The Monetary Authority of Singapore (MAS) announced new initiatives aimed at bolstering financial cooperation with China.
These initiatives focus on green finance and capital markets, further solidifying the strong ties between the two nations.
One of the key initiatives is the expansion of the Common Ground Taxonomy (CGT) to include the Singapore-Asia Taxonomy by the end of 2024.
This exercise, which compares the green criteria of the European Union, China, and Singapore taxonomies, will facilitate cross-border green financing activities such as loans, bond issuances, and investments.
Industry partners from both countries are also collaborating on Panda Bond issuances through a Green Corridor to further promote green financing flows.
For example, CapitaLand Investment recently issued a 3-year sustainability-linked Panda Bond totaling RMB 2 billion under this framework.
MAS and the People’s Bank of China are also exploring a pilot program to enhance international investors’ access to China’s bond market.
This pilot will enable Singaporean banks to provide trading and custody services for selected fixed income products within the China Interbank Bond Market.
Furthermore, MAS and the China Securities Regulatory Commission are discussing the expansion of existing Exchange Traded Funds (ETF) Product Links between the Singapore Exchange (SGX) and the Shenzhen and Shanghai Stock Exchanges, which were launched in 2022 and 2023, respectively.
SGX is also collaborating with China Securities Index to develop a second index, following the successful launch of their Emerging Asia Technology Index earlier this year.
The initiatives were announced at the 20th Joint Council for Bilateral Cooperation (JCBC) meeting, co-chaired by Singapore Deputy Prime Minister Gan Kim Yong and China’s Vice Premier Ding Xuexiang.
The meeting also saw the first-ever listing of a Panda Bond on the Singapore Exchange, a RMB 5 billion, three-year bond issued by UOB in October 2024 with Bank of China Singapore as the lead bookrunner, signaling growing interest in this market.
A Memorandum of Understanding between UOB and the Shanghai Gold Exchange was also concluded to enhance cooperation in gold trading and services, specifically to provide innovative services to ASEAN gold suppliers and investors by facilitating proprietary trading and physical delivery of gold products.
Finally, MAS welcomed the listing of eligible Chinese companies on SGX, allowing them to tap into Southeast Asian markets and access international capital.
This aligns with the China Securities Regulatory Commission’s (CSRC) policy of supporting eligible onshore companies to access international capital markets for growth.
Chee Hong Tat, Minister for Transport and Second Minister for Finance, and Deputy Chairman of MAS said,
“Financial cooperation has been a key pillar underpinning the strong bilateral relations between China and Singapore.
The strong slate of initiatives announced today at the 20th anniversary of JCBC reflects our continued commitment to deepen financial connectivity between our markets.”
Featured image credit: Edited from Freepik
