China's OBOR Project and Singapore

This assignment examines China's OBOR initiative and its potential impact on Singapore. It explores the economic benefits, risks, and security considerations associated with the project. The analysis draws upon various sources including academic journals, news articles, and reports from organizations like the Asian Trade Centre. The document highlights Singapore's role in the OBOR framework and discusses the country's strategic position within this ambitious global project.

Running head: ECONOMIC POLICY AND GLOBAL ENVIRONMENT
Economic Policy and Global Environment
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction......................................................................................................................................2
OBOR: Overview............................................................................................................................3
Case Study:......................................................................................................................................5
Expected Benefits and Opportunities from OBOR: Singapore...................................................5
Challenges to the economy: Singapore........................................................................................9
Government’s Role....................................................................................................................11
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
The economic scenario in the global framework has undergone considerable dynamics
over the years with some of the countries slowly emerging as the predominant and most
influential economies of the world. These global economies have progressed impressively over
the years in almost all the aspects and with huge commercial and industrial success are now
capable of influencing the activities and prospects of other countries across the world. China is
one such economy (Shambaugh 2013).
China has shown immense economic growth over the years and is currently one of the
countries with highest economic growth rate and industrial and commercial prospects. For
expanding their domain of economic expansion and long term economic progress and
commercial sustainability, China, in the recent years has proposed the implementation of a
highly ambitious project of connecting the country to the other countries in Asia, Africa and
Europe, with the objective of facilitating trade and commerce across the entire region (Lim
2015). Known as the One Belt One Road Project and with official announcement of
implementation in 2013, the routes under the OBOR Project are expected to connect 65 countries
across this region. This in turn is expected to have its influence on more than sixty percent of the
population in the world, which contributes more than 30% of the world GDP (Minghao 2015).
The OBOR Project, having its domain of operation over nearly all of the South East Asia,
is expected to have immense implications on the economy of Singapore, one of the most eminent
economically progressing countries in the South East Asian region. Being the third largest
economically growing country (In terms of global GDP) and characterized by the presence of a
highly industrial and least corrupt environment, the country has shown immensely impressive

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economic growth traits and is expected to emerge as one of the leading economies in the world
in the not so far future. In this context, with the implementation of the OBOR Project, the
economy of Singapore is expected to be considerably effected, the effects being both positive as
well as negative (Li, Bolton and Westphal 2016). The report, keeping this in consideration, tries
to analyze the potential opportunities as well as the challenges which the economy of Singapore
is expected to face with the implementation and operation of the ambitious OBOR Project by the
government of China.
OBOR: Overview
The main objective of the Chinese government, behind the implementation of the One
Belt One Road Project, is to connect the economy with all the growing economies across
different parts of Asia as well as Africa, thereby facilitating trade and industrial growth not only
in China but also the other 65 countries falling in this network. The proposed implementation of
the same has been the source of extensive planning regarding the future projects that will be
taken up by the concerned countries across the routes (Yunling 2015). The routes, being both
through roads as well as Maritime ones create a complex and hugely expansive network, which
can be shown as follows:

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Figure 1: The network of land and sea routes under the OBOR Project
(Source: Asiantradecentre.org, 2017)
As the above map suggests, in the newly proposed revamped Silk Route under the OBOR
Project of China, there is a complex and hugely integrating network of Road as well as New
Maritime Route which is spread across a huge arena. Several gas and oil pipelines are projected
to operate within this network, which is expected to make this network even more viable and
profitable commercially in a general framework. This is not just true hypothetically and has real
positive implications as can be seem from the rapid increase in the Gross Domestic Product of

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China itself, which with respect to the global share, increased to as high as 16% in the recent
periods from a significantly lower percentage (2.7%) only several decades’ back (Lo 2015).
This OBOR Project, when in full operation, is also expected to influence the economic
activities of Singapore massively, which is discussed in the following sections of the report.
Case Study:
Expected Benefits and Opportunities from OBOR: Singapore
Singapore, like the other South East Asian countries, has been gaining robust market and
economic dominance in the global scenario with time, much of which can be attributed to the
fast and efficient technological, industrial and commercial progress of the economy, catered by
its pro-commerce environment and highly developing industrial sector. The country, like many
other South East Economies fall in operational domain of the OBOR Project, which gives the
country to accrue huge benefits and economic opportunities and ling term prospects from the
project itself, designed by the government of China (Huang 2016).
One of the advantages of the economy of Singapore is that it is one of the most developed
economies in the entire South East region, not only in terms of economy but specifically in terms
of infrastructure, industrial expansion, commercial gateway and economically enthusiast and
able population, which together help the country to walk down the path of progress with ease and
in an impressive pace (Cheong 2017). However, apart from this primary plus point of the
economy, the country also has several other advantages and added inherent privileges which may

