China, Singapore boost global use of yuan
Print Edition
New initiatives to further promote the international use of yuan through Singapore were agreed at the 12th meeting of China-Singapore Joint Council for Bilateral Cooperation co-chaired by Chinese Vice Premier Zhang Gaoli and Singaporean Deputy Prime Minister Teo Chee Hean, the Monetary Authority of Singapore said in a statement yesterday.
MAS said the existing cross-border yuan initiatives between Singapore and the China-Singapore Suzhou Industrial Park (SIP) and Sino-Singapore Tianjin Eco-City (SSTEC) will be expanded to the cities of Suzhou and Tianjin, which means that banks in Singapore will be able to lend yuan to corporations across Suzhou and Tianjin, and those in Suzhou and Tianjin will be able to issue yuan bonds in Singapore.
The expansion will offer more financing options to Suzhou and Tianjin corporations as well as provide financial institutions and investors in Singapore with additional avenues to deploy their growing yuan liquidity in Singapore.
MAS said corporations in Suzhou and Tianjin will be allowed to repatriate 100 percent of the proceeds raised from bonds issued in Singapore. This greater flexibility will provide a stronger incentive for corporations in Suzhou and Tianjin to raise yuan funds in Singapore.
Corporations in SIP will be allowed to borrow from Singapore-based companies, which will facilitate SIP companies’ overseas expansion and provide them a stronger incentive to set up finance and treasury centers in Singapore.
Qualified privately owned banks in SSTEC will be allowed to borrow from Singapore-based banks, which will support the development of privately owned banks in SSTEC and allow such banks to establish commercial relationships with banks in Singapore.
MAS stated that Singapore supports the inclusion of the yuan in the International Monetary Fund’s Special Drawing Rights’ basket of currencies. The use of yuan for payments, trade settlement, and investments has grown rapidly in recent years.
Singapore and China also look forward to enhancing financial connectivity to support projects under the Belt and Road Initiative, in order to facilitate access by Chinese companies to ASEAN markets through Singapore, MAS said.
MAS Managing Director Ravi Menon noted that 2015 has been a fruitful year for financial cooperation between Singapore and China.
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