Singapore-Chongqing initiative moves forward as billions in deals signed

SINGAPORE — The Chongqing Connectivity Initiative (CCI), the third government-led project between Singapore and China that was first announced by Chinese President Xi Jinping during his state visit to the Republic last November, has taken off in a big way.

As part of the initiative, Singapore’s financial sector has been ­involved in brokering close to S$4.5 billion in deals with Chongqing companies as of last month, said Mr Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS). On Friday (July 22), another 28 agreements were signed, involving transactions valued at more than US$1.6 billion (S$2.2 billion), he added.

“These agreements mark the start of new collaboration among financial institutions, as well as specific ­financing deals in bond issuances and cross-border loans,” said Mr Menon in a speech delivered to a 430-strong crowd at the Singapore-China (Chongqing) Financial Conference in the Chinese metropolis.

Among these deals is Chongqing Grain’s issuance of its first ever yuan-denominated Lion City bond in Singapore, worth 1 billion yuan (S$203 million). “The issuance ­attracted overwhelming interest from offshore investors. Subscription exceeded more than nine times its issuance value, reflecting the strong latent demand for yuan offerings in Singapore,” he said.

The CCI demonstrates the strong ties and long history of cooperation between China and Singapore and underscores the transformation of the Chinese economy as innovation, technology and modern services ­become key drivers in the country’s next phase of growth, said Mr Menon.

Singapore can support the financial priorities of CCI through the following initiatives: Strengthening trade and investment between China and South-east Asia, promoting infrastructure investment and financing and broadening investment and ­asset management options for Chinese companies and individuals, he added.

“Singapore offers an effective gateway for the expansion of Chinese companies into the region, as more than 6,500 Chinese enterprises are established in Singapore. Many of them have based their regional headquarters in Singapore to cover their South-east Asia portfolio — well-known firms like Xiaomi, Alibaba, Haier, ­Baosteel and Qingjian, to name a few,” said Mr Menon.

As an international financial centre, Singapore can also offer the breadth and depth of banking and capital market services to Chinese companies — from advice on regional markets to funding and capital management solutions.

“Singapore’s pan-Asian asset management capabilities and access to a ­diverse range of managers can provide Chongqing investors with ­access to a broader suite of investment products and asset types. For example, Singapore can offer diversification and risk-management solutions to meet some of the objectives of Chongqing’s pension investment,” said Mr Menon.