New Mega-Agreements that Promote the Wrong - Myassignmenthelp.Com

Question: Discuss about the New Mega-Agreements that Promote the Wrong. Answer: Introduction The president of China, Xi Jinping, took the initiative of the One Belt One Road (OBOR) in 2013. This initiative was taken by the President when he visited to Kazakhstan and Indonesia in 2013 (Lim 2015). There, he announced about the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives. These two initiatives are known as OBOR. In China, this became an important foreign policy from different aspects. Moreover, this foreign policy helps China to promote economic cooperation with different countries along a road rout. Singapore has a very small boundary. However, the economic condition of this state is very advanced, compare to other countries of the Southeast Asia (Zhang and Xu 2017). The state has tried to adopt different strategic planning. This is because Singapore has understood that they can only survive if they can balance between West and China. The state has identified since the beginning of 1980s that the economy of China will grow significantly. They can understand that this belt, road initiatives (BRI) will bring positive impact n the economy of Singapore. This OBOR initiative has provided various opportunities for Singapore. As a result, Singapore warmly accepts this initiative. The state remains an early and strong supporter of OBOR, from the beginning. One belt One Route helps both countries to increase their international trade with each other. Chinas 30% BRIs are in Singapore. The state can play an important role in three chief areas for OBOR. These are financial connectivity, inf rastructural connectivity and third-party collaboration. The capabilities of Singapore companies to capture this opportunity: Different companies of China are expanding their business in Singapore. However, companies of Singapore can also give complement to those Chinese companies by giving proper market knowledge and track record. This helps both counties to explore various opportunities to collaborate mutually. Infrastructure In Southeast Asia, Singapore is a chief country with a great economical position to be an infrastructural hub. It has large group of companies, which are involved in different dimensions of infrastructural development. The state is also a leading business centre as it has large number of financial institutions and specialists. Those financial institutions and specialists are expert to undertake various projects of infrastructure to structure and finance. Hence, Singapore is well-known and well-placed state to continue a successful relation with BRI of China. Singapore also gets benefits from the OBOR initiative of China. As Singapore has an excellent infrastructure and capability in the logistic industry, it helps its neighbor countries to develop their logistic infrastructure and trading (Yu 2017). Moreover, the OBOR gives advantages to develop infrastructure in Singapore. To capture infrastructural opportunities of OBOR of China, International Enterprise Singapore has signed a memorandum of understanding (MOU) with Chinas local branch of Industrial and Commercial Bank (ICBC). According to this MOU, ICBC will provide financial services and structures of projects to support enterprises of Singapore. To implement these initiatives, ICBC establishes a Singapore team with the turnaround time. This expects to shorten the loans. Connectivity Singapore possesses a well-developed transport network. As the state has some advantage related to its geographical location, Singapore is one of the top transportation hubs in the world for air and sea cargo. Container ports of this country are one of the busiest ports in the world. Changi international Airport of Singapore is linked with around 330 cities of 80 countries. Companies can move fright and services by land, telecommunication and air linkages, all over the world. Currently, this republic has the most powerful network of free trade agreements in Asia. Moreover, Singapore supports OBOR to develop railways, ports and bridges to increase trade and connectivity with Asia and Europe. This economy is going to experience a great infrastructure and planning projects from China. Trade routes will be created as new roads and ports are built around Singapore (Yu 2017). According to the President of China, the Belt and Road initiatives is a difficult plan to connect China with Asia and Europe through land and sea. OBOR has taken initiative to develop ports of Singapore. Hence, with these initiatives, the country has developed its portal system to compete with other countries. However, as different countries are taking OBOR initiatives, there is a great chance to exist other ports. This will negatively affect Singapores ports. Hence, this will adversely affect the trade line of Singapore. Financial Services and trade Singapore is one of the best premier financial centers in the world. It has a strong network of financial institutions with best governance (Kelsey 2017). Moreover, this state is also the home country for a critical mass of international banks. Those international banks have capabilities to finance project. At present, financial transactions of 60% project of ASEAN are led by banks of Singapore. As the state is growing up as an international