HONG KONG — China’s central bank will allow companies and individuals in Tianjin Eco-City to conduct cross-border yuan transactions with Singapore, following in the footsteps of Suzhou Industrial Park, where a trial scheme was approved last month.
The People’s Bank of China (PBOC) has released rules to banks to kick off the Tianjin trial, which will allow equity investment funds and individuals to make overseas investments in yuan. It will also let firms in the area take up yuan loans from banks in Singapore, three sources told Reuters yesterday.
An official from Tianjin Eco-City said it would hold a news conference with the PBOC today.
Tianjin Eco-City, launched in 2007, is a joint project of the Chinese and Singaporean governments that aims to develop a template for environmentally friendly cities.
The initial quota for cross-border yuan lending between Tianjin Eco-City and Singapore this year is 2 billion yuan (S$401.5 million), the source added. “We have already started to cultivate Tianjin corporate clients actively for cross-border lending and bond issuance business,” said an official at a branch of a Chinese state-owned bank in Singapore.
Companies that will be permitted to conduct cross-border yuan transactions with Singapore need to register in the eco-city. Banks involved include lenders in Singapore and those set up by the Tianjin government.