This first section provides an overview and analysis of the full Quantitative Report which follows.

Southeast Asia’s growing economic linkages with and dependence on China for investment have generated political opportunities and strategic concerns in equal measure. However, recent discussions have tended to focus on infrastructure projects, especially those associated with the Belt and Road Initiative (BRI). This narrow focus can be misleading, and an understanding of the fuller picture of Chinese investments in Southeast Asia is necessary for those seeking to understand its significance and impacts. The People’s Republic of China (PRC) is not a new player in this game, having had a longer history of providing investment and aid in this region, particularly in support of independence struggles and civil and regional conflicts during the Cold War. After 1990 and reflecting Beijing’s economic reform and internationalization strategy, Chinese investment in Southeast Asia picked up gradually across varied sectors. Prior to President Xi Jinping’s unveiling in 2013 of what has come to be called BRI, Southeast Asia had already seen a turning point in the growing significance of Chinese investments during the global financial crisis in 2008/9.

This report is part of a research project that examines China’s investment in Southeast Asia, aiming to provide a regionwide, multi-sectoral analysis that allows comparisons and facilitates policy calibration and focus. In this quantitative report, we present the baseline quantitative survey and analysis of key changes in Chinese investments in Southeast Asian economies over the most recent fifteen years, from 2005 to 2019, for which comparable data is available.

By “investment”, we refer to Chinese investment, project financing, and service provision in the region. The CGIT dataset that our report relies on captures the two key forms of Foreign Direct Investment (mergers and acquisitions, and greenfield investment), as well as other forms of cross-border investment flows associated with Chinese investments in Southeast Asia. Construction contracts, in particular, often accompany Chinese overseas investment and are a form of trade in services that can be even more significant than FDI.

1.1 Regionwide Trends

Foreign investments in Southeast Asia (SEA) originating from China grew twentyfold during this fifteen-year period. This trend is more marked when we define foreign investments as including both ownership acquisition of specific enterprises, and service provision (such as construction contracts).

A1. Selection of Datasets on Chinese Investments in Southeast Asia

This report surveys key changes in Chinese investments in SEA economies since the mid-2000s (following from the Chinese government’s 1999 “Going Global” strategy). To achieve this research objective, we examined various databases on Chinese overseas investments, including:

• • China Global Investment Tracker (CGIT) database;

• • ASEAN Statistical Yearbooks;

• • Foreign direct investment (FDI) data compiled by the World Bank;

• • FDI data compiled by the International Monetary Fund (IMF);

• • FDI data compiled by the Asian Development Bank;

• • Statistical Bulletin of China’s Outward FDI released by China’s Ministry of Commerce;

• • Data on China’s outward direct investment released by China’s Bureau of Statistics;

• • Global Chinese Official Finance Dataset, 2000–2014, Version 1.0; and

• • China Global Energy Finance database.

We eventually decided to use the CGIT database as the primary data source for this project for three reasons. First, unlike other datasets on Chinese investment which are either too aggregated or too segmented, CGIT provides up-to-date data on Chinese investments in each SEA country by industrial sector over a reasonably long period, from 2005 to 2019 (as at the time when data analysis first commenced in early 2020). This allowed us to examine the industry-specific trends and patterns of Chinese investments in every SEA country over the past fifteen years and to compare the features of Chinese investments across SEA countries. Section A of this Appendix explains how we selected and classified industrial sectors for this project. Second, the CGIT database includes two broad types of Chinese investments—transactions involving Chinese acquisition of asset ownership, and Chinese provision of services, in SEA countries. These two classifications enabled us to further disaggregate the relative spread of types of investments across SEA countries and industrial sectors. Third, the CGIT database provides additional information about investors and other transaction parties, facilitating our identification of specific Chinese investments that were of significance or particular interest. The CGIT database is a public dataset compiled and published by the American Enterprise Institute and the Heritage Foundation in the United States.

However, it is important to note that the CGIT database only tracks “large” investments worth at least US$100 million.