center of finance, Singapore is the second largest offshore of China, at present. It offshore Chinese Renminbi (RMB) centers of China. Singapore has the ideal position to trade mre RMB products and investment related flows. This OBOR initiative also helps to increase various opportunities for professional services companies in Singapore. Moreover, this initiative helps Singapore to increase and to distribute equity and debt capital to increase investment around the region. Fig 1: Economic Belt of Silk Route Source: (Peng et al. 2016) The possible challengers ahead facing by Singapore companies: The partnership of Singapore with China based on OBOR brings both challenges and opportunities. Competitive Singapore is aware about the opportunities and challenges that the country will face for OBOR. As OBOR builds new trade routes and with different countries, the number of strong competitors of Singapore is increasing. There are various countries that are looking to make a strong transshipment port, sea hub, air hub or financial hub for OBOR. This is because, OBOR promises to construct and develop roads, railways, industrial parks and ports with the trade routes (Johnson 2016). However, the country has self confident on its abilities to take those challenges. The country has already started to invest and expand their airlines and sea port. The capacity of those ports have made double for future. The country has also developed its position of digital hubs to compete with other countries. The republic has developed its science and technology policy. Due to lack of natural resources, this state strongly depends on the trade, education and technology. As political condition is good, it attracts various foreign companies to invest and work in Singapore. It helps this republic to build and develop knowledge hub. It develops strong technologies and sells those, all over the world. In this context, cutting-edge technology is important to discuss. This technology refers technological techniques and devices that employ high-level development. To make the manufacturing sector of Singapore competitive, the government of Singapore will invest in advanced production technologies. This will further encourage companies to develop. Politic risk Singapore is a well-regulated and well-developed country with a good legal system. The corruption level is also very low in this country. The competitive advantage of Singapore is chiefly depending on the Government of Singapore. Moreover, the government of this country is helpful to build international business in this country. Legal laws and political environment in Singapore attracts different foreign investors and multinational companies to expand their business. This stable political condition helps Singapore to develop its economic condition. Well-established macroeconomic policy is another important factor behind the economic success of this island. Its openness to global investment and trade and its efficient regulation encourage private sectors to become more competitive. Exchange rate risks As OBOR is operating trade between two countries, that is, China and Singapore, the exchange rate is very essential. As OBOR is initiating its business, different countries get chances to improve their business. However, exchange rate is an important factor in international trade that creates risk while trading with other countries. Hence, exchange rate is an important factor that can influence OBOR. Financing the projects Singapore can play an important role to help OBOR projects. The country provides various experts planning related to infrastructure. Different companies of Singapore make partnership with Chinese companies to invest in different parts of South-East Asia. However, Singapore is aware about the present competition as OBOR is making new infrastructure around Singapore. Corruption and poor governance Singapore captures the top rank in the world to compete with other countries. This republic has provided basic requirements infrastructure, macroeconomic factors, health and primary education and institutions. The corruption level is very low and the government of Singapore very efficient. Hence, this enhances the level of competition of Singapore. Impact of the maritime lanes Singapore has the leading maritime capital, worldwide. This includes terminal operates, shipping lines, marine insurance and banks, law firms and classification societies. The ship registry of this republic is one of the top 5 largest ship registries, all over the world. With a good business environment, efficient customs and stable government, Singapore is becoming competitive to trade with other countries. It is the maritime hub of Asia regarding law and arbitration. The governments support and assistance Governments and regulatory authorities have played an important role to help industries to evaluate investment opportunities. They also make the easy path for mutual co-operation with China and other economies related to OBOR route. To take the OBOR initiatives, the government of Singapore builds The Monetary Authority of Singapore (MAS) proposes regulatory rules for fintech solutions. This will observe products or services that provide its customers under a structured space. Monitoring financing condition This One Belt, One Road initiatives of China has helped