CG Ong Siew Gay's speech at The China-Singapore Business Leaders Club Launch Ceremony on 21 March 2014

Distinguished Guests

Ladies and Gentlemen

·        It gives me great pleasure to be here today.

·        Today’s conference co-organized by the China-Singapore Business Leaders Club and Nanyang Technological University is a timely one.  Since the inauguration of the new Chinese leadership under President Xi Jinping, the Chinese government has sent clear signals of its resolve to push ahead with structural reforms.  As the world’s second largest economy, China is continuing to grow and develop, despite short-term headwinds in the macro-economic environment.  

·        A major consequence of that growth trend is the emergence of a group of huge Chinese conglomerates, both in the public and private sectors, which are characterized not only by their size and market capitalization but also their global footprints and ambitions.  In fact, in recent years, we have already witnessed a surge in Chinese companies venturing out in search of global investment opportunities.

·        China has, as of 2012, become the world’s third largest source of FDI, after the US and Japan.  China’s growth story in this 21^st century will only continue to shape global trade and investment flows in significant ways. 

·        Those of us in Southeast Asia have witnessed first-hand the growing interest of Chinese enterprises in the regional market, which is well-endowed with abundant natural resources, a hardworking and sophisticated workforce and good physical infrastructure.

·        Within this context, Singapore, as the hub of Southeast Asia, and strategically positioned between the East and the West, is well-poised to ride on China’s rapid growth and contribute our part to help Chinese investments go global. 

·        Singapore is an ideal destination for Chinese investors going global.  We provide an easy and low-risk environment for companies to conduct their businesses, with a mature legal structure and strong intellectual property protection laws.

·        We offer global connectivity, evident in our comprehensive network of free trade agreements and avoidance of double taxation agreements.  Singapore currently has the most extensive network of free trade agreements in Asia.  

·        Chinese investors can also leverage on our favorable tax policies, strong R&D, innovation infrastructure and access to talent who understand both the regional as well as the international markets. 

Ladies and Gentlemen

·        Some of you would be aware that since the designation of the Industrial and Commercial Bank of China (ICBC) as the RMB clearing bank in Singapore in May last year, Singapore became the first offshore RMB clearing centre outside greater China.  As of December 2013, total RMB deposits in Singapore stood at RMB 200 billion, a 70% increase over deposit levels in March last year. 

·        The commencement of RMB clearing arrangements in Singapore has also helped to promote RMB-denominated loans, mainly for trade financing purposes, which grew by almost 25% to reach RMB 300 billion last year.  To put this figure into perspective, Singapore now accounts for about 60% of RMB trade finance outside Mainland China and Hong Kong.

·        Since the launch of the RMB market in Singapore, we have seen six successful issuances of Lion City bonds totalling RMB 7.5 billion.  These Lion City bonds have been very well subscribed, and saw strong demand among investors in Singapore, as well as the region.

·        In addition, with the allocation of the RMB 50 billion Renminbi Qualified Foreign Institutional Investor (RQFII) quota in October last year, we have also seen keen interest from banks and asset management companies to apply for the quota.  This will soon contribute to a broader range of RMB product offerings that can cater to the needs of regional and international investors.  

·        Singapore looks forward to continue leveraging on our status as an established regional and global financial center to further promote the internationalization of the RMB as well as facilitate Chinese investors venturing into the regional and global market.

·        A Singapore official once likened Singapore, given our multi-racial and multi-cultural make-up, as a powerful cultural “power-convertor”.  Indeed, Singaporeans multi-cultural mindset is a highly priced asset which has given us an edge in navigating the global environment.  It enables Singaporeans to successfully plug into the global network and switch easily between different cultural and commercial environments. 

·        It is no wonder that as of today, Singapore has already attracted more than 4,500 Chinese companies.  As of December 2013, 137 Chinese enterprises have been listed on the SGX, with a combined market capitalization of about S$32.6 billion. 

·        This is a highly encouraging sign but I believe that it is only the beginning of an upward trend.  China’s rapid urbanization and continued economic reforms and development will only continue to promote greater opportunities for the benefits of our peoples from both sides. 

Ladies and Gentlemen,

·        China has long been an important economic partner with whom Singapore shares a robust relationship with.  Based on the latest statistics from the Chinese Ministry of Commerce, Singapore became China’s top foreign investor in 2013 with up to US$7 billion in investment volume, overtaking other major investors in the advanced economies.  For Shanghai, Singapore was also the third largest foreign investor, behind the US and Japan with US14.6 billion dollars of cumulative investments. 

·                   Singapore continues to take a strong interest in the China and Shanghai market.  I am heartened to report that since the establishment of the China (Shanghai) Pilot Free Trade Zone, all the major Singapore banks including DBS, UOB and OCBC, as well as the Singapore Food Manufacturers Association (SMFA), have set up operations to tap new opportunities in the Zone. 

·                   I understand from Chinese officials that of the 524 foreign companies registered in the Zone, there are 12 Singapore companies taking up some 5.8% of the total foreign investments in the SFTZ. 

·                   This is a clear illustration of the importance Singapore investors accord to Shanghai and China.

·                   On a closing note, let me congratulate the China-Singapore Business Leaders Club and Nanyang Technological University for organizing this meaningful event. 

·                   I wish you an enjoyable afternoon ahead.

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(26 March 2014)