Financing the Belt and Road Initiative: Can Singapore Help in Securitizing It?

Abstract

China’s ambitious Belt and Road Initiative (BRI) is perhaps the modern equivalent of the Marshall Plan and will hopefully provide the aggregate demand lost due to the global financial crisis. At the moment, much of the financing has come from the government and financial institutions. If more private sector financing is needed for the BRI, this could involve, perhaps, having established ways of project finance that we have seen with the large infrastructural projects of the past as well as modern methods of asset securitization. Lawyers and financiers would be needed, and the West has traditionally held a comparative advantage in these entities, whereas China’s advantage is in building and making things. Singapore, perhaps, is now well placed to offer its services in a way that brings the East and the West together and that would hopefully provide a balanced approach that distributes benefits to all involved in the BRI. Its experiences are far from perfect, but it has learned painful lessons to position itself as a financial centre supporting the real economy that can now hopefully begin to rival New York, London, and Hong Kong. The areas examined in this article include Singapore’s development of property and infrastructural trusts, its bond and derivatives markets, its restructuring regime, and its legal expertise in project finance.