ASIA NEWS NETWORK
WE KNOW ASIA BETTER
Tianjin Eco-city firms can get loans from Singapore
Publication Date : 10-07-2014
Companies in the Sino-Singapore Tianjin Eco-city (SSTEC) can now take yuan loans from banks in Singapore as part of a move announced by China's central bank yesterday, boosting Singapore's efforts to become a major offshore trading centre for the Chinese currency, also known as the renminbi.
The green light for a range of cross-border yuan transactions by the central bank's Tianjin branch was part of an agreement struck at the 10th Joint Council for Bilateral Cooperation held in Singapore last October that China's seventh-ranked leader Zhang Gaoli attended.
It follows a similar initiative introduced last month at the China-Singapore Suzhou Industrial Park (SIP) as both countries stepped up their financial cooperation.
Among other new rules that will give firms in the eco-city more diversified funding sources and facilitate greater use of the yuan in the region, equity investment funds there will now be able to make direct investments in Singapore and Asean.
Companies will also be allowed to issue yuan bonds in Singapore, while individuals in the eco-city will be able to make yuan remittances to settle current account and direct investment transactions.
Senior minister of state for trade and industry and national development Lee Yi Shyan said financial services is an important area for cooperation which will be enhanced under this initiative.
"Over time, more Singapore investors can tap the growth of companies located in the SSTEC," he added.
Responding to the latest move, Benjamin Quek, OCBC Bank's head of China business office, wholesale corporate marketing, said: "Since the launch of the SIP cross-border RMB initiative... we have successfully disbursed our first loan to a Chinese company located within it... Given the similarities between the Tianjin and SIP RMB initiatives, we see great potential in supporting businesses previously unable to access offshore funding."
Singapore made its debut in May last year as the first offshore yuan hub outside Greater China.
Separately, an initiative by the Singapore Food Manufacturers' Association (SFMA) and supported by International Enterprise Singapore to promote the Singapore's food and beverage industry in China was launched in eastern Zhejiang province yesterday.
Lim Hng Kiang, trade and industry minister, and Liang Liming, vice-governor of Zhejiang Province, opened the Tasty Singapore Food Product Centre in the Yiwu International Commodity Trade Mart.
Said Thomas Pek, president of the SFMA: "China may be a daunting market because of its complex landscape and customs requirements. We hope this centre will give SMEs more confidence as a result of having access to shared promotional channels and a visible platform to launch their presence and network in China."
- See more at: http://www.stasiareport.com/the-big-story/asia-report/china/story/tianjin-eco-city-firms-can-get-yuan-loans-singapore-20140710#sthash.JLDbbpi9.dpuf