Singapore has long enjoyed recognition as the financial and commercial hub of Southeast Asia. The "Lion City," keeps the regional economy roaring ahead. The City-State has boosted China's development since establishing diplomatic relations 25 years ago. [Special coverage]
Accordingly, Chinese President Xi Jinping has paid a state visit to Singapore over the weekend to meet their President Tony Ton Keng Yam and Prime Minister Lee Hsien Loong.
"The visit will inject new direction and momentum into bilateral relations and open up a new chapter for the relationship," Chinese Amabassodor to Singapore Chen Xiadong told ChannelNewsAsia. "The visit will underline Singapore-China cooperation and friendship."
Xi has signed major deals on economic cooperation, as well as promoting education and exchanges, along with touting China's 'Belt and Road' (B&R) initiative.
Smooth sailing for Maritime Silk Road
Over 6,200 Chinese companies operate in Singapore. The two nations have collaborated on large-scale projects in finance, technology, environmental protections, education, tourism and social governance, according to ECNS (English-language China News Service).
Xi launched B&R to strengthen infrastructure development, while upgrading trade, communication and transportation networks in the Africa-Asia-Europe region. The Maritime Silk Road region encompasses port cities and countries lying next to the Western Pacific and Indian Oceans.
Singapore stands at a strategic point for B&R, while the City-State has signed on as one of the founders of the China-led Asian Infrastructure Investment Bank (AIIB) that would provide much needed financing for projects in the emerging markets.
Singapore banks have provided technical support and capital to expand cross-border use of the Chinese currency, remninbi, RMB.
Tapping into RMB internationalization
The Monetary Authority of Singapore (MAS) announced last month that Singapore and two Chinese cities - Suzhou and Tianjin - will expand cross-border initiatives
Singapore banks can lend RMB to companies in the China-Singapore Suzhou Industrial Park (SIP) and Singapore-Tianjin Eco City (SSTEC). Both cities can issue RMB-denominated bonds in Singapore with 100 percent of the proceeds to be repatriated back to the companies.
SIP companies can borrow from Singapore companies, which are now permitted to set up financial centers in the country. In the SSTEC, Chinese banks can borrow from Singaporean banks.
"This has been a fruitful year for financial cooperation between Singapore and China," MAS managing director told Out-Law, news Website. "The initiatives announced are a testament to the excellent relations between MAS and our counterparts in China."
He added, "We look forward to strengthening these relations and forming new pathways as we grow our financial markets together."
Future-oriented industrial parks
Beijing's support for industrial parks and trade zones in the country hasve jumpstarted China's economic development in the past few decades. Such designated areas have sparked an industrial boom nationwide.
However, Beijing is moving away from a manufacturing-based economy and towards an innovations and services-driven market. Singapore has introduced industrial parks in Suzhou and Tianjin that focus on hi-tech, renewable energy and IT sectors.
Singapore has also built other lesser-known parks, such as the Singapore-Wuxi Industrial Park (WSIP) in eastern China's Jiangxi province near Shanghai.
The WSIP has entered the phase I stage of the 400-hectares Sino-Singapore Solar City photovoltaic park that hopes to attract renewable energy companies helping China overcome its pollution problems.
Join hands to go global
Beijing has encouraged Chinese companies to go global. Historically, Singapore's government has provided much guidance for its companies to expand worldwide.
China has witnessed Singapore's rise and wishes to learn from its expertise and experiences. Xi's visit to the City-State will set the tone for China's new economy that would be services-oriented, innovative and more globalized.
