On 1 November 2022, the Monetary Authority of Singapore (“MAS”) announced new initiatives to expand cooperation in green finance and deepen capital market linkages with China. The initiatives were discussed at the 18th Joint Council for Bilateral Cooperation (“JCBC”) in Singapore, co-chaired by Singapore Deputy Prime Minister and Coordinating Minister for Economic Policies Heng Swee Keat and People’s Republic of China Executive Vice Premier of the State Council, Han Zheng.
Nineteen Memoranda of Understanding (“MOUs”) were also agreed during this high-level meeting.
This article outlines some of the key developments at the JCBC.
Green Finance Taskforce
It was agreed that a Green Finance Taskforce (“Taskforce”) would be established by MAS and the People’s Bank of China. The Taskforce will serve to deepen bilateral cooperation in green finance, facilitate greater public-private sector exchanges to better mobilise private capital for the region’s sustainable development needs, and will continue to explore further collaboration opportunities.
Collaboration opportunities could be possible in the following areas:
- Standards and definitions
- Green and transition financing solutions
- Data and technology enablers to catalyse green financing flows
- Green investment opportunities in China and the region
Exchange Traded Funds product link
Further to its agreement in December 2021 to establish a cross-border link for exchange traded funds (“ETF Product Link”), the Singapore Exchange (“SGX”) and the Shenzhen Stock Exchange (“SZSE”) will welcome the first three participating ETFs under the ETF Product Link by the end of 2022. The ETF Product Link will allow investors in both China and Singapore to access ETF investment opportunities in each other’s markets.
Low Carbon Index Family by Chinese and Singapore Exchanges
It was announced at the meeting that SGX, the Shanghai Stock Exchange and SZSE will jointly launch a “Low Carbon Index Family” by the end of 2022 (“LCIF”). The LCIF is intended to serve as a benchmark for fund managers in launching new green funds focused on China, ASEAN and other countries in Asia. The LCIF will also raise investor interest in green investment opportunities in the Asia Pacific region, including the channelling of capital towards the region’s leading sustainable firms.
Deputy Prime Minister Heng and Vice Premier Han reviewed their countries’ strong bilateral cooperation in relation to the Belt and Road Initiative, economic, trade and sustainability, innovation, finance, public health, people-to-people and cultural exchanges, and the China-Singapore Guangzhou Knowledge City.
It was agreed that Singapore and China should, moving forward, continue to deepen cooperation in areas such as trade, third party collaboration, science and technology innovation cooperation, smart cities, finance, public health and epidemic response, leadership development, social governance, human resources development, education, and cultural and tourism exchanges.
It was in this spirit of continuing mutual cooperation that the 18th JCBC saw 19 MOUs and agreements announced. The MOUs span a range of areas, including electronic commerce cooperation, innovation cooperation and deepening green development cooperation.
The press release issued by the Singapore Prime Minister’s Office on the occasion of the 18th JCBC is available on the PMO website www.pmo.gov.sg. The press release issued by MAS is available on its website www.mas.gov.sg.