A Strong Foundation for Shanghai – Singapore Partnership 5 Over the years, China and Singapore have developed a strong bilateral relationship. Trade and economic ties are robust and strong. This is a firm foundation for the Shanghai – Singapore relationship to grow from strength to strength: In 2015, Sino-Singapore bilateral trade rose 1.6% year-on-year to SGD 123.5 billion or about USD 90 billion. For the third consecutive year, China was Singapore’s largest trading partner. Singapore was China’s 3rd largest trading partner in ASEAN 1. During the same period, Shanghai – Singapore bilateral trade saw steady growth to reach almost USD 13 billion. In 2015, Singapore’s investments into China amounted to about USD 7 billion, an increase of 18.5% from 2014. For the third consecutive year, Singapore was China’s largest foreign investor2. Singapore was China’s 5th largest investment destination. Singapore’s actual investments into Shanghai expanded an impressive 160% year-on-year to reach USD 2.2 billion in 2015. 6 In particular, financial cooperation between both countries has thrived. In September this year, President Xi Jinping met PM Lee Hsien Loong at the side-lines of the G20 meetings in Hangzhou. Both leaders noted the positive progress achieved in the latest government-togovernment (G-to-G) project in Chongqing. Financial cooperation was highlighted as an area that has made strong headway. China and Singapore also achieved several new financial cooperation milestones in 2016.

These initiatives demonstrate that Shanghai is a role model in pioneering financial innovation in China. 12 Going forward, I see strong potential for Shanghai and Singapore to synergize and collaborate in a few areas:  (i) Collaborating with Shanghai Authorities on Free Trade Zone and/or Pilot Financial Policies During their meeting in Hangzhou, President Xi remarked to Prime Minister Lee that Singapore could play “a useful role” in China’s newly announced FTZs. Singapore could also be a strategic partner to pilot financial policies implemented in the Shanghai FTZ. As a key offshore RMB centre, Singapore has always been supportive of China’s financial liberalisation and internationalisation policies. Singapore financial institutions are keen to work with Shanghai authorities and financial institutions. Their deep international and ASEAN experiences could contribute to effective calibration of the pilot schemes. Some good examples of Singapore’s involvement in implementing pilots include the following: In February 2014, shortly after PBOC announced its support for more cross-border RMB transactions in the Shanghai FTZ, ICBC Singapore made two cross-border RMB loans to firms based here in the Shanghai FTZ. In October 2015, DBS China was among the first batch of banks selected to participate in the Shanghai-based Cross-Border International Payment System (CIPS). Beyond banking, Singapore capital market players can also work with Shanghai authorities to pilot financial policies related to the asset management and securities sectors. (ii) Belt-and-Road Partnerships China’s Belt-and-Road Initiative (BRI) offers another important area of collaboration between Shanghai and Singapore. This will also contribute to the fulfilment of China’s national objectives.