Document 6573156

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TUESDAY, OCTOBER 28, 2014
S’pore, China
launch direct
trading of
currencies
Move set to lower cost of doing
business and boost trade links
By ESTHER TEO
CHINA CORRESPONDENT
IN SUZHOU
SINGAPORE and China will start
direct currency trading today, in a
move set to lower the cost of doing business. It will also boost the
already strong trade links between the two as Beijing pushes
to internationalise the yuan.
Chinese Vice-Premier Zhang
Gaoli announced the move yesterday at a high-level bilateral meeting in eastern Suzhou that he
co-chaired with Singapore Deputy Prime Minister Teo Chee Hean.
Mr Teo indicated that direct
currency trading could be a
game-changer.
“This is a very major and
significant development. I still
remember my first visit to China
30 years ago. The currency was
not even unified then and we had
foreign exchange certificates.
(The yuan) was not tradable at
all,” Mr Teo told reporters.
“But today, we have direct trading between the (yuan) and the
Singdollar... It will reduce the
cost of doing business and make it
more convenient,” he added.
Before this, companies that
wanted to convert large amounts
of the Singapore dollar to yuan, or
vice versa, had to do so via an intermediate currency.
Last year, bilateral trade rose 11
per cent year on year to reach
$115.2 billion. Singapore is China’s
largest foreign investor with
US$7.3 billion (S$9.3 billion)
worth of investments last year,
while China is Singapore’s largest
trading partner.
Yesterday, the Monetary Authority of Singapore also said it
has proposed to allow China-incorporated financial institutions
to issue yuan-denominated debt
Jokowi starts off
on a stern note
INDONESIAN President
Joko Widodo swore in
his Cabinet yesterday,
notifying his ministers
that they are to work for
his vision and mission
and that they must not
be caught up in their
own sectoral interests.
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Anti-protest group
seeks support
MR ROBERT Chow
(below), who leads a
group bent on ending
the road blockades by
students in Hong Kong,
has got his supporters to
collect signatures
from people who
oppose the protest.
L TOP OF THE
NEWS A6
PHOTO: AGENCE FRANCE-PRESSE
GOODBYE,
AFGHANISTAN
A FLEET of planes and helicopters airlifted
the last American and British forces from a
key base in southern Afghanistan’s Helmand
province yesterday, a day after the Nato
coalition closed the massive facility and
handed it over to the Afghan military.
The withdrawal came 13 years after a
US-led invasion launched a long and costly
war against the Taleban.
With the withdrawal, Afghanistan’s army
and police will take over the fight against the
resurgent Taleban militants.
$45m for projects to energise power industry
By FENG ZENGKUN
ENVIRONMENT CORRESPONDENT
SINGAPORE has set aside $45
million to boost its power systems and industry, and will also
create the Singapore Institute of
Power and Gas to train people.
In addition, more consumers
will, from next July, be able to
buy electricity from retailers of
their choice or the wholesale market, instead of having to buy electricity from SP Services at the
regulated tariff.
These initiatives were among
the projects announced by Minister in the Prime Minister’s Office
S. Iswaran at yesterday’s opening
of the annual Singapore International Energy Week.
The five-day event at the Marina Bay Sands Expo and Convention Centre is a platform for professionals, policymakers and commentators to discuss issues.
Mr Iswaran, who is also Second Minister for Home Affairs
and Trade and Industry, said the
new measures were to “diversify
our energy sources, foster greater competition in the electricity
market, and reduce costs and enhance flexibility for businesses”.
The Energy Market Authority
(EMA) will use the $45 million in
two projects. The $20 million Energy Training Fund is to train Singaporeans to be technical professionals for the power sector.
Mr Quek Poh Huat, energy utility provider Singapore Power’s
senior adviser, said the fund “addresses the impending shortage
of technical professionals due to
an ageing workforce”.
The EMA set up the Power Sector Manpower Task Force in
2012, which Mr Quek chaired, to
resolve manpower issues.
It said last year that the power
sector’s employees had a median
age of 48, and the sector would
need 2,400 more technical profes-
sionals in the next decade.
To help the manpower efforts,
Singapore Power will also set up
the Singapore Institute of Power
and Gas to provide courses,
which will be launched next year.
The other $25 million will be
used in a new Energy Storage Programme to fund research and development, as well as test beds,
to improve the Singapore power
system’s stability and resilience.
Currently, only commercial
and industrial electricity consumers who use at least 4,000kWh
on average every month can
choose whom to buy electricity
from. Everyone else has to buy
electricity from SP Services at a
regulated tariff.
From next July, the threshold
will be lowered to 2,000kWh.
About 10,000 consumers will
become eligible with the lower
threshold, adding to the current
pool of 23,000.
“Our goal is to progressively
liberalise the electricity market
so that all remaining 1.3 million
consumers, from households to
businesses, will...have more
choice and options to manage
their energy cost,” said Mr
Iswaran.
[email protected]
L SEE TOP OF THE NEWS A8
instruments in Singapore directly.
This will help to diversify
long-term funding for Chinese financial institutions by allowing
them to tap the global institutional investor base in Singapore, it
added in a statement.
Amid reforms to internationalise its currency, China has
launched direct trading with several currencies: the euro, the British
pound, the Japanese yen and the
New Zealand dollar.
Direct trading was one of the
key outcomes at last year’s Joint
Council for Bilateral Cooperation
(JCBC) meeting in Singapore. But
no official start date was given
then.
Mr Teo is on a three-day trip
that kicked off on Sunday in conjunction with the 20th anniversary of the Suzhou Industrial Park
(SIP) and the 11th JCBC.
He said a proposed third government-to-government project
in China’s western region was discussed, with the aim of reaching a
conclusion in “concept, location
and some programmes” by next
year.
The SIP and Tianjin Eco-City,
two government-to-government
projects launched in 1994 and
2008 respectively, have played
key roles in earning Singapore the
title of the largest and busiest
yuan centre outside of China.
Companies in both parks, for
instance, can take yuan loans
from banks in Singapore. Loans of
almost two billion yuan (S$417
million) have already been made
since the initiatives started three
months ago, according to MAS.
Yesterday, leaders from both
sides stressed the need to come
up with innovative ways to keep
the parks relevant to China’s development stage.
“We hope to see some of these
projects that we’ve been discussing reach a good point next year
to help us mark the 25th anniversary of diplomatic ties between China and Singapore in a significant
way,” Mr Teo added.
Singapore is also working with
Beijing on a wide range of issues,
with five memorandums of understanding inked yesterday.
They include cooperation on environmental issues, exchange programmes for officials, intellectual
property and a framework agreement for the National University
of Singapore to expand its presence in the SIP.
[email protected]
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