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Introduction
1. 各位领导与参会嘉宾，下 午 好。
我谨代表新 加 坡 交 易 所，
感谢外滩金 融峰会主办方，
给我们这个 机 会 与 各位见面，
以 及 就上 海 金 融 中 心 的国际化进程，
还有同新 加 坡 的 合 作，进行交流。
2. Distinguished guests, ladies and gentlemen, a very good afternoon. Thank you to the Bund Summit organisers for giving me the opportunity to be here, albeit virtually, to share our thoughts on Singapore and Shanghai’s financial cooperation.
China’s internationalisation and SGX’s role
3. I’m sure everyone here will agree that China has made significant progress in internationalisation over the recent decades. With international participation and interest in China rising, China’s role within international financial markets is increasingly important.
4. Singapore and Shanghai are both major financial hubs in the region, with complementary strengths, and the potential to unlock tremendous synergies together. We have the potential to form an enduring partnership that can define the future of both financial markets, its connectivity and infrastructure.
5. To this end, I am glad that Singapore Exchange has played a role in China’s financial internationalisation, through our multi-asset platform, across equities, fixed income, currencies and commodities.
6. As a starting point, Singapore as a global offshore RMB centre, continues to deepen RMB liquidity to meet Asia’s growing demand for the currency. This is in line with the Chinese government’s commitment to expand cross-border usage and two-way flows of the RMB, to support real economic activities.
7. As the world’s largest and fastest-growing Asian FX futures exchange, SGX offers a liquid venue for RMB derivatives, supporting RMB’s internationalisation.
8. On the fixed income front, we also see ourselves increasingly supporting the internationalisation of China’s bond market. SGX is Asia’s most international bond listing venue. Today, about 15% of bond issuers on SGX comes from Greater China. Notably, we welcomed the listing of six China Development Bank’s domestic bonds last year, marking the first time China onshore RMB bonds were listed on SGX.
9. The further opening up of China's bond markets to global investors is leading to greater demand for complementary China access and risk management solutions. The China bond ETFs that are listed on SGX today are well-placed to serve this need.
10. As South East Asia is a fast growing market with huge opportunities, many Chinese enterprises looking to expand into this region have also come to SGX to raise growth capital, some of them for Belt and Road (BRI) projects.
Benefits in connectivity is two-directional – outbound provides diversification benefits
11. The common facet in all these collaboration is that financial connectivity is beneficial in more ways than one. Financial centres play a critical role in capital formation, asset management, as well as risk management. A vibrant and effective financial hub will boost the economic development of all markets that participate.
12. A connected and well-functioning capital market offers companies access to funding, and accelerates industrial, infrastructure and economic growth. For investors, the availability of financial instruments to grow their savings and wealth will also have multiplier effects on the growth of an economy.
13. To achieve these, partnership is key, and it can come in the form of bilateral or multilateral collaborations.
Partnerships is key – bilateral/multilateral
14. In 2018, SGX entered into a strategic cooperation agreement with Bank of China Limited (BOC) and China Foreign Exchange Trade System & National Interbank Funding Centre (CFETS), to jointly promote CFETS-BOC Traded Bond Index and its sub-indices outside of China to international investors, and explore the feasibility of channelling investments based on the Bond Indices. Last year, SGX signed an MOU with China Central Depository and Clearing Co. Ltd (CCDC), to boost cross-border connectivity and facilitate mutual investor access.
15. Since then, we welcomed the listing of the first ETF linked to CCDC’s ChinaBond indices, and the world's largest pure Chinese government bond ETF managed by CSOP Asset Management.
16. With the upcoming FTSE World Government Bond Index (WGBI) inclusion of China bonds from later this month, the Chinese government bond ETF listed on SGX would play a complementary role in helping foreign investors access opportunities in China's onshore bond markets, in an easy and efficient manner. This is an example of how a bilateral partnership increases investment opportunities for international investors.
17. Another important area of partnership between Singapore and Shanghai is on upholding financial stability. SGX has been a key partner and supports Shanghai’s initiative to form the CCP12 office in 2017, contributing actively in its international efforts to promote effective, practical, and appropriate risk management and operational standards for central counterparties or clearing houses.
18. In June 2020, Ms Agnes Koh, our Chief Risk Officer, was elected as Vice Chair of the CCP12 association, having been an active EXCO member since 2015.
19. One of the key CCP12 initiatives that SGX contributed to, was the publication of the CCP12 Public Quantitative Disclosure (PQD) Template, which has achieved the “Shanghai Standard”.
20. This template provides a global harmonised approach on public quantitative disclosure standards, and it has been adopted by 45 central counterparties across the globe. This is another prime example of how a multilateral partnership can benefit the global financial community.
21. As a continuing effort, SGX will continue to collaborate with the CCP12 Association in pushing for further alignment and harmonisation of standards across the industry.
Areas to deepen financial cooperation
22. As Shanghai forges ahead to entrench its role as an international financial centre, I firmly believe that closer connectivity will bring mutual benefits for all. Beyond mutual capital flows, we can expand our partnership scope to address two key global issue and trend – sustainability and financial innovation.
23. With climate change being a pressing issue for governments and businesses alike, Singapore and Shanghai can harness the power of finance to power a more sustainable economy.
24. As a leading Green Bond listing venue in Asia, there are ways for Singapore and China to jointly promote green investments aligned with international standards and disclosures.
25. Financial innovation is another key growth area. As part of China's 14th Five-Year Plan, Shanghai aims to establish itself as a fintech hub. Likewise, in Singapore, we have a thriving tech and start-up ecosystem backed by supportive policies, human capital, global connections, and a strong infrastructure network. SGX also has a keen interest in digital transformation and this is certainly an area for further collaboration.
Conclusion
26. To conclude, as Shanghai continues its path to become an international financial centre, we stand ready to partner with you to accelerate this movement. Thank you.
