MOU between UOB, SGX and Chinese business association to help Chinese firms expand into Asean

United Overseas Bank (UOB) and the Singapore Exchange signed a Memorandum of Understanding with the China Chamber of International Commerce on April 27, 2019.
United Overseas Bank (UOB) and the Singapore Exchange signed a Memorandum of Understanding with the China Chamber of International Commerce on April 27, 2019.PHOTOS: ST FILE, DESMOND WEE

BEIJING - Two Singapore firms have inked a deal with a Chinese business association to help Chinese companies wanting to expand to Singapore and beyond.

The memorandum of understanding (MOU) between United Overseas Bank (UOB), Singapore Exchange (SGX) and the China Chamber of International Commerce (CCOIC) was signed in Beijing on Saturday (27 April).

Minister for Trade and Industry Chan Chun Sing and the ministry's Senior Minister of State Koh Poh Koon witnessed the signing.

The deal was one of the agreements reached between representatives from Singapore and their Chinese partners in conjunction with the Belt and Road Forum, which ended on Saturday in the Chinese capital.

Under the MOU, over 180,000 Chinese enterprises under the CCOIC will be able to tap UOB's banking expertise and networks and SGX's capital market infrastructure to not only expand to Singapore but also use it as a launchpad into the rest of South-east Asia.

At a press briefing on Sunday, the head of UOB's foreign direct investment advisory, Mr Sam Cheong, noted that an increasing number of Chinese firms were choosing Singapore as their regional headquarters.

Mr Cheong said the bank helped more than 100 Chinese firms internationalise last year, about 50 per cent more than the year before.

"Singapore has very strong bilateral (trade and tax) agreements with many countries, we are a financial and arbitrage centre, and if you use Singapore as a platform, you can engage international markets a lot more efficiently," he said.

The bank has nine FDI centres across Asia which, among other things, link customers up with service providers such as accountants, legal advisers and government officials, and help them understand local regulations and practices, he added.

Such initiatives to help Chinese companies launch investments into third-countries has been one area of cooperation that the Singapore Government has been promoting with China.

Beijing has been keen to stress that the Belt and Road Initiative (BRI), which aims to create trade links from China across Asia, Africa and Europe, is a multilateral and inclusive initiative.

SGX's head of equities and fixed income, Mr Chew Sutat, also pointed out that Singapore is a big energy, commodities and forex trading hub, and CCOIC's members were either in the trade or traditional sectors.

"When these companies set up in Singapore, they need a banker, and they also use a lot of services that SGX provides," said Mr Chew.

CCOIC secretary-general Yu Jianlong said Singapore's financial market and stable business environment served as a gateway when Chinese enterprises expand into Asean, adding that the MOU would strengthen bilateral economic and trade relations.