2.1 Overview of Chinese Investments in Southeast Asia, 2005–19

Absolute Scale

Overall, foreign investments in SEA originating from China exhibited a general upward trend between 2005 and 2019, rising approximately twentyfold during this fifteen-year period. This trend is evident across different datasets that use differing measures of foreign investments (see Figure 9). Foreign direct investment is a commonly used measure of cross-border investments that captures foreign acquisition—by both state-owned entities and private entities—of ownership of target enterprises in destination countries. Data from ASEAN’s Statistical Yearbooks show that Chinese FDI to SEA grew exponentially from just over US$500 million in 2005 to roughly US$10 billion in 2018, peaking at US$13.7 billion in 2017. A broader measure of foreign investments would take into account cross-border transactions that involve not only ownership acquisition but also service provision. The CGIT database adopts this broader measure of foreign investments to track “large” Chinese overseas investments (those that are worth at least US$100 million). According to the CGIT database, Chinese investments in SEA soared from US$1.3 billion in 2005 to nearly US$31 billion in 2019, peaking at US$33.5 billion in 2018. A closer look at the trend of Chinese investments in SEA reveals that Chinese investments in SEA experienced its first phase of rapid expansion between 2009 and 2011, right after the end of the global financial crisis, and a second phase of rapid increase between 2014 and 2017, following the official announcement of Beijing’s BRI. Indeed, the vast majority of very large (at least US$1 billion) Chinese investments came after the advent of the BRI in 2013 for all SEA countries except Vietnam and Myanmar (as indicated in red and pink on Figure 10). However, between 2018 and the time of writing (late 2021), this growth appears to be slowing down or even declining modestly.

Relative Importance

Despite the substantial surge in the absolute amounts of Chinese investments in SEA between 2005 and 2019, the relative importance of Chinese FDI—as compared to other sources of FDI in SEA—did not increase as significantly. While China’s share of total FDI in SEA more than doubled—from an average of 3 per cent in 2005–10 to an average of 7 per cent in 2011–18—China had yet to establish itself as a dominant foreign investor in SEA. Table 1 displays annual FDI flows into ASEAN from 2005 to 2018.

Standing at the beach in East Coast Park, the eye is struck immediately by the huge ocean liners and cargo ships anchored out at sea as far as the horizon. On an exceptionally clear day it is possible to see as far as Batam, just across the Singapore Strait. At night, the lights from the ships come on, like shimmering little bonfires dotting the line of water. From land, this is an image of idyllic calm and irrepressible peace, with the sound of the waves taking one far from the chaos and bustle of the city. Yet this image is deceptive. Unless one has spent time at sea, it would not be immediately apparent that the reality is far less irenic and immutable. Indeed, for much of Singapore's history, the waters in and around the island had an unsavoury reputation as a place of danger and death. Traversing the Singapore Straits in the past often tested the mettle of a captain, and recounting this experience of the voyage formed a favourite subject in tales and lore, many of which have been forgotten today. The aim of this essay therefore is to provide a short history of sailing past Singapore, to familiarize those on terra firma with the four different waterways that sailors used and the incipient dangers they faced when navigating past the island before the modern era. This brief overview will equip the reader with a more seaward perspective and help to locate Singapore's arteries within a larger maritime framework.

Defining the Singapore Straits

The Singapore Strait (singular) is a body of water situated south of the Island of Singapore, separating the tip of the Malay Peninsula from the islands of Riau. Running approximately 113 kilometres in length, it includes small islands and reefs and merges, from west to east, the Melaka Strait and the Karimata Strait with the South China Sea. Today, the narrowest navigable part of the strait is between Singapore's southernmost island, Pulau Satumu, and Indonesia's Pulau Takong Besar, which is a distance of a mere 5.2 kilometres. Its widest point, by contrast, measures some 20 kilometres, between Malaysia's Tanjong Rumania and Bintan, of Indonesia's Riau Islands archipelago.

The Shah Muncher was a British country trader that was on its return voyage in 1796 from China to Bombay when it sank off the rocky outcropping of Pedra Branca. The British port of Singapore had of course not then been founded, but it is well within the realm of possibility that the ship travelling westward intended to call at one of the nearby ports of the Singapore and Melaka Straits. This might have been Riau (approximately today's Tanjung Pinang) on the island of Bintan, or perhaps even Melaka, where the ship could have taken on fresh water and provisions before sailing on to India.

