SINGAPORE — The People’s Bank of China today (July 9) officially announced its decision to allow companies and individuals in the Sino-Singapore Tianjin Eco-city (SSTEC) to conduct cross-border Renminbi transactions with financial institutions and corporates in Singapore.
First reported yesterday, PBC’s latest move followed a similar initiative announced for China-Singapore Suzhou Industrial Park (SIP) on June 13. Some banks here have already started financing SIP companies under the new framework, and they now expect similar opportunities coming from SSTEC.
“Since the launch of the SIP Cross-border RMB initiative in June, we had successfully disbursed our first loan to a Chinese company located within SIP. Given the similarities between the Tianjin RMB initiative and SIP RMB initiative, we see great potential for us to support businesses who were previously unable to access offshore funding,” said OCBC’s head of China business office for wholesale corporate marketing Mr Benjamin Quek.
“The new initiative, coupled with our existing presence in Tianjin, gives us greater impetus to extend our comprehensive suite of RMB financial solutions to more companies in the Tianjin Eco-city,” he added.
As part of PBC’s announcement today, companies in the SSTEC are also allowed to issue RMB bonds here. Equity investment funds in the SSTEC can also make direct investments in ASEAN including Singapore, the Chinese central bank said, while individuals from the City can make RMB remittances to settle current account and direct investment transactions.
Both the RMB initiatives for SIP and SSTEC were the results of an agreement reached at the Joint Council for Bilateral Cooperation between Singapore and China in October last year, as the Republic continues to grow its RMB infrastructure to back its ambition to become the premier offshore hub for the Chinese currency.
“This is an exciting time for Singapore’s development as a regional RMB clearing centre as we see more and more initiatives being introduced to expand the uses and benefits of RMB in the corporate sector,” said HSBC Singapore’s chief executive Mr Guy Harvey-Samuel.
“As a leader in cross-border RMB operations, HSBC will be able to offer our deep expertise and network connectivity to customers in SSETC and help them with working capital arrangements similar to the loan facilities of RMB150 million that we provided for two companies registered in the SIP just last month,” he added.