An things initiative for one belt one road - Myassignmenthelp.Com

Question: Discuss about the An things initiative for one belt one road. Answer: Introduction: The initiative of One Belt One Road introduced by Chinese president in year 2013 consequently became a vital crucial foreign policy. This particular initiative was taken with the deliberation of promoting economic cooperation amongst countries along the Road and belt routes. Silk Road economic belt and 21st century maritime Silk Road are the two main components of One Belt One Road. It has been viewed as an attempt for enhancing trade and political relations amongst Europe, Asia and China. Moreover, it also intends to boost the growth of countries involved by exporting technology, capital and capacity at global level. Connectivity sought to be improved through this development plans along the trade route in five areas that is infrastructure, policy, trade, people and currency. One of the top trading partners of Singapore is China and Singapore being a trading and regional financial hub, it is expected that this road and belt initiative will benefit the country (Callens and Cherfi 201 5). Over the past three months after the announcement of this vision, a significant traction is gained by this raid and belt initiative. It is perceived that Singapore would be benefitted in various aspects through this initiative. Discussion: Singapore companies capabilities to capture opportunities arising from OBOR: Logistics and infrastructure industry: Singapore is one of the countries in Southeast Asian region that is most economically advanced and there is a likelihood that its position as world player will get enhanced as the imitative of implementing cost comes to fruition. Singapore is poised to receive benefits from this OBOR initiative as it is well positioned in the gateway of Strait of Malacca and in the heart of South East Asia. Neighboring countries would receive great assistance from Singapore as it is expected to play a significant role in helping to develop logistics and trade infrastructure. The reason is attributable to the fact that Singapore is a city state nation having competence and excellent infrastructure in logistics industry. Chinese government has increased their investment into infrastructure of Singapore because Chinese enterprises are significantly influenced by country. Some of the key industries of country are drawing Chinese enterprise attention and through various investment methods in Singapore, ma ny Chinese enterprises have already integrated with Singaporean firms (Chan et al. 2017). This integration will help in increasing productivity within nation that will boost overall supply and consequently improving production capacity. Increase in supply of products will helps in lowering of products price. It will ultimately help in increasing demand of products. Connectivity- Tourism industry of Singapore will be boosted as under this initiative, countries will become more connected. Number of people travelling either for leisure or for business will be greater in number due to enhanced connectivity. There will be greater use of applications of tourist visa between countries along Road and Belt (Cheong 2017). This expected increase in number of arrivals of tourists would gain Singapore. Security risk on One Belt One road: (Source: Iesingapore.gov.sg 2017) The above chart depicts overall risks of different countries with Singapore receiving a moderate overall risk score of 49. This is indicative of the fact that there is lower macroeconomic risk and higher risk relating to effectiveness of government. Direct overseas investment between China and Singapore (Source: Iesingapore.gov.sg 2017) Financial services and trade- Singapore has a string network of financial institutions with excellent governance as it is regarded as one of the premier financial centre. The opportunities for professional service firms in country can be increased that will help in facilitating investment by distributing and raising debt and equity. The largest offshore hub for trading of RMB outside Hong Kong is Singapore. Singaporean firms engaged in financial and banking services, private equity, investment management and funds will be provided significant opportunities under the initiative. This would assist both foreign based and Singaporean firms as they will look forward toward participating in project development and financing around the region (Krishnan and Sriganesh 2017). Possible challenges faced by Singapore companies: Competitive edge technology- Singapore faces both global and regional competition from many countries that are involved in or that are part of OBOR initiative as they intend to take position similar to country. Many countries are provided with opportunity to participate in OBOR and this might pose risk to Singapore, as they would come with advanced technology. Entering of foreign companies into profitable relationship with their Chinese counterparts and it has been perceived that such collaboration is critical that would certainly affect Singapore (Mostarom 2014). Political risk- There are some political risks associated with the initiative