This chapter does not discuss the ship or its cargo as such, but rather outlines in broad strokes the economic and political context in which the Shah Muncher was operating. To this end, the temporal scope of this chapter straddles the eighteenth and the early nineteenth centuries. It is perhaps opportune to define at this juncture the nature of the seaborne trade we are concerned with. What is country trade? And what is a country trader? Simply put, country trade refers to private trade within (or sometimes outside of) an established trading monopoly. European country trade in the Indian Ocean reaches back to the time of the earliest Portuguese explorers and adventurers at the turn of the 1400s and 1500s. But the most familiar monopoly would be the one held by the British East India Company based in London towards the modern period. Even though country trade could and did assume different forms, the term generally refers to private trade in certain commodities between specific ports. Linked to the country trade, the expression “country trader” then refers either to a natural person who carried out the trade, usually the captain or owner of the vessel who sailed under a particular national flag—in the specific case of the Shah Muncher it would refer to the British flag—or could otherwise refer to the entire ship. It should be stressed that private or country traders hailing from different parts of Europe became active in seaborne trade, especially in the Western Pacific and Indian Ocean during the second half of the eighteenth and early nineteenth centuries.

The state of scholarship on the pre-modern history of Singapore is rich. There has been a significant amount of research conducted, in particular, on the fourteenth century, or the Temasek period. These include almost four decades of archaeological excavations as well as a much longer tradition of textual analyses.

The discovery of the Temasek Wreck, a mid-fourteenth-century vessel that appears to have been on its way from South China to Southeast Asia when it foundered off what would eventually become the territorial waters of present-day Singapore, and which was possibly on its way to Temasek, appears at first glance to be a continuation of the research trajectory we are presently on. However, unlike the land-based excavation sites that continue to be opened, the discovery of this wreck, the first of its kind in Singapore waters, and in many ways the first of its kind in Southeast Asia, has the potential to expand our understanding of Singapore's pre-modern history in areas that scholars have hitherto not been able to embark upon.

This essay seeks to discuss the possibilities of new areas of research into the international history of Temasek, a late-thirteenth to early fifteenth-century port-polity centred on the north bank of the Singapore River. Specifically, it will explore the gaps in our current understanding of Temasek's international economy, its functions as a commercial port at the southern end of the Melaka Strait, its place in the larger Southeast Asian and Maritime East Asian world, and how data from the Temasek Wreck could potentially help to unlock these areas of research.

The State of Scholarship on the Pre-modern

International History of Temasek

Presently, historians have narrated Temasek as likely to have functioned as an international entrepôt serving as a trans-shipment hub for products coming from Southeast Asia, the Bay of Bengal littoral and South China Sea littoral. Historical texts and archaeological research indicate that a wide range of trade products, including Chinese ironware, ceramics and silks, flora material such as cotton, fauna products such as hornbill casques, and minerals such as tin and gold, were made available at Banzu—the main port of Temasek.

The fourteenth-century Temasek Wreck was excavated recently off Pedra Branca by the Archaeology Unit (AU) of the ISEAS – Yusof Ishak Institute (ISEAS) on behalf of the Singapore National Heritage Board (NHB). Details of the discovery, survey, excavation and outcomes are provided in the ISEAS publication Temasek Working Paper Series no. 4. Key findings, such as the cargo composition, date of loss, likely origin of the ship, probable port of lading and most likely destination are presented here, but not as stand-alone outcomes. The aim is to place the Temasek Wreck within the context of contemporary shipwrecks in this region in order to better understand the significance of early Singapore in the realm of regional maritime trade.

The Temasek Wreck

The Temasek Wreck was excavated intermittently from 2016 until 2019. Approximately 3.5 tonnes of ceramics were recovered, but little else. The ship itself had completely vanished. Without the anaerobic protection of deep and fine sediments, the hull has been scattered by waves and currents and consumed by Teredo worms.

While some intact examples have been retrieved, most of the ceramics are in the form of shards. Stoneware storage jars and smallmouth jars—most likely from Cizao—Longquan celadon dishes, bowls and jars and qingbai ware from Jingdezhen form the vast majority. There are small quantities of crude Fujian greenware, Dehua whiteware and fine shufu ware. But the most impressive element of the ceramic cargo is an extensive repertoire of rare Yuan dynasty blue-and-white porcelain, far more than has ever been recovered from a documented wreck site anywhere else in the world.

