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5 things to know about China’s One Belt One Road Initiative

One Belt and One Road Initiative (OBOR) is a development strategy proposed by China’s paramount leader Xi Jinping that focuses on connectivity and cooperation between Eurasian countries. (Photo: BDO Singapore)

  1. What is it?

Announced in 2013 by President Xi Jinping, the “One Belt One Road” (OBOR) initiative is a vital foreign policy of China that is based on two main components – the land-based Silk Road Economic Belt and the 21st Century Maritime Silk Road.

BDO Singapore described the initiative as an attempt to enhance political and trade relations amongst China, Asia and Europe, while allowing China to boost its growth by exporting its technology, capital and capacity globally.

Under the OBOR implementing guideline released by China’s National Development and Reform Commission (NDRC), development plans along the trade route aim to improve connectivity in five areas – people, trade, currency, infrastructure and policy.

  1. How does it work?

The OBOR aims to improve trade and investment facilitation by removing investment and trade barriers; promote people-to-people relations via extensive academic and cultural exchanges, and enhance financial integration between countries by building a currency stability system as well as an investment and financing system.

It also aims to improve key transportation passageways for countries along the Belt and Road. Notably, these countries may form an infrastructure network that could bring together all sub-regions within Asia, Africa and Europe while taking into account their respective security and sovereignty concerns.

  1. The Asian Infrastructure Investment Bank and its role in the OBOR

To fulfil the One Belt One Road initiative, a large amount of capital injection is necessary, hence the need for the Asian Infrastructure Investment Bank (AIIB), said BDO Singapore.

AIIB is a multilateral development bank (MDB), in which about 60 countries have expressed “their willingness to participate in a variety of content along the way, including policy communication, unity of facilities, trade flow, financial inter-mediation and people connection”. It serves as a vital backing for Asia’s economic development by supporting developing nations achieve common growth.

  1. OBOR’s benefits to Singapore

As China’s top trading partner, Singapore is expected to benefit from the Belt and Road initiative. Channel News Asia reported that bilateral trade between Singapore and China amounted to $ 121.5 billion in 2014.

And given its excellent infrastructure and competence in the logistics industry, Chinese enterprises have raised their investment in Singapore’s infrastructure.

As the countries become more interconnected under the OBOR, the city-state also stands to benefit from the increased number of visitor arrivals. The initiative would also bring increased opportunities for professional services companies in Singapore, which is one of the world’s premier financial hub, to raise and distribute equity and debt capital.

  1. Possible challenges

The initiative, however, is not without challenges. The global expansion of companies may lead to a rise in the risk of disruption in a certain country. Credit risk, for instance, may be a concern as foreign customers operate on different credit and payment terms. The Diplomat noted that Chinese firms participating in insurance programmes would have then to ensure against such credit risks and counterparty defaults.

The increase in cross-border activities may also give rise to political uncertainty relating to trade embargoes as well as infrastructure impediment and corruption, particularly among developing countries.

The shifting of its overcapacity to other countries may also have their social implications. In 2015, the China Labor Bulletin reported that worker strikes in China significantly increased in 2014 from the previous year, due to the economic slowdown.

 

This article was edited by Keshia Faculin.

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Tiong Seng subsidiary backs out of Jervois Road site acquisition

Tiong Seng Holdings’s subsidiary, TSky (Jervois), has exercised its right to rescind the option to purchase two freehold sites in Jervois Road.

This comes as the necessary redevelopment approval for the sites has not been given by the relevant authority “due to restriction of redevelopment plans for the remaining left-behind plots”, explained Tiong Seng in an SGX filing.

Zoned “residential”, the sites are located in prime district 10, featuring a combined area of around 1,246.3 sq m (13,415 sq ft) and a gross plot ratio of 1.4.

In a July announcement, Tiong Seng revealed that TSky (Jervois) had exercised the option to purchase the sites for $ 21 million and would also undertake their development.

TSky (Jervois) is Tiong Seng’s 60:40 joint venture company with Arctic Sky Investment Pte Ltd, which is a wholly owned subsidiary of Ocean Sky International Limited.

Tiong Seng does not expect the termination to materially affect the group’s earnings per share and net tangible assets per share for the current financial year ending 31 December 2017.

 

This article was edited by Keshia Faculin.