in terms of major differences in legal regimes and common law in Singapore. Foreign companies intending to operate in country might not be provided with adequate legal protection and underdeveloped legal regimes might lead to low credibility and wide spreading the jurisdiction and social life. Bilateral relations among nations can be worsening due to heavy reliance on Chinese companies on local Chinese embassy and Singaporean government (Tsui et al. 2017). Singapore has been less proactive regarding in working with China due to this particular initiative Poor governance and corruption- The visualization of OBOR initiative for using Yuan as an international currency for business transactions in central Asian region will lead to higher hedging cost for transactions in their own currency. Impact of maritime lanes- It is unlikely that the face of modern shipping will change due to creation of modern Silk Road and this will have an impact on position of Singapore as a key hub port. It is argued that port of Singapore could receive significant threat from development of port in Hambantota. The bypassing of ships in Singapore altogether can be hampered by change in trading routes. This is so because across the Indian Ocean, port in Hambantota will be an excellent transshipment waypoint that will be stretching to Europe and Far East. Movement of goods into hinterland could also be expedited by Kra canal construction (Xu et al. 2016). In this regard, it is required by Singapore to overcome these thorny issues. Exchange rate risk- Singapore has been a macro stable economy with few exposures to exchange rate risks. Enhancement of financial integration between countries is one of the vital parts of OBOR implementation. Transactions between countries involved under this initiative would pose Singapore to risk of currency, although it is a macro stable economy. In this regard, it is required to build of currency stability, financial and investment system (Winter 2016). Economic policy of government to overcome OBOR challenge: Singapore will be provided with significant opportunities due to One Belt One road initiative; however, the large-scale projects could surface many challenges. The long-term challenge arising from this initiative requires formation of good leadership and policies (Xu et al. 2016). Raising the productivity is an immediate challenge facing Republic for enabling to grow an already advanced economy. Strengthening national identify is one of the fundamental challenge facing country. Singapore is required to set the policy direction that is in favor of suiting the environment created by initiative. For ensuring long pipeline of talent in Singaporean industry, infrastructure development internship and leading o generation of top talent pool in country (Gan 2016). There are challenges faced from external influence such as big powers and Islamic states that has the possibility of creating rupture in multi religious and multi ethnic society. Singapore is considered vulnerable to the terrorism threat is certain due to rise of ISIS. In this regard, it is required by government to respond appropriately to enhance their security system so that they are able to foil terrorist plots and weed out potential radicals. The signing of agreement by Singapore government with UN peacekeeping department to provide users with operational information helps in bringing peacekeeping (Mostarom 2014). The three platforms of collaboration that is financial connectivity, infrastructural connectivity and third party collaboration such as joint training from BRI countries official has been reaffirmed under One Belt One initiative. Singapore government included this particular initiative of getting itself involved in ruling party constitution of China. Financial connectivity enhancement by Singaporean government working closely with Singapore and Chinese banks for syndicating finance to belt and road projects (Mostarom 2014). Agreements were signed by major Chinese banks by International enterprise Singapore that helps in providing billion of trade finance to companies of both the nations in Road and belt projects. Therefore, Singaporean government has taken several efforts to overcome the challenges faced in light of OBOR. Recommendations to Singapore government: Monitoring financial condition- It is required by Singapore government to strengthen the nation as an international center for restructuring of debts being a major financial, legal and business hub. There should be increase in availability of rescue financing for business doing operations in country. This will allow business debtors to continue their business operations. Some of the complex crosses border-restructuring work should be handled by deepening expertise. Profile of Singapore on international stage should be raised through increasing involvement of financial institution involvement in international organizations and conducting research on cutting edge (Krishnan and Sriganesh 2017). It is required by Singapore companies to keep a close tap on foreign affairs announcements and domestic affairs in China. Signs of certainty or assurance would be sending by rationale