Singapore and China expand cooperation in capital markets and green finance

The Monetary Authority of Singapore (MAS) announced significant new initiatives to expand and strengthen financial cooperation between Singapore and China on 29 December following the 17th Joint Council for Bilateral Cooperation (JCBC) between Singapore and China.

The Singapore Exchange (SGX) and Shenzhen Stock Exchange have signed a Memorandum of Understanding (MoU) to establish an Exchange Traded Funds (ETF) Product Link – ‘ETF Connect’ – to enable eligible fund managers to offer ETF products to investors in each other’s markets.

The SGX and China Foreign Exchange Trade System (CFETS) are also in discussions to establish connectivity between their bond trading platforms, which will enable greater investor access to China’s bond market.

Asia Pacific Futures (APF) has become the first Singapore firm to be recognised as an Overseas Special Brokerage Participant (OSBP) of the Shanghai International Energy Exchange (INE). This will allow Singapore-based investors to trade internationalised onshore commodity products directly through APF, facilitating international participation and price discovery in China’s commodity derivatives markets.

Finally, MAS and the People’s Bank of China (PBC) have agreed to explore deeper public-private sector collaboration in green finance, particularly in key areas, such as taxonomies and green FinTech. Clearer definitions for classifying economic activities will help catalyse greater financing flows to green and transition projects in Asia.

“Strong financial cooperation between China and Singapore has supported greater trade and financial flows between China and ASEAN,” said Leong Sing Chiong, MAS Deputy Managing Director (Markets and Development).

“The new capital market and green finance initiatives announced today will create significant opportunities for us to forge new channels of financial connectivity and integration to support sustainable and inclusive growth for both China and Singapore.”

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