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be beneficial for the economy of Singapore itself, with respect of deriving the benefits from the
OBOR Project and its operations, some of which are discussed in the following section:
 The first and foremost advantage of the country, apart from its already highly developing
economy is the strategic geographical location. The country, being the heart of the South
East Economic Region, is located very near to the major Maritime Routes and is already
one of the busiest and highly commercially populated ports in the entire region. Keeping
this into consideration, it can be asserted that with the OBOR Project coming in full
operation, the country has robust chances to develop itself as one of the point or channel
of a massive share of all the trade and commerce taking place in this network of the
revamped Silk Route (Krishnan and Sriganesh 2017).
 For any economy to flourish and take advantage of any trade and commerce route, it is of
utmost importance for the economy to have a robust infrastructural framework and an
able technological system supporting the economic activities. This, especially in the
contemporary periods, has been significantly achieved by the concerned country.
Singapore, in the recent times, have not only developed its infrastructural and
technological bases efficiently but is an inspiration to the other parts of the world in this
aspect (TODAYonline, 2018). The country has the ability to take the pressure of highly
increased transactions of the goods and services, which is expected to happen with the
OBOR Project operating in its full capacity. The country thus has the chance of becoming
not only the most important port but also a business hub in its own capacity.
 The country already enjoys significant commercial relations with the Chinese economy,
which is actually implementing this ambitious project. There are already working
Chinese bases of operations in the economy of Singapore, through which the goods and

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services are exchanged not only between this two highly active manufacturing countries
but also with other neighboring countries. This is expected to give the country an added
advantage, given the OBOR comes into existence with full power.
 The population of Singapore is also another important factor, which may contribute
extensively to the capturing of the benefits from the concerned project. The country has
been efficiently building a strong and productive educational framework, building up a
highly skilled and productive population. With the implementation of the OBOR, many
jobs are expected to get created which can be helpful for the economy for the purpose of
increasing the overall level of employment as well as standard of living of the population
in the general in the country (Jinchen 2016).
 Singapore, in the last few decades, due to its robust infrastructural base and economic
resource mobility has been the centre of attraction of the investors across the world. The
inflow of foreign direct investment in this country has been consistently increasing with
the development of the industrial and commercial sectors of the economy. This shows the
chance of a significant increase in the inflow of the investments with the operations of the
One Belt One Road Project by the Chinese government as it will give even more
exposure to the economy of the concerned country, thereby contributing to the long term
sustainability and economy prosperity of the country (LIM 2016).
 The overall social, economic and political environment of Singapore is highly stable,
which makes the country highly attractive for the investors, businessmen and
entrepreneurs for expanding their domain of operation. This, with the implementation of
the OBOR Project is expected to increase the economic activities in the country
significantly, thereby positively contributing to the economy’s GDP in the coming years.

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As can be seen from the above discussion, there are considerable opportunities for the
economy of Singapore to reap the benefits of the OBOR Project. There are especially several
sectors in the country, which are expected to be highly benefited from the same:
Tourism- Singapore has over the years, received huge global attention due to its beautiful as
well as highly developed economy with infrastructural success. The country attracts huge
number of travelers, both domestic as well as international, who come for the purpose of
business as well as for pleasure seeking, thereby contributing to the growth of the tourism
industry in the country (Arduino 2016). In this context, with the implementation of the OBOR
Project and with the trade routes coming into operation fully, the tourism industry is expected to
get a huge boost, attracting even more travelers with time.
Logistics- The country, as discussed above, already enjoys the position of an eminent
commercial hub in the South East Asian region, due to its extremely strategic location. The
infrastructure and logistics in the country is already impressive with almost two hundred
shipping lines operating all across the world. The logistics industry of the country, with the
implementation of the concerned project is expected to reap huge benefits and economic
prosperity and sustainability in the long run (Arduino 2016).
Banking and the Financial Sector- With the investments flowing in from all corners of the
world, the economic activities of the country is expected to increase manifold with OBOR
coming into operation. This in turn gives the financial sector of the country the chance to play
the role of mediator to the foreigners venturing in the local economy and reap the economic
benefits in turn.

