Singapore, 27 October 2014…Singapore and China today agreed to further strengthen financial cooperation through new path-finding initiatives in the offshore Renminbi (RMB) market, capital markets and insurance.  The agreement was reached at the 11th Joint Council for Bilateral Cooperation (JCBC) meeting held in Suzhou and co-chaired by Singapore Deputy Prime Minister, Coordinating Minister for National Security and Minister for Home Affairs, Mr Teo Chee Hean, and People’s Republic of China Vice Premier of the State Council, Mr Zhang Gaoli.

2   Two initiatives agreed at the meeting will strengthen economic and financial linkages between Singapore and China, further promoting the international use of RMB for trade and investment:

(i) Direct currency trading between the Chinese Yuan and Singapore Dollar will commence on 28 October 2014. This will lower foreign exchange transaction costs and encourage greater use of the two currencies in cross-border trade and investments. 

(ii) Singapore proposed to allow China-incorporated financial institutions to issue RMB-denominated debt instruments in Singapore directly. This will help to diversify long-term funding for Chinese financial institutions by allowing them to tap into the international institutional investor base in Singapore.

3   Singapore and China also agreed to strengthen cooperation in the areas of capital markets and insurance.  The Monetary Authority of Singapore (MAS) and the China Securities Regulatory Commission (CSRC) will study measures to enhance collaboration between the derivatives markets of Singapore and China.  MAS and the China Insurance Regulatory Commission will explore collaborative initiatives in the area of catastrophe risk insurance.  These new areas of cooperation will broaden financial ties between Singapore and China and be beneficial to both countries. 

4   Leaders from both sides also acknowledged that the successful implementation of previous financial cooperation initiatives has generated significant benefits. About 30 companies from the Suzhou Industrial Park and Tianjin Eco-city have borrowed nearly RMB 2 billion from banks in Singapore through the cross-border RMB lending initiative; and seven Singapore-based institutional investors have received approval from CSRC to participate in the RMB Qualified Foreign Institutional Investor scheme. 

5   MAS Deputy Managing Director, Ms Jacqueline Loh, said: “Financial cooperation has become a pillar for Sino-Singapore bilateral relations.  The successful implementation of the financial cooperation initiatives and the new areas of cooperation agreed at the 11th JCBC meeting bear testament to the excellent relations between MAS and its counterparts in China.  As China proceeds with its structural transformation and financial reform, financial cooperation between the two countries will grow in importance and mutual benefit.”