Business / Markets

Tianjin Eco-city plans cross-border yuan deals

By Bao Wanxian in Tianjin and Jiang Xueqing in Beijing (China Daily) Updated: 2014-07-10 07:16

Tianjin will launch a pilot program for companies and individuals in the Sino-Singapore Tianjin Eco-city to conduct cross-border yuan transactions with Singapore, Tianjin Vice-Mayor Zong Guoying told a news conference on Wednesday.

The program, approved by the People's Bank of China, will allow firm registered in the region to obtain yuan-denominated loans from banks in Singapore and issue yuan-denominated bonds in that country.

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It will also allow equity investment funds that have been set up in the eco-city to make overseas investments in yuan within the Association of Southeast Asian Nations.

According to the PBOC, individuals there can conduct cross-border yuan settlement services using current accounts and make foreign direct investments with their personal financial assets.

Tianjin will also explore the negative list management model by banning cross-border yuan loans for energy-intensive, highly polluting industries, overcapacity industries, certain financing platforms and the real estate sector.

More than 10 companies registered in the eco-city signed letters of intent with six Singapore-based banks on Wednesday for a total of 800 million yuan ($129 million) of yuan-denominated loans.

Also, M-Star (Tianjin) Animation Films and Media Co Ltd, registered in the Tianjin Eco-city in 2009, signed a cooperation agreement with Bank of China Ltd's Singapore branch. The company will explore diversified developing models in China and Singapore under the cross-border yuan initiative, said Chairman Wu Weimin.

The Tianjin Eco-city, launched in 2007, is a joint project of the Chinese and Singaporean governments that aims to develop a template for environmentally friendly cities.

Singapore's Senior Minister of State for Trade & Industry and National Development, Lee Yi Shyan, said the two countries enjoy strong cooperation in many fields.

"Financial services are an important area for cooperation, which will be further enhanced as the cross-border yuan initiative is implemented. More Singaporean investors can tap into the growth of companies located in the eco-city," Lee said.

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