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From the above discussion, it can be highly asserted that there are immense scopes for the
economy of Singapore to reap the benefits from the implementation of the OBOR Project.
However, there are several feasible hurdles for the country and challenges the economy needs to
overcome before it can enjoy the advantages of the OBOR Project, which are discussed as
follows.
Challenges to the economy: Singapore
 With the implementation of OBOR, there are chances of development of several other
ports apart from that of Singapore itself, which now handles commercial traffic worth 5
trillion USD annually. These competing ports, primarily including those of the Klang port
and the Malaccan port, are expected to give tough competitions to the country. If these
ports come into action with their full capacities, then much of the commercial traffic is
expected to get diverted from Singapore (Das 2017). The ports are also getting Chinese
support to get developed to handle bulk cargo, which poses serious threats to the
economic prospects of Singapore.
 With huge economic and financial transactions, expected to occur under the operations of
the OBOR Project, exchange rate fluctuations can be a serious threat to the economy of
Singapore, which can be a byproduct of the industrial and commercial transactions.
(TODAYonline, 2018)
 Apart from the new ports, rail routes are expected to get revamped, which includes the
East Coast Rail Link:

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Figure 2: The Rail Link in East Coast
(Source: Asiantradecentre.org, 2017)
This can also divert significant commercial traffic and economy prosperity of the
economy of Singapore.
 With the operation of the OBOR Project, technological progress of other South East
Asian countries is inevitable, which can be a threat to the market dominance of the
economy of Singapore itself.

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Government’s Role
With the possible opportunities and threats from the OBOR Project, it is of utmost
importance for the governing authorities of the country to keep on striving for even more
technological and infrastructural progress, to strengthen its financial sector even more so as to
facilitate proper channeling of the investments in the country. The government of Singapore also
needs to emphasize on maintaining an overall pro-industrial, economic and progressive social
structure, with minimized fluctuations both economically as well as politically.
Conclusion
The OBOR Project, as has been proposed to get implemented by the Chinese
government, if implemented efficiently is expected to bring immense opportunities of prosperity
and commercial benefits for the economy of Singapore, in terms of long term sustainability and
industrial growth facilitated by the inflow of huge amount of investments from all the parts of the
world. However, there remains several serious challenges, which includes the competition which
Singapore is expected from its neighboring countries which are also expected to develop under
the domain of operations of the OBOR Project, which has to be overcome by the government of
Singapore. However, with the efficient planning and working of the government, as discussed
above, the country is expected to be hugely benefitted with the implementation of the OBOR
Project by the government of China (KONG 2016).

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References
Arduino, A., 2016. Security in One Belt One Road: Singapore’s Role in Training Expertise.
Asiantradecentre.org (2017). One Belt, One Road: Opportunities and Risks for Singapore (Part
1). [online] Asian Trade Centre. Available at: http://www.asiantradecentre.org/talkingtrade//one-
belt-one-road-opportunities-and-risks-for-singapore-part-1 [Accessed 28 Dec. 2017].
Cheong, I., 2017. Assessment of the Economic Background of the OBOR. Journal of
International Logistics and Trade, 15(2), pp.72-82.
Das, S.B., 2017. OBOR’s Digital Connectivity Offers Both Benefits and Risks.
Huang, Y., 2016. Understanding China's Belt & Road Initiative: Motivation, framework and
assessment. China Economic Review, 40, pp.314-321.
Jinchen, T., 2016. ‘One Belt and One Road’: Connecting China and the world. Global
Infrastructure Initiative website.
KONG, T.Y., 2016. China's 21st Century Maritime Silk Road: Malaysian Perspectives.
In China's One Belt One Road Initiative (pp. 289-306).
Krishnan, R. and Sriganesh, B., 2017. One Belt One Road–Opportunities and Risks for
Singapore.
Li, Y., Bolton, K. and Westphal, T., 2016. The effect of the New Silk Road railways on aggregate
trade volumes between China and Europe (No. 109/2016). Duisburger Arbeitspapiere
Ostasienwissenschaften.

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Lim, A.C.H., 2015. China’s “Belt and Road” and Southeast Asia: Challenges and
prospects. JATI-JOURNAL OF SOUTHEAST ASIAN STUDIES, 20, pp.3-15.
LIM, W.X., 2016. China's One Belt One Road Initiative: A Literature Review. In China's One
Belt One Road Initiative (pp. 113-131).
Lo, C., 2015. China's Silk Road strategy. The International Economy, 29(4), p.54.
Minghao, Z., 2015. China’s new Silk Road initiative. Istituto Affari Internazionali, Rome.
Shambaugh, D.L., 2013. China goes global: The partial power(Vol. 111). Oxford: Oxford
University Press.
TODAYonline (2018). One Belt, One Road project will benefit Singapore, but challenges could
arise: Analysts. [online] TODAYonline. Available at:
http://www.todayonline.com/singapore/one-belt-one-road-project-will-benefit-singapore-
challenges-could-arise-analysts [Accessed 3 Jan. 2018].
Yunling, Z., 2015. One Belt, One Road. Global Asia, 10(3), pp.8-12.