Congratulatory remarks by Mr Leong Sing Chiong, Assistant Managing Director, Monetary Authority of Singapore, at ICBC Singapore 20th Anniversary Event on 20 November 2013
Mr Zheng Chao, Minister Councillor of Commercial and Economic Office
Embassy of the Republic of China in Singapore
Mr Zhang Wei Wu, General Manager, ICBC Singapore
Distinguished guests, ladies and gentlemen
1 I am delighted to be here this evening to join in the celebrations to mark the 20th anniversary of ICBC’s presence in Singapore. ICBC, as most of you would know, is one of the world’s largest banks by assets. In 1993, ICBC officially established its first overseas branch in Singapore. Over the years, ICBC Singapore has grown from being an offshore bank with a limited product suite, to becoming one of the key banks in Singapore with qualifying full bank privileges.
2 2012, in particular, marks a key milestone for ICBC. This was the year when MAS concluded an enhanced financial services package under the China-Singapore Free Trade Agreement whereby Singapore would extend 2 Qualifying Full Bank, or QFB privileges to 2 Chinese Banks, and China would appoint one of them as the RMB clearing bank in Singapore. In October last year, MAS awarded QFB privileges to the Singapore branches of both ICBC as well as Bank of China, and by February this year, which marks yet another key milestone year for ICBC, the People’s Bank of China announced that ICBC (Singapore) would be designated as RMB clearing bank in Singapore. As you know, ICBC successfully launched its RMB clearing activities shortly after, in end-May.
3 With the QFB privileges it now enjoys, ICBC has been expanding its business presence in Singapore. It has set its sights on making Singapore its South East Asia Hub for RMB business, commodity and structured trade finance as well as cash management. ICBC is also the first Chinese Bank to establish a Debt Capital Market team in Singapore, and it has kick-started its private banking hub business today.
4 MAS warmly welcomes these developments. ICBC’s commitments and goals are closely aligned with Singapore’s financial centre strengths – we are the regional trade financing and commodities trading hub. We have a vibrant debt market and are also a leading asset and wealth management centre in the region. Singapore can therefore serve as a useful platform to support ICBC’s regionalisation plans.
5 Equally, ICBC will also contribute significantly to Singapore’s growth as a financial centre. Already, as the only RMB Clearing Bank that is appointed outside Greater China, ICBC is playing a pivotal role in the growth and development of Singapore’s RMB market. Here, I would like to take this opportunity to pay tribute to the tireless efforts of GM Zhang and your staff, who have worked unceasingly throughout this year to ensure the smooth functioning of RMB clearing activities in Singapore. Pre-launch, you have worked hard to carry out all the necessary tests to ensure that all systems were in order. Post-launch, you have responded in a timely fashion to the needs of the banks and financial institutions as well as your clients here, and put in place numerous measures to ensure a competitive RMB clearing infrastructure in Singapore. The strong growth in RMB activities in Singapore since May is an excellent testimony of ICBC’s capabilities, and we look forward to many more years of fruitful cooperation with you.
6 So what lies ahead in the next 20 years? I see three main drivers: First, China’s growth. China has done remarkably well over the past few decades but it has now reached a critical juncture in its development where it is embarking on important structural reforms. Managing this transition will not be easy, in part because of the sheer size of the Chinese economy, but if done right, these reforms can put China on a sustainable path of continuous growth and long-term prosperity.
7 Second, as China grows, so will intra-regional trade. China was Singapore’s third largest trading partner last year, and Singapore was the third largest source of foreign direct investment into China last year. Bilateral trade between ASEAN and China has also grown strongly in the last 10 years, reaching a record high of US$400 billion last year. Singapore plays an important bridging role between China and ASEAN, and many Chinese companies are using Singapore as their hub to conduct business in this region. As economic and financial ties between Singapore and China continue to deepen, ICBC Singapore will play an important role as enabler of trade and investment between China and ASEAN, as well as the rest of the world.
8 Third, RMB cooperation between China and Singapore will continue to strengthen. Last month, Singapore and China agreed on a number of new initiatives to promote the international use of the RMB through Singapore. These include the RMB Qualified Foreign Institutional Investor programme (“RQFII”), and cross border RMB arrangements between Singapore and Suzhou Industrial Park, as well as Tianjin Eco-city. These RMB cooperation initiatives augur well for the long-term growth of the RMB market in Singapore and the region.
9 As some of you may already know, I hold the view that RMB internationalisation has the potential to transform the Asian financial landscape over the medium term. Against this backdrop, Singapore has committed to build RMB capabilities early. As the role of the RMB continues to evolve, I am confident that ICBC Singapore will continue to play a key role in shaping the development of RMB markets here, and contribute significantly to the growth of Singapore’s financial centre. On this note, I wish ICBC every success in your business here in Singapore, and look forward to many more good years to come.