China, Singapore ink 7 deals to boost ties

PHOTO: China, Singapore ink 7 deals to boost ties

Singapore and China have started a new phase in their long history of bilateral collaboration by inking new initiatives that would introduce closer financial cooperation and see them work together on joint projects in third countries in Africa and South-east Asia.

The biggest strides forward on Tuesday - a day when the two sides put pen to paper on seven deals - were the announcements that the two sides will begin trading directly in each other's currencies, and that Singapore will be included in a programme that allows financial institutions here to invest up to 50 billion yuan (S$10.2 billion) directly in the Chinese securities market.

They were among the many outcomes from a morning of high-level meetings chaired by Deputy Prime Minister Teo Chee Hean and visiting Chinese Vice-Premier Zhang Gaoli.

Speaking to reporters after the meeting of the Joint Council for Bilateral Cooperation - the top bilateral body - DPM Teo said that this year's talks were especially significant given that both countries are in transition.

"Both Singapore and China are going through transformations, and China, in particular, is going through a new phase of its development under a dynamic new leadership. Therefore, there are new connections, new types of exchanges that China is seeking to make and there are many opportunities where we can work together for this purpose," he said.

The other two meetings held in the morning were those of the 15th Suzhou Industrial Park Joint Steering Council (JSC) and the sixth Tianjin Eco-City JSC.

The agreements boosting financial links mean that Singaporean businesses looking to deal in yuan would no longer have to first convert their Singapore dollars to a different currency, such as the US dollar. Singapore's inclusion in the Renminbi Qualified Foreign Institutional Investor programme would allow local investors to gain access to opportunities in China.

Said Trade and Industry Minister Lim Hng Kiang: "The big picture is that China is embarking on a very dramatic reform of its economy, and the MTI economic agencies have been working with their counterparts to see how Singapore can weave itself into and support China's reforms."

Among the other noteworthy agreements unveiled was a memorandum of understanding (MOU) signed between International Enterprise Singapore and the China Development Bank to help companies from both countries break into emerging markets, starting with South-east Asia and Africa.

The deal has two planks. The first would involve the sharing of expertise and networks: Singapore will help Chinese companies gain a foothold in South-east Asia while China will do the same for Singaporean firms in Africa where it is already established.

The other seeks to give firms easier access to financing when investing in infrastructure in third countries. Few details were available although officials said it is unrelated to the idea of an Asian infrastructure investment bank mooted recently by Chinese President Xi Jinping.

There were also agreements to start a "smart city" within the Suzhou Industrial Park and an MOU to establish a Trade in Services Working Group, meant to promote exchanges in sectors such as education, health care, finance and urban planning.

On Tuesday, Mr Zhang, a member of China's elite Politburo Standing Committee, also met President Tony Tan Keng Yam and Prime Minister Lee Hsien Loong.

He will wrap up his three-day official visit today with a tour of Anchorvale Community Centre and the Sengkang Floating Wetlands.

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