According to the latest press release from Singapore stock exchange Limited (SGX) earlier today, Singapore based international banking giant United Overseas Bank Limited (UOB), SGX and China Chamber of International Commerce (CCOIC) have signed a memorandum of Understanding to help Chinese firms use Singapore as a launch pad to expand into ASEAN. The MOU was signed during the second Belt, and Road Forum held in Beijing, a move aimed at improving UOB’s existing collaboration with CCOIC to enable Chinese enterprises in their efforts to expand globally. Ahead of this tripartite alliance, UOB has already helped many Chinese companies expand into ASEAN with a press release stating a 50% increase in the number of companies helped by UOB during 2018 when compared to 2017.
The new deal facilitates more than 180,000 Chinese enterprises under CCOIC to make use of UOB’s banking expertise in ASEAN region and also gain access to SGX’s trusted capital market infrastructure and deep liquidity. The MOU mandates that each organisations should provide assistance and advisory services to companies venturing into ASEAN during their market entry with respective organisations field of speciality. This facilitates the Chinese companies to gain services in form of foreign exchange, trade settlements, project financing, liquidity management and derivative transactions while also ensuring that the companies are put in touch with other companies who could become potential business partners in ASEAN region. Mr. Yu Jianlong, Secretary General of CCOIC commented
“We are pleased to form an alliance with two of Singapore’s leading financial institutions – SGX and UOB – to help Chinese enterprises access the country’s established financial market and stable business environment as a gateway for their ASEAN expansion. Together, we will contribute to the strengthening of bilateral economic and trade relations and growing connectivity across the region.”
Moving forward, UOB, SGX & CCOIC are expected to co-operate through industry events and seminars to promote trade and investment between China and Singapore as part of the MOU to help more companies explore business possibilities and opportunities along the China-ASEAN business corridor. The deal enables Chinese enterprises to benefit from Singapore’s position as a global wealth management hub and overseas RMB centre by using their position in Singapore as a springboard in their venture to access growing markets in ASEAN region. Speaking of the MOU, Mr. Loh Boon Chye, CEO of SGX commented
“SGX is excited to partner UOB and CCOIC to support more Chinese enterprises looking to expand globally. SGX’s multi-asset fundraising, investment and risk management platforms, when placed together with UOB’s financial expertise and CCOIC’s extensive network in the Chinese business community, will add value to enterprises tapping on the growth opportunities led by China’s Belt and Road and environmental initiatives.”
Given the fact that support from UOB ahead of the tripartite alliance influenced a 31% increase in cross border business flows during 2018, the year ahead is likely to see further improvement in cross border business flows helping both economies flourish in their business ventures the year ahead.
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