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Widow sues grandson over Farrer Road family home

Claiming a 60 percent stake in the $ 4 million Farrer Road family home, 80-year-old widow Madam Lim Hoon Neo sued her 39-year-old grandson, Ang Wee Chai who had been named by her husband sole executor of the estate, reported The New Paper.

She was not mentioned in her husband’s will, in which the house was willed only to their eldest grandson and youngest son.

Madam Lim filed the suit after Ang Wee Chai has sought a court order to sell the two-storey terraced house and for his two uncles and grandmother to vacate the property.

He claims that he is merely fulfilling the wishes of his grandfather, who is the sole registered owner of the house.

Mr Ang Ho Sai, who died in 2014, and Madam Lim had five children, but one died in 1982.

They agreed to acquire the Farrer Road house in 1967 for $ 36,500.

According to Madam Lim, she contributed 60.3 percent or $ 22,000 to the purchase price.

Her lawyer, Tan Siah Yong, noted that the house was placed under the sole name of her husband since he was the one handling the transaction and the head of the family.

Based on her contribution, however, Madam Lim owns 60.3 percent of the house.

With this, Madam Lim wants the court to declare her right to live in the property until it is sold, after which she should be given 60.3 percent of the proceeds.

Ang Wee Chai, on the other hand, claims that the suit is just one of the attempt of his grandmother to thwart his efforts to administer the estate.

He revealed that Madam Lim and his two uncles had been blocking his efforts by refusing to cooperate with his attempts to dispose of the house in accordance with the will.

 

This article was edited by Keshia Faculin.

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11 Balmoral Road up for collective sale at $75 million

Built in the mid-1990s, the property comprises 17 units in two four-storey apartment blocks. (Photo: JLL)

Property consultancy JLL has launched 11 Balmoral Road in prime District 10 for collective sale at $ 75 million.

The asking price translates to a land rate of about $ 1,761 psf per plot ratio, inclusive of the development charge which is estimated to be around $ 10 million.

This is the development’s first collective sale attempt with 100 percent owners’ consent. As such, Strata Titles Board approval for the sale is not required.

Built in the mid-1990s, the property comprises 17 units in two four-storey apartment blocks. 

The 30,200 sq ft site is zoned residential with a gross plot ratio of 1.6 under the 2014 Master Plan. It could be redeveloped into a high-end condominium of up to 12 storeys.

Subject to design and approval from the Urban Redevelopment Authority, a developer may potentially configure the allowable gross floor area of 48,320 sq ft up to a maximum of 64 apartments.

The site is a short walk from Newton MRT interchange, which connects to Orchard Road and the Botanic Gardens. Nearby schools include Singapore Chinese Girls’ School and Anglo-Chinese School (Primary).

“11 Balmoral Road is a compelling offering of a freehold site with manageable quantum. It is expected to attract a wide pool of developers due to its affordability and a very prime location,” said Tan Hong Boon, regional director at JLL.

The tender exercise closes on 29 November.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

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Bukit Brown road unlikely to be ready this quarter

In order to ease traffic congestion, the LTA has awarded Swee Hong Limited the contract ER 382, Construction of New Road between Adam Flyover and MacRitchie Viaduct. (Photo: Swee Hong)

The $ 134.7 million road in Bukit Brown was originally targeted for completion in end-2017, but motorists and residents affected by the construction will have to wait a little longer for it to finish, reported the Straits Times.

In August 2013, the Land Transport Authority (LTA) awarded the contract to build the dual four-lane road connecting Adam Road with MacRitchie viaduct via the Bukit Brown cemetery to Singapore-listed contractor Swee Hong.

However, the civil engineering group encountered cashflow issues thereafter, and filed an application to the High Court to deliberate on a debt restructuring plan for its creditors in 2015.

While the company announced last July that it had repaid its loans, the financial problem had already caused delays in the project, and the grave exhumation took longer than expected.

As such, the road appears far from ready as of Monday (13 November), and a person living in the vicinity revealed that government officials said that the road will be finished by late-2018.

“I’m not even sure it can be done by then. It’s causing us a lot of inconvenience already,” said the retiree in his 70s who wanted to remain anonymous. He added that aside from the noise and dust of the construction, cracks had formed in some houses in the area.

 

This article was edited by Keshia Faculin.

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