Singapore and China Strengthen Financial Collaboration


The Monetary Authority of Singapore (MAS) has introduced fresh initiatives to enhance collaboration in digital finance and capital markets with China. The announcement highlighted these advancements as a central theme during the 19th Joint Council for Bilateral Cooperation (JCBC) in Tianjin. Co-chaired by Singapore's Deputy Prime Minister and Minister for Finance, Lawrence Wong, and the Executive Vice Premier of the State Council in the People’s Republic of China, Ding Xuexiang, the meeting focused on strengthening financial ties between the two nations.

One of the initiatives unveiled is the Cross-border E-CNY Pilot, stemming from the 2020 Memorandum of Understanding (MOU) on digital finance collaboration between MAS and the Digital Currency Institute of the People's Bank of China (PBCDCI). This program aims to enhance the ease of transactions for tourists in Singapore and China by allowing the use of e-CNY for tourism expenses, thus improving transaction convenience in both nations.

Additionally, the Singapore Exchange (SGX) and the Shanghai Stock Exchange (SSE) have launched the Exchange Traded Funds (ETF) Product Link. Following the successful initiation of a similar link between the SGX and Shenzhen Stock Exchange (SZSE) in 2022, the SGX and SSE signed an MOU in May 2023 to establish this new connection. On December 1, 2023, the CSOP Huatai-Pinebridge SSE Dividend Index ETF and the CSOP iEdge Southeast Asia+ TECH Index ETF were introduced as the first products under this new ETF Product Link. This launch signifies a step forward in enhancing collaboration between fund managers in both markets and improving investor access to ETF products.

The SGX has also signed an MOU with the Guangzhou Futures Exchange (GFEX) to engage in mutual information exchange, visits, training, and joint product and business area research, with a focus on green development. Singapore's local banks and China's UnionPay International have also initiated preliminary discussions on a potential remittance link between Singapore’s PayNow and UnionPay. This link, subject to respective legal and regulatory frameworks, could offer secure, efficient, and cost-effective cross-border payment and remittance options between the two nations.

During the 18th Joint Council for Bilateral Cooperation (JCBC), the China-Singapore Green Finance Task Force (GFTF) was established to enhance collaboration in green and transition finance. In its inaugural meeting held in April 2023, MAS and the People's Bank of China concentrated on various initiatives. These included the development of a green corridor dedicated to green and transition financing products, along with efforts focused on capacity building in these specific financial areas.

"It has been a fruitful year of financial cooperation between Singapore and China", said Leong Sing Chiong, MAS deputy managing director for markets and development. "MAS welcomes the new initiatives in digital finance and capital markets connectivity, as these will catalyse new financial flows between our financial centres, and deepen trade and economic relations between our economies", he added.

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