Commenting on the upgrade, HSBC Singapore CEO, Tony Cripps, said: “Against the backdrop of an increasingly protectionist world, the improved FTA is a welcome ‘shot in the arm’ for trade and investment which will pique the interest of businesses on both sides.”
The upgraded FTA provides the following benefits to Singapore businesses:
- More products in the petrochemical sector will qualify for preferential customs treatment (Petrochemical products account for 28% of Singapore’s total exports to China in 2018.)
- Singapore construction companies will now be able to undertake joint construction projects across entire provinces of Shanghai, Suzhou, Tianjin, and Chongqing and be exempted from China's foreign investment ratio requirement.
- Singapore shipping companies will be able to maintain majority ownership and form wholly-owned foreign enterprises in the major port cities of Shanghai, Guangdong, Tianjin and Fujian.
- Singapore law firms with offices in the Shanghai Free Trade Zone (FTZ) can form commercial associations with Chinese law firms and offer domestic and international legal services to clients anywhere in China.
- Smoother customs procedures including the release of all goods within 48 hours of arrival and the release of express shipments within six hours.
The FTA also brings joint agreement across several areas:
- Strengthened cooperation with regards to the Belt and Road Initiative (BRI) through infrastructure connectivity, financial connectivity and third-party cooperation.
- Promote economic and trade development with an emphasis on environmental protection and sustainable development.
- Facilitate e-commerce for business and improved commitments in online consumer and personal information protection.
Mr Cripps continued: “Increasingly, Asia is looking within the region for growth. Within the China and Singapore business corridor specifically, we see tremendous opportunity across many sectors including the digital economy and e-commerce, sustainable infrastructure development and supply chains. Whilst these reflect ongoing trends, the FTA will accelerate this connectivity.”
The FTA will enhance the already strong Sino-China economic ties.
Across infrastructure and BRI, Singapore can help China with its commitment to transparent and sustainable development projects through increased access to Singapore’s infrastructure agencies, policy frameworks and associations. It can also help Chinese companies tap new-economy opportunities through initiatives like the Singapore-led ASEAN Smart City Network. Conversely, the increased access to China’s burgeoning consumer market will provide Singapore businesses with an edge over international competitors.
The original CSFTA entered into force on 1 January 2009. In 2018, total bilateral trade between Singapore and China reached S$135 billion. In 2017, Singapore’s cumulative investment in China amounted to S$140 billion while China’s cumulative investment in Singapore amounted to S$36.3 billion1.