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Singapore to have more access to China’s service industries

Today, Singapore

Singapore to have more access to China’s service industries

28 July 2011

by Valarie Tan

SINGAPORE - China is key to Singapore diversifying its risks in an uncertain global economy, and that is why the Republic also supports China’s intention to promote the use of the yuan in the global market, said Deputy Prime Minister Teo Chee Hean yesterday.

A flurry of meetings and activities took place yesterday to enhance trade and cooperation between the two countries, including the signing of a protocol to amend the 2009 Free Trade Agreement (FTA) to allow tariff concessions for Singapore-based companies.

Other changes - which will take effect in October - will also allow Singapore access to more of China’s services industries ahead of other ASEAN nations.

According to a statement from Singapore’s Ministry of Trade and Industry (MTI), Singapore-based companies will "find it easier" to provide urban and suburban transportation services and training programmes in fields such as beauty treatment and cooking in China.

Trade and Industry Minister Lim Hng Kiang said: "The greatest challenge our companies face is always behind-the-border issues ... how to qualify through the various certificates of origins, all the non-tariff barriers ... so we need to constantly review the FTA and make changes to it."

The Monetary Authority of Singapore (MAS) also signed a Memorandum of Understanding with the China Banking Regulatory Commission. MAS said in a statement that, following the recent global financial crisis, there is recognition of the need for greater international cooperation to manage crises.

Speaking to reporters after co-chairing a series of bilateral meetings with Chinese Vice-Premier Wang Qishan, Mr Teo said: "Singapore companies and Singapore as a whole will be able to tap more freely into the Chinese market, as well as our more traditional markets in developed economies."

Mr Teo added that, given the volatility of the markets, conducting the growing trade between ASEAN and China in renminbi will "remove some of the uncertainties and the currency risk".

Mr Teo said: "So we support the move by China. We continue to have discussions with China on how best we can help facilitate this and the discussions are in advanced stages right now."


Meanwhile, the two countries’ flagship cooperation project Suzhou-Industrial Park (SIP) - now in its 17th year - saw its economic output grow 25 per cent last year to reach 133 billion yuan (S$24.8 billion), while external trade grew 44 per cent to reach US$73.8 billion (S$88.8 billion).

Investment into the SIP also reached US$1.85 billion.

Mr Teo noted that the project was "moving into a new phase".

Said Mr Teo: "It is facing the same kind of challenges that Singapore is facing, which is to move up to higher-value industries, and it is also expanding its scope by working together with the neighbouring municipality in Nantong to spread that experience."

Suzhou Governor Yan Li said: "We aim to refine and further develop the policies relating to equity investment firms in the Suzhou Industrial Park. As we all know, while equity investment has made progress in China, there is still room for improvement."

But SIP’s plans to list on the Shanghai Stock Exchange this year have been postponed to possibly next year.

Mr Ma Ming Long, Standing Member of the Communist Party of China Suzhou Municipal Committee, noted that the timing was not right: "The Central Government has got tight restrictions on the property market, and we are concerned that it may result in some misunderstanding by external parties."

Last year, the park attracted 500 new projects from emerging industries, including nanotechnology and environmental protection. High-tech industries account for 60 per cent of manufacturing production in the park.

Separately, Vice-Premier Wang yesterday also met Singapore’s Prime Minister Lee Hsien Loong, former Minister Mentor Lee Kuan Yew, and Emeritus Senior Minister Goh Chok Tong.