China and Singapore to collaborate on funds and green finance

Out-Law News | 11 Dec 2020 | 3:29 am | 1 min. read

China and Singapore have announced joint financial initiatives, including billions of renminbi of financing from China for banks in Singapore.

MAS announced an initiative for providing up to RMB 25 billion of funding to banks in Singapore two weeks ago. Under the plan, RMB funding of up to three months will be channelled to Primary Dealers (PDs) through MAS’ money market operations.

Financial regulators China Securities Regulatory Commission (CSRC), the People's Bank of China, Chinese central and provincial counterparts are working on further collaboration with MAS on exchange traded funds, digital finance and green finance, a MAS statement said.

MAS granted a qualifying full bank (QFB) licence to China Construction Bank (CCB) under the China-Singapore Free Trade Agreement Upgrade Protocol. CCB Singapore Branch said it would build up a commodity trade-financing centre, an investment banking transaction centre and a fintech innovation centre in the city-state after it has granted the QFB license, according to a Xinhua report

MAS has recognised Zhengzhou Commodity Exchange as a recognized market operator, allowing investors in Singapore access to the commodity derivatives markets in China.

Nicholas Hanna of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, the law firm behind Out-Law, said: "China and Singapore have cemented their growth initiative to forge the relationship in the finance sector here in Singapore. This should open the doors for opportunities in the fintech, trade and commodities and renewables sectors."

"Singapore is a leader in financial services in south east Asia, having established a financial hub for the region. These initiatives will appeal to businesses in Asia and attract them to Singapore, promoting commerce in the region. China’s capital injection will no doubt buy them a seat at the table for growth in the region," said Hanna.