China belt-road to impact on Singapore

China’s investments in ports and rail links in Malaysia under its belt-road regional economic expansion programme is likely to change the outlook for the island republic. The current mega belt-road projects in Malaysia, once completed, could alter trade routes in the region and this may see hundreds of billions worth of trade diverted from Singapore. Cargoes and goods within the region heading for China or vice versa could divert around the Port of Singapore, when China-funded ports and East Coast Rail Line (ECRL) in Peninsular Malaysia are completed. The double-track five-year ECRL project, due to begin this year, will connect ports on the east and west coasts of Peninsular Malaysia and will alter current regional trade routes, which ply between the busy Straits of Malacca and the South China Sea via Singapore. Presently, Singapore is in a strategic position along the east-west route. About 80% of the world’s maritime trade between east and west passes through the Straits of Malacca and the strait is the main shipping channel between the Indian Ocean and the Pacific Ocean linking major Asian economies such as India, China, Japan and South Korea.