The new Singapore-China government-led project in Chongqing will aim to become a demonstration of modern connectivity and services in China's vast western region.
The four priority areas of collaboration are in financial services, aviation, transport and logistics, and information and communications technology.
The signing of the agreements took place at the Istana and was witnessed by Prime Minister Lee Hsien Loong and Chinese President Xi Jinping yesterday. This third government-to-government project will be officially known as the "China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity". Chongqing, with a population of 33 million, beat Chengdu and Xi'an to secure the project.
The Ministry of Trade and Industry (MTI) said yesterday that as the project aims to develop a "network effect" in strengthening connectivity within and beyond China, collaborations with other western cities will be considered in the future.
The project will also serve as a linchpin of China's regional strategies, such as the "One Belt, One Road" initiative to boost trade and investment along the overland Silk Road Economic Belt and the 21st Century Maritime Silk Road connecting China with South-east Asia, Africa and Europe. "As an important growth pillar of the 'One Belt, One Road' initiative, Chongqing is well-positioned as a base to pilot innovative measures arising from China's comprehensive deepening of reforms and to drive the development of western China," said MTI.
Labour chief Chan Chun Sing, who heads the joint ministerial committee on the project with Chinese Commerce Minister Gao Hucheng, said that it "reflects our mutual commitment to take bilateral relations to a higher level".
"Given western China's strong potential for development in modern connectivity and modern services, this is an opportunity for Singapore companies to share their expertise and expand their presence in China," he added.
Singapore banks welcomed the project, which they say is likely to spur further investment flows. All three local banks have branches in Chongqing, with OCBC being the first to set up shop there in 2009.
Mr Benjamin Quek, OCBC's head of China business office, called it a boon for regional customers interested in investing in Chongqing and for Singapore banks to provide them with the necessary support, especially opportunities arising from the "One Belt, One Road" initiative.
DBS Bank said that, since its Chongqing branch opened in 2012, it has helped many Chinese multinationals expand outside China, and also linked foreign firms with opportunities in the Chinese city.
As for Singapore companies, they have invested a total of nearly US$5 billion (S$7 billion) as at the end of last year. Of this, US$580 million was pumped in last year, according to IE Singapore.