Without dated coins or organic material suitable for radiocarbon analysis, dating can only be attempted through the stylistic analysis of the ceramics cargo.

Longquan celadon first appeared in the twelfth century. It was favoured throughout most of the thirteenth century by the Song imperial court for its sumptuous jade-like attributes. During the fourteenth century, the Longquan kilns expanded production to cater to an ever-increasing demand for a wide repertoire of large moulded shapes from domestic and foreign markets. The array of Longquan celadon recovered from the Temasek Wreck is typical of the fourteenth century, but being more specific can be contentious due to the longevity of various decorative techniques and patterns.

Former Raffles Professor of History Wong Lin Ken commented that none of his colleagues has been able to explain the absence of any port on Singapore before Raffles arrived to establish one. The implicit assumption underlying Wong's comment is that there should have been a settlement or port on Singapore because of its strategic location on the sailing and trading routes connecting the South China Sea and the Bay of Bengal. This essay attempts to connect the fragmentary evidence not available to the late Prof Wong and his colleagues to reconstruct a port settlement in the Kallang Estuary from the late sixteenth through much of the seventeenth century.

D’Erédia's 1604 Map

One of the maps drawn by the Portuguese-Malayan explorer (or descobridor, as he is described in contemporary accounts), cartographer and mathematician Manoel Godinho de Erédia in his Declaram de Malaca e India Meridional com o Cathay (Description of Melaka, Meridional India and Cathay) about his travels in the region at the beginning of the seventeenth century is of the Straits of Singapore. It is unlikely de Eredia visited Singapore, but his map was based on information available to him.

The map, entitled “Chorographic description of the Straits of Sincapura and Sabban, 1604 a.d.”, is oriented with Johor at the bottom of the map and Sumatra at the top. The map identifies several features on the east coast of “Sincapura”. The northernmost feature identified is Tanjong Rusa, south of which are Tanah Merah, Sungei Bedok, Tanjong Rhu and a “Xabandaria”, respectively. Tanjong Rusa refers to Changi Point today and may take its name from the shoals off its coast that were once known as Běting Kusah or Tanion Rusa, as Erédia marked it in his map. Tanah Merah refers to the red-orange weathered lateritic cliffs along the coast (which have been levelled today). They were a prominent landmark for navigators and pilots up to the nineteenth century.

It is similarly marked as “Red cliffs” in James Horsburg's 1806 chart of “Singapore and Malacca”. Later sea charts distinguish between the “Red Cliffs” of Tanah Merah and Bedok. Other early maps of Singapore transcribed this old Malay place name as “Badok”—in the vicinity of the “small red cliff ”.

While excavating the fourteenth-century Temasek Wreck off Pedra Branca,1 tidal overfalls were frequently observed, waves broke on submerged rocks, and intense squalls struck out of nowhere. All this during neap tides in the calm season. The wrecking potential of the rock outcrop at the eastern entrance of the Singapore Strait was very apparent.

In 1596, the Dutch merchant Jan Huygen van Linschoten wrote:

Not just some. In Charles Buckley's 1902 work, An Anecdotal History of Singapore, he states:

Cursory examination of eighteenth-century records and nineteenthcentury newspapers revealed the names of several of the ships “lost on Pedra Branca”.

With a list of possible shipwrecks, and the potential discovery of more pre-European sites such as the Temasek Wreck, which were not recorded in state or company archives, the National Heritage Board (NHB) commissioned the Archaeology Unit (AU) of the ISEAS – Yusof Ishak Institute to carry out a search in the immediate vicinity of Pedra Branca. The rocky seabed precluded side-scan or multibeam sonar, so a magnetometer was deployed to detect cannons, anchors, iron cargoes or any other ferrous objects that could be associated with shipwrecks.

The search was conducted in mid-2019. After several fruitless dives on magnetometer hits, it was frustrating to discover that geomagnetic rock outcrops were causing the anomalies. But one anomaly was so big that it could only have been caused by a large quantity of iron. This turned out to be the twisted steel hull and cargo of the MV Yu Seung Ho, which had struck rocks and sank some three hundred metres east of Horsburgh Lighthouse in 1979.