payments and international reserves. progress in rmb internationalisation will ultimately depend on getting right the sequencing of domestic economic and financial reforms. a strong and stable domestic financial system is a prerequisite for further capital account liberalisation and currency internationalisation. china - singapore financial connectivity : the journey so far singapore ’ s financial linkages with china have grown strongly over the years, particularly since the appointment of icbc as singapore ’ s rmb clearing bank in february 2013. • the offshore rmb market in singapore has expanded, with a wide offering of rmb products, including deposits, bonds, derivatives, mutual funds, and trade financing. • china and singapore have set up cross - border rmb arrangements for suzhou, tianjin and chongqing, enabling corporates in these areas to borrow from singaporebased financial institutions as well as repatriate proceeds from bonds issued in singapore. bis central bankers ’ speeches but china comes to singapore not only to do business in singapore. it is to use singapore as a launch - pad to do business in southeast asia. in recent years, chinese corporates and financial institutions have been rapidly growing their operations and investments in southeast asia. singapore offers an effective gateway for their expansion into the region. • there are some 6, 500 chinese companies in singapore. • many of them, such as lenovo, have set up regional finance and treasury centres here to take advantage of singapore ’ s banking and capital markets to finance their regional expansion. • the seven chinese banks in singapore are also expanding their presence here to provide funding support for the activities of chinese and regional corporates. singapore - based financial institutions have extensive networks in the individual asean countries and, have proven to be trusted partners for chinese entities venturing abroad. • a recent example is china minsheng investment corporation, one of the largest private investment firms in china, which set up an office in singapore with the mandate to invest in companies in south - east asia and north america. one of its first projects is the construction of an industrial park in indonesia. • other chinese companies, such as baosteel, new hope and huaneng, have invested in vietnam and the region through their singapore subsidiaries, with financing support from local banks like dbs. china - singapore financial connectivity : the next chapter the next chapter in china - singapore financial partnership will go beyond co - operation on rmb business and the use of singapore as an asian gateway. it will be a more broad - based financial partnership that will provide

deeper support to china ’ s growing connectivity with southeast asia. let me cite four concrete areas of partnership. • capital management • risk management • infrastructure financing • asset management capital management chinese enterprises have mostly relied on domestic sources of funds such as bank lending to finance their international expansion. many chinese companies have also listed in equity markets in the us, hong kong and singapore. but as chinese companies grow their global presence, they will have to think harder about how best to raise capital and how best to make use of their capital by tapping into offshore markets. first, bond markets offer a useful alternative to bank lending, especially for long - term funding. deep capital markets, anchored by a large institutional investor base can help well - rated businesses to achieve efficient cost of funding. chinese companies are becoming more active in singapore ’ s bond market. • for instance, china oilfields services limited successfully raised us $ 1 billion in singapore last year, including a 10 - year medium - term note of us $ 500 million. second, chinese corporates with income - producing real estate and infrastructure assets could recycle their capital by securitising these assets through a trust vehicle. bis central bankers ’ speeches • sgx saw its first china real estate investment trust or reit last year, with beijing hualian group raising close to s $ 400m through a reit. similarly, chinese banks can use loan securitisation to recycle bank capital and re - channel the funds to real economic activities back home. • icbc ’ s opening of its asia pacific shipping finance centre is a good example of this. • the centre will help icbc singapore securitise its shipping and related loans originated in the asia pacific, by tapping the singapore bond market. risk management as chinese corporates continue to venture abroad in asia, they will confront a variety of risks. these risks need to be managed well. first, there are the usual foreign exchange and interest rate risks. • as the largest fx market in the asia pacific, singapore offers chinese corporates effective fx hedging solutions to manage their risk exposures. • the singapore exchange has a strong suite of fx futures contracts, including asian currencies, and the take - up rate has been strong. • many corporate treasurers have chosen singapore for their regional treasury centres covering southeast asia, and even the greater china region. second, some of the investments by chinese corporates could be in locations that are vulnerable to natural disasters. • investors would need