Singapore by providing investment opportunities in infrastructure projects for their companies. According to the International Enterprise Singapore (IE Singapore), the latest MOU brings more than $90 billion to finance for OBOR projects. The financial and professional services of China are expecting to provide a great assistant to those enterprises of Singapore. Those institutions are expecting to earn huge activities and prospects form different companies by financing. In Singapore, the economy is facing a regulated and transparent legal framework. The economy is indicating huge potential of growth. This is expected to incorporate. Singapore is attractive for various multinational companies. Hence, the company is expecting to have more foreign investors in the upcoming years as more and more companies of Singapore is getting benefits from OBOR. Strengthening RMB business hub Under the China-Singapore Free Trade Agreement, these two countries are increasing their financial services. The Peoples Bank of China (PBC) has appointed Singapores ICBC branch as the Renminbi (RMB) clearing bank of Singapore in 2013. Singapore is the largest offshore hub for RMB to trade outside Hong Kong. Singapore and China have agreed to start new initiatives to strengthen cooperation to develop and regulate financial sector. Co-chaired by Singapore Deputy Prime Minister, this agreement has reached at the 10th Joint Council for Bilateral Cooperation. This agreement has coordinated by Minister for Home Affairs and Minister of National Security and Chinas Peoples Republic Vice Premier of the State Council. China will increase its Renminbi Qualified Foreign Institutional Investor Program with on aggregate of RMB 50 billion in Singapore. This will allow qualified investors of Singapore to channel offshore RMB from Singapore to securities market of China. Recommendation: Singapore is getting good advantage through the OBOR initiatives. The country has good infrastructural system and a good communication to promote their business. However, more improvement is needed to increase their business. This is important for Singapore as there are all other countries that are developing their international business through OBOR. Singapore is politically stable economy and this helps foreign investors to invest and build multinational companies. However, the overall political environment should be stable to expand the business in Singapore. As OBOR is operating in this country, Singapore is expecting to increase its commercial and economic activities in future. As OBOR is operating in Singapore, more technological progress is needed. Other countries are also getting benefits through OBOR. They are also technologically efficient. Hence, the basic challenge of Singapore is to remain constantly upgrade and innovate different technologies to get advantages. The country should develop its importance ports so that they can achieve its full capacity to trade with other countries. In north Singapore, the traffic related to trade is expected to pass through ports. However, the number is decreasing significantly compare to all other countries. This spreads a serious problem for that country for its commercial, economical and industrial aspects. It creates constraint to achieve prosperity of the country. Conclusion The One Belt One Route of China helps Singapore to develop its infrastructure and business opportunities. Therefore, the country is developing its transport system to increase its trade with China. Moreover, the country is facing various competitions from different countries as those countries are also growing up their business strategy along the OBOR. From the above discussion, it can be concluded that with the initiatives of OBOR, the country has great advantage to promote their business in future. OBOR helps Singapore to promote its business as the country has already has various innovative technologies, good communication system and a good location. Companies of Singapore have developed various expertises across infrastructure value chain. This includes master planning, engineering decision, operations and procurement. As Chinese companies are expanding their business all over the world, the companies of Singapore can provide complement by giving track record and marketing strategies. This will help both countries to explore various opportunities to benefit both countries mutually. Referencing Johnson, C.K., 2016. President Xi Jinpings Belt and RoadInitiative. Center for Strategic and International Studies, 2. Kelsey, J., 2017. The Risks for ASEAN of New Mega-Agreements that Promote the Wrong Model of e-Commerce. Lim, A.C.H., 2015. Chinas Belt and Road and Southeast Asia: Challenges and prospects. JATI-JOURNAL OF SOUTHEAST ASIAN STUDIES, 20, pp.3-15. Peng, J., Qiao, J., Leng, Y., Wang, F. and Xue, S., 2016. Distribution and mechanism of the ground fissures in Wei River Basin, the origin of the Silk Road. Environmental Earth Sciences, 75(8), p.718. Yu, H., 2017. Infrastructure connectivity and regional economic integration in East Asia: Progress and challenges. Journal of Infrastructure, Policy and Development, 1(1), pp.44-63. Zhang, L. and Xu, Z., 2017. How Do Cultural and Institutional Distance Affect Chinas OFDI towards the OBOR Countries?. Baltic Journal of European Studies, 7(1), pp.24-42.