STRENGTHENING FINANCIAL COOPERATION
Bilateral financial cooperation will get a boost with several green finance and capital markets initiatives.
One tie-up between the Singapore and China central banks aims to catalyse green financing flows. The exercise, which compares the green criteria of the European Union, China and Singapore taxonomies, will be completed by the end of this year, the Monetary Authority of Singapore said in a press release on Monday.
“This will enable easier comparison of the green taxonomies of Singapore and China and facilitate the provision of cross-border green loans, green bond issuance and fund investments.”
MAS and the People’s Bank of China are also exploring a pilot with both countries’ banks to enhance international investors’ access to China’s bond market. It will leverage the existing “over-the-counter” bond market framework in China.
Other collaborations include discussions to expand the suite of products on the ETF Product Links between the Singapore Exchange and the Shenzhen and Shanghai bourses, as well as facilitating financial institutions’ access to Singapore and China markets.
FACILITATING TRADE AND INVESTMENTS
In trade, Singapore and China reiterated their commitment to the China-Singapore Free Trade Agreement (CSFTA) Further Upgrade Protocol, which is set to enter into force on Dec 31, 2024, said Singapore’s Ministry of Trade and Industry (MTI) in a separate press release.
The CSFTA is China’s first comprehensive bilateral free trade agreement with an Asian country. It came into force in 2009, and the latest planned enhancements were inked at last year’s JCBC.
Under them, Singapore investors and service suppliers can expect “more liberal and transparent rules” that level the playing field for them to invest in and trade with China, MTI said.
The ministry added that Singapore businesses will also benefit from greater market access to China through a “negative list” approach, where by default, all sectors are opened to investors except for those specifically listed.
“Notably, China commits to not limiting foreign equity limits for Singapore investors in 22 sectors such as construction, retailing & wholesale, and architectural & urban planning services,” MTI said.
Another agreement focuses on the joint promotion of the Belt and Road Initiative. It aims to strengthen Singapore and China’s collaboration in areas such as policy coordination, infrastructure connectivity, bilateral trade and people-to-people exchanges.
“(This) will provide clearer policy guidance for the next phase of high-quality Belt and Road development, further promoting the joint growth of China, Singapore, and regional countries,” said Mr Ding.
Since 2013, Singapore has been China’s largest foreign investor in terms of investment flows, and China has been Singapore’s largest merchandise trading partner. Bilateral trade in 2023 amounted to US$108.39 billion, according to China’s foreign ministry.
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