BEIJING – Singapore is offering up its financial industry to help bankroll China's ambition to develop a network of ports, railways, power plants and other projects across a broad swath of Asia, Europe and east Africa.
By partnering on financial matters, Singapore appears to be looking to smooth recently strained ties with China and profit from the Asian giant's rising global aspirations.
Experts say it faces stiff competition from other financial centers including Hong Kong and London, which also hope to play key roles in China's bid to integrate economies along the path of the historic Silk Road.
"Singapore has been a believer in China's rise," Singapore Foreign Affairs Minister Vivian Balakrishnan said after meeting with Chinese officials in Beijing on Monday. "This is a wonderful opportunity to restore, in a sense, these ancient trade links."
The small but economically powerful island nation also will work with China to advance a pending trade deal among the 10-nation Association of Southeast Asian Nations, China, India, Japan and others, Balakrishan said.
That deal has taken on enhanced significance since President Donald Trump withdrew the United States from another regional trade agreement, the Trans-Pacific Partnership, which included Singapore but not China or India. The U.S. is not part of the proposed new agreement, the Regional Comprehensive Economic Partnership.
Longstanding relations between China and Singapore were tested in recent months by Singapore's support for an international court ruling against China's territorial claims to most of the South China Sea.
Adding to the pressure, China in November seized a shipment of armored vehicles from Singapore that had taken part in military exercises in Taiwan, which China views as a break-away province. The nine armored vehicles were released in late January.
Chinese Foreign Minister Wang Yi made only a passing mention of those tensions during a joint media event Monday with Balakrishnan. When asked by a reporter about the situation in the South China Sea, Wang remarked that the various parties involved needed to guard against "interference" from outside the region.
But the emphasis was on cooperation.
Wang said the two nations had established a platform of shared interests that included Singapore's financial capabilities and a planned road, railway and port route from inland China to Singapore through the Chinese coastal province of Guangxi.
"In the face of a sluggish global economy and rising backlash against globalization, China and Singapore as champions of regional integration need to work together," Wang said.
Despite the mutual praise on display Monday, questions remain over how much financing of China's development plans will come from Singapore, said Chong Ja Ian, an assistant professor at Singapore's National University focused on Asia-Pacific politics.
Hong Kong in particular could prove a more attractive alternative, given that it's part of China and has significant experience working with Chinese firms and the Communist Party government, Chong said.
Chong added that Singapore does not see its ties with China as exclusive, meaning the smaller nation won't give up its relationships with the U.S. and others outside the region. The U.S. Navy has a support facility at the Port of Singapore since 1992 and periodically holds joint exercises with Singapore's navy.
That means underlying tensions are likely to continue between China and Singapore, Chong suggested. "Some in China may see too much of a role by other actors, particularly those it sees as rivals, as more concerning," he said.
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