The initiatives include a commitment to upgrading the China-Singapore Free Trade Agreement and the launch of a dual government-led project to further develop the city of Chongqing in China’s western region, similar to the two existing Singapore-supported projects at Suzhou Industrial Park and the Sino-Singapore Tianjin Eco-city.
Guy Harvey-Samuel, Group General Manager and CEO for HSBC in Singapore said the announcements show the strong relationship between the two countries and a mutual desire for the relationship to evolve further.
“The China-Singapore Free Trade Agreement (CSTFA), which came into effect in January 2009, was the first comprehensive bilateral free trade agreement that China concluded with an Asian country, and has been instrumental in China becoming Singapore’s largest trade and investment partner since 20131.”
“Refinement to the China-Singapore FTA and the intention to establish a third dual-government city project will undoubtedly lead to a step change in the trade and investment flows between the two countries.”
Singapore-China economic relations have been growing over the past few years and are substantial today.
In 2014, Singapore was China’s largest foreign investor for the second consecutive year, with investments amounting to US$5.8 billion in over 700 projects, according to the Ministry of Trade and Industry. In turn, China was also Singapore’s largest trading partner last year, with bilateral trade in goods increasing by 5.4 per cent to S$121.5 billion2.
The announcement of a joint initiative between the Singapore and China governments to further develop Chongqinga, in Western China, demonstrates Singapore’s commitment to China’s One Belt, One Road programme. The initiative will be the third bilateral project between Singapore and China, following the Suzhou Industrial Park and the Sino-Singapore Tianjin Eco-city projects.
As part of the project, Chongqing has proposed a joint modern services demonstration zone, where Singapore firms can offer legal and accounting services, as well as an integrated logistics centre comprising an aviation and port logistics hub.
Mr Harvey-Samuel continued: “One Belt, One Road is a centrepiece of Beijing’s long-term economic policy and central to its goal of encouraging the further economic integration of participating countries and the formation of new regional economic trading and investment alliances.”
“Western China is geographically the beginning of the ‘belt’ and today’s announcement reinforces Singapore’s commitment and participation in the program.”