25 April 2023
In conjunction with the Singapore-China (Chongqing) Financial Summit (“Summit”) which was held on 20 and 21 April 2023, Singapore and China took steps to strengthen collaboration in finance and enhance the countries’ financial connectivity.
In addition to high level meetings, the Summit also played host to panel sessions involving ASEAN central bank representatives and financial sector leaders on key areas of mutual interest between the Western Region of China and ASEAN, such as cross-border financial connectivity, green finance, and FinTech.
The Monetary Authority of Singapore (“MAS”) highlighted the initiatives discussed at the Summit in two press releases, which are discussed in this article.
On 20 April 2023, MAS issued a press release which set out the continuing efforts by Singapore and the Western Region of China to boost financial connectivity.
Minister for Communications and Information and Second Minister for Home Affairs Josephine Teo highlighted the growing presence of Singapore financial institutions in Chongqing and noted how greater financial cooperation and connectivity between Singapore, Chongqing, and ASEAN would have a positive effect on increasing trade flows and cross-border investments across the region.
MAS Managing Director Ravi Menon (“Mr Menon”) continued the theme of financial connectivity in his remarks noting that connectivity in financial markets as well as green and transition finance are important long-term imperatives for China and Singapore. Mr Menon suggested leveraging the China-Singapore (Chongqing) Connectivity Initiative (“CCI”) platform and Chongqing’s green financial reform and innovation pilot zone to incubate initiatives that could scale up green financial flows. In 2022, the CCI catalysed about US$6 billion in cross-border financing deals from the Western Region, bringing the total value of deals facilitated since the CCI’s inception in 2015 to over US$29 billion. Initiatives to catalyse green finance cooperation under the CCI were also discussed by the CCI Financial Sub-Committee Advisory Group.
There were 17 Memoranda of Understanding (“MOUs”) inked between Singapore and Chongqing corporates and financial institutions during the Summit, covering cooperation in a range of areas relating to cross-border financing, FinTech, and talent development. Annex A to the 20 April 2023 press release lists the MOUs.
Strengthen collaboration in green and transition finance
On 21 April 2023, MAS issued a press release announcing that it, together with the People’s Bank of China (“PBC”), had established the China-Singapore Green Finance Taskforce (“GFTF”), with the aim of deepening bilateral cooperation in green and transition finance and facilitating greater public-private sector collaboration to better meet Asia’s needs as it transitions to a low carbon future.
The GFTF is co-chaired by MAS’ Assistant Managing Director (Development and International) and Chief Sustainability Officer, Gillian Tan, and Chair of the China Green Finance Committee, Dr Ma Jun. Members comprise senior representatives and sustainable finance experts from financial institutions and green FinTech companies from Singapore and China.
At its inaugural meeting on 21 April 2023, the GFTF discussed joint initiatives aimed at scaling up green and transition financing flows between Singapore, China, and the region. The GFTF will establish three initial workstreams to focus on the following priority areas:
- Taxonomies and definitions: MAS and PBC will work together under the International Platform on Sustainable Finance (“IPSF”) to achieve interoperability between the Singapore and China taxonomies and will collaborate subsequently to enhance the use of the IPSF’s Common Ground Taxonomy, as well as deepen understanding of transition activities defined by China and Singapore.
- Products and instruments: Singapore Exchange and China International Capital Corporation will establish a workstream to strengthen sustainability bond market connectivity between China and Singapore, including the issuances of and mutual access to green and transition bond products in China and Singapore.
- Technology: Metaverse Green Exchange and Beijing Green Exchange will establish a workstream that leverages technology to facilitate sustainable finance adoption, including piloting of digital green bonds with carbon credits.
- MAS press release: Financial connectivity between Singapore and the Western Region of China strengthens amid global economic headwinds (20 April 2023)
- Annex A - List of Financial Sector MOUs
- Annex B - List of Members
- Speech by Minister Josephine Teo at the 5th Chongqing Connectivity Initiative Financial Summit
- “Chongqing-Singapore Co-operation in Green Finance” - Keynote Address by Mr Ravi Menon, Managing Director of Monetary Authority of Singapore, at the Singapore-China (Chongqing) Financial Summit on 20 April 2023
- MAS press release: Singapore and China establish Green Finance Taskforce to strengthen collaboration in green and transition finance (21 April 2023)