Prime Minster Lee was absent. However, in September Mr. Lee visited Beijing and had a meeting with Xi Jinping, China’s President. By October, Heng Swee Keat, the Finance Minister of Singapore and widely perceived successor of Mr. Lee as Singapore’s prime minister, also paid a visit to Beijing, and further cemented the ties between the two countries.
Balancing Act
With its newfound closeness to China, Singapore must be careful not to strain relations with the United States. Since China has been building man-made islands in the South China Seas, Singapore, which looks to the US for protection, must stay within Washington’s good graces.