behind change of willingness of China to overcome the challenges brought by such initiative. Seizing opportunities by finding Chinese partners- A common ground should be created by Singaporean companies with Chinese companies. This calls for strategy formulation for becoming complementary partners such as strength in human resource development, financial and experience in navigation of international market. Highlighting the nation strength of being located in the heart of trading routes should be done by Singapore. This would help in enhancement of construction, engineering and pool of international talent. For effectively finding market gaps and the industry to participate in One Belt and One Road, it is required by Singapore companies to consider their complementarities and value added to Chinese companies (Yan 2015). Singapore companies will be assisted in gaining foothold and increasing collaboration with Chinese companies by developing strong string business capabilities and networks. Professional support centre- Development of professional support center would be of utmost importance for countries operating within this initiative. Experts and professionals working in different companies should be trained for handing advanced system of technology. There has been development of industry standards in China for supporting growth and new industries. Several cross border commercial financial services platforms such as Alipay system, union pay system and Beidou global navigation system (Da Xu 2016). It is essential for Singapore to adapt them by integrating to these standards and they should have an open mind set for this. Affordable loan financing- One of the positive developments would be the willingness of Sinosure and EXIM bank of China for shouldering greater commercial risks. Singapore companies should closely monitor some geopolitical development relating to regional infrastructure projects. Established connections of IE Singapore with multilateral Chinese financial institutions would help in providing funding support to Road and belt projects (Jinping and Wei 2016). It would help in bridging the gap by enabling access of Singapore companies to funding. Conclusion: Analysis of One Belt One Route initiated by China would give rise to new opportunities for Singapore companies. However, this would give rise to several risks and competitive challenges that should be overcome by Singaporean government, companies involved in Belt and Road Initiative projects and financial institutions. Notwithstanding, it is required by Singapore companies to carefully consider their response. International enterprise Singapore has the possibilities on continuing to tap on extensive business networks and global government and working closely in collaboration with companies of both the nations. Furthermore, Singapore government will be able to enjoy greater access to funding by harnessing credibility of brand for delivering good value to projects having Chinese elements. Singapore companies can grow its businesses capability by setting up joint venture with their Chinese companies (Winter 2016). Singapore government adopted Chinas initiative of Belt and Route early. C ollaboration of Singapore companies with that of their Chinese counterpart will help in encouraging economic integration, people-to-people link between countries and infrastructural cooperation. Therefore, from the analysis, it can be inferred that BRI would bring opportunities as well as challenge for Singapore. References list: Callens, S. and Cherfi, S., 2015. THE INTENSIVE EXCHANGES FLOWS. About a New Regionalism: OBOR (One Belt, One Road). In Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE (Vol. 9, No. 1, pp. 496-505). Faculty of Management, Academy of Economic Studies, Bucharest, Romania Chan, M.H., Lau, Y.Y.J., Chu, W.C. and Ho, C.K.D., 2017. How can Hong Kong help to develop the professional supply chain service of textiles and clothing industries under the" One belt one road" initiative?. Cheong, I., 2017. Assessment of the Economic Background of the OBOR. Journal of International Logistics and Trade, 15(2), pp.72-82. Da Xu, L., 2016. An internet-of-things initiative for one belt one road (OBOR). Frontiers of Engineering Management, 3(3), pp.206-223. Gan, S.H., 2016. Contending the Global Order: Singapore's Response to China's One Belt, One Road (OBOR) Initiative. He, H., 2015. " One Belt One Road Strategy": From a Perspective of Public Goods. World Economics and Politics, 6, p.009. Iesingapore.gov.sg. (2017).Cite a Website - Cite This For Me. [online] Available at: https://www.iesingapore.gov.sg/-/media/IE-Singapore/Files/Publications/IE-Insights/Vol31_China_FA_2.ashx [Accessed 26 Dec. 2017]. Jinping, Y. and Wei, G., 2016. The Benefits, Risks, and Strategies of One Belt and One Road Initiative. Nankai Journal (Philosophy, Literature and Social Science Edition), 1, p.004. Krishnan, R. and Sriganesh, B., 2017. One Belt One RoadOpportunities and Risks for Singapore. Li, Y., 2015. Environmental Sustainability Assessment for Countries Involved in OBOR Initiatives Based on Planetary Boundary Theory. 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