Channel NewsAsia

Shanmugam hails cross-border reminbi initiative for Suzhou Industrial Park

The new cross-border reminbi initiative for Suzhou Industrial Park is another Chinese experiment in the liberalisation of its currency, said Singapore Foreign Minister K Shanmugam.

SINGAPORE: The new cross-border reminbi initiative for Suzhou Industrial Park is another Chinese experiment in the liberalisation of its currency, said Singapore Foreign Minister K Shanmugam.

It is also a reflection of China's trust in Singapore as a financial centre.

Mr Shanmugam said this to reporters in Suzhou on the final day of his official visit to China.

This is Mr Shanmugam's first visit to Suzhou, home to an industrial park that's been a symbol of China-Singapore cooperation for the past 20 years.

About an hour by car from Shanghai, the park is now a modern township with a Central Business District of its own.

Mr Shanmugam called it a success, but there's more bilateral work in the pipeline.

He said: "The hardware is one part. Software is also important. Now we look at for example social governance, harmonious labour relations. Employees must feel a part of it, and they do, incomes here are higher than other parts. But they must feel they are getting the benefits. How do you have a good tripartite relationship between government, labour, and management? That's important."

He added that's where services like the Fangzhou Neighbourhood Centre come in.

Modelled after Singapore's community clubs and located in a shopping mall, it has childcare services, a clinic, and activity centres for young and old.

Mr Shanmugam's visit to Suzhou also comes one day after Singapore and China announced a new initiative to allow banks in Singapore to conduct cross-border renminbi lending to companies in the Suzhou Industrial Park.

He said: "China sees Singapore as a good place to have the renminbi clearance centre. Our rules are strict, they are tight, they know that we are very careful, therefore they trust us as a financial jurisdiction. China wants to be careful when it internationalises the renminbi, and rightly so.

“In that context, this is another experiment, but it's an experiment that will benefit Suzhou tremendously and Chinese companies tremendously because now they can raise capital, renminbi at a lower cost and deploy it and it will create jobs."

Ending his trip in Shanghai, Mr Shanmugam spoke at the opening of a United Overseas Bank branch in the Shanghai Free Trade Zone.

He said Singapore hopes to "play its part" in facilitating the internationalisation of the renminbi, and in the process, support China's economic reforms.

China named the Industrial and Commercial Bank of China as the renminbi clearing bank in Singapore about a year ago. Since then, yuan transactions in the Singapore have accelerated. The country is now the second largest clearing centre for RMB transactions outside of mainland China, behind Hong Kong.

Tweet Photos, Videos and Update on this Story to  #cna