Singapore to benefit from more-open Asian markets

Singapore — The Republic will benefit from having a more open and rule-based economic framework in Asia, as regional states push for further market integration via free trade agreements (FTAs) such as the Trans Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP).

Against this backdrop, Singapore’s financial industry will continue to thrive, with new opportunities arising from the increasingly open markets, said Minister for Trade and Industry, Mr Lim Hng Kiang, yesterday at the OCBC Global Treasury Regional Forum.

“As a participant of the TPP and RCEP... we support a free and open multilateral trading system and, as a small state, see great value in economic frameworks that are predictable, stable and rule-based,” said Mr Lim.

“Regional integration is an imperative if we want to see more jobs, higher real wages and better standards of living overall for our citizens,” he added.

“Integration will also benefit businesses, as trade liberalisation and regulatory coherence will reduce costs, improve productivity and facilitate participation in the global supply chain.”

Singapore, the United States and Japan are among 12 countries negotiating over the TPP, which is the world’s most ambitious FTA yet and will integrate 40 per cent of global gross domestic product.

Talks for the RCEP are also ongoing among 16 countries, including all ASEAN states and regional economic powerhouses India and China.

When finalised, the TPP and RCEP will add to the 20 FTAs to which Singapore is a signatory, including one with the US in 2004 and another with China in 2009.

As the Republic becomes more integrated with key markets overseas, its financial services industry has also benefited, said Mr Lim.

For instance, under the financial services package of the China-Singapore FTA in 2012, the Industrial and Commercial Bank of China (ICBC) was one of two Chinese banks to enjoy Qualifying Full Bank privileges. Within the year, ICBC Singapore became a yuan-clearing bank, making Singapore the first offshore yuan centre outside North Asia, he added.

“Today, we have a thriving financial ecosystem of more than 100 foreign banks here, offering an extensive suite of financial services, especially in wholesale and offshore banking,” Mr Lim noted.

“There will be more to come. With the TPP and RCEP, the industry can also look forward to new market–opening opportunities in the region.”

Professor Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy, also spoke at the forum, saying that as Singapore’s services industry continues to expand, the nation would enjoy growth opportunities from the rapid emergence of key regional economies such as India and Indonesia.

“If this region continues to grow and develop, it will need a global city to service it ... Singapore has spent 50 years developing one of the world’s best global cities and, by sheer good fortune, this city is geographically in the best position to take advantage of Asia’s growth,” added the former diplomat.

“Clearly, Singapore is in a very sweet spot.” Wong Wei Han