Singapore, China ink 14 pacts to step up cooperation, including an ETF product link

NEW initiatives that saw the expansion of financial cooperation between Singapore and China were discussed at a high-level bilateral forum on Wednesday (Dec 29).

Fourteen Memoranda of Understanding (MOUs) and agreements were announced at the 17th Joint Council for Bilateral Cooperation (JCBC). It was co-chaired by Singapore's Deputy Prime Minister Heng Swee Keat and China's Vice-Premier Han Zheng.

In his opening remarks at the virtual press conference for the 17th JCBC, DPM Heng noted that while Singapore has been actively transforming its economy across all sectors, China has adopted a new development paradigm of dual circulations and the goal of common prosperity. The "dual circulation" paradigm allows the domestic and overseas markets to reinforce each other, with the domestic market as the mainstay.

"While we face different national conditions, we have similar challenges and can learn from each other," he said.

The meeting reviewed bilateral cooperation areas such as the Belt and Road Initiative (BRI), trade, finance, sustainability, innovation and public health, as well as the China-Singapore Guangzhou Knowledge City project.

Among the initiatives to expand financial cooperation are discussions between the Singapore Exchange (SGX) and the China Foreign Exchange Trade System (CFETS) to establish connectivity between their bond trading platforms, which will enable greater investor access to China's bond market.

Furthermore, a memorandum of understanding was signed between SGX with the Shenzhen Stock Exchange to establish an exchange traded funds (ETF) product link. This would allow fund managers to offer ETF products to investors in both China and Singapore.

Another initiative announced is a collaboration between Asia Pacific Futures (APF) and the Shanghai International Energy Exchange (INE). The firm will be the first in Singapore to become an Overseas Special Brokerage Participant (OSBP), allowing Singapore-based investors to directly trade internationalised onshore commodity products through APF. The move is set to facilitate international participation and price discovery in China's commodity derivatives markets.

In the area of green finance, the Monetary Authority of Singapore and the People's Bank of China will explore deeper public-private sector collaboration in key areas such as taxonomies and green fintech.