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Speech by Mr Heng Swee Keat, Minister for Finance, at China Construction Bank Singapore’s 20th Anniversary, 14 Sep 2018, at the Sofitel Singapore City Centre

14 Sep 2018

Mr Hong Xiaoyong
Ambassador of the People’s Republic of China to the Republic of Singapore

Mr Tian Guoli
Chairman of China Construction Bank

Distinguished guests

Ladies and gentlemen

1.     大家下午好。很高兴受邀出席今天的庆典,借此机会,恭贺中国建设银行新加坡分行成立二十周年,也热烈地欢迎中国建设银行董事长田国立先生和团队到访新加坡。

2.     Today, CCB is ranked the second largest bank in the world, in terms of Tier-One capital and assets, with presence in 29 countries and cities including Singapore.  It has indeed come a long way since its inception in 1954, when it was known as the People’s Construction Bank of China and was responsible for funding numerous construction and key infrastructure projects under China’s state economic plan.

CCB Operations in Singapore

3.     CCB Singapore started its operations in 1998 during the Asian financial crisis when many other financial institutions avoided the region. CCB had the foresight and looked beyond the crisis to position itself for the recovery. Over the years, CCB Singapore has grown steadily, supporting China’s policy reforms and initiatives from Singapore.

4.     From its beginnings as a small wholesale bank branch, CCB Singapore’s range of services has grown and now includes corporate lending, trade finance, debt securities investment, and treasury targeting corporates and financial institutions.  Last year, the bank opened two head office level centres offering Infrastructure Financing Services and Private Banking. China Construction Bank International (“CCBI”), CCB’s investment services subsidiary also opened its Singapore branch to offer fund management and securities trading services.

Singapore-China Relations

5.     As we celebrate CCB Singapore’s 20th anniversary, it is also an occasion to reflect upon Singapore’s long and deep ties with China. Since China’s 改革开放 (reform efforts and opening up policy) 40 years ago, it has steadily opened up its economy and achieved remarkable progress. Throughout China’s transformation journey, Singapore and China’s friendship has also grown. The long-standing bilateral ties date back to the time of Mr Deng Xiaoping and Mr Lee Kuan Yew, which laid the foundation for the special relationship that has developed since then. 

6.     Singapore and China enjoy strong bilateral economic relations. In 2017, when China was already Singapore’s largest trading partner, bilateral trade volumes increased further by 17% y-o-y to S$137.1 billion. Singapore has also been China’s largest foreign investor for 5 consecutive years.

·     In terms of merchandise trade, China’s share of Singapore’s domestic exports and re-exports rose from 8.5% and 8.7% in 2005, to 15.3% and 13.6% in 2017 respectively, as China became the central node for Asia’s manufacturing production networks.

·     As for services trade, Chinese consumers’ appetite for travel and leisure had benefited the regional’s tourism sectors significantly. Singapore’s tourism industry had been driven by strong growth in tourists and spending from China over the last decade, with China’s share of total visitors here rising from 10% in 2005 to 18.5% in 2017.

7.     Indeed, Singapore’s long-standing cooperation with China has evolved as both countries’ developmental priorities and capabilities changed over the years. Our three G-to-G projects, the Suzhou Industrial Park, Tianjin Eco-City and China-Singapore (Chongqing) Connectivity Initiative demonstrate our commitment to cooperate further and innovate.

8.     Singapore and China are in the midst of negotiating the upgrade of the bilateral Free Trade Agreement (FTA). The successful conclusion of the FTA will deepen collaborations and broaden market access between the two countries. Beyond the clear bilateral gains, this agreement will substantively contribute to and benefit from the bedrock of deepening economic and financial relationships in a most dynamic region in the world.

Supporting Asia’s Growth

9.     The economic centre of gravity is indeed shifting back to Asia, with rising household incomes and wealth, a new wave of dynamic Asian entrepreneurship and growing infrastructure demands. Based on IMF’s projections, Asia will remain the fastest growing region in the world over the next five years, with GDP growth at an average rate of about 6.4% per annum from now till 2023.

10.   The IMF expects China’s economy to grow at about 6% per annum, generating an average of US$457 billion each year to global incomes. The ASEAN-5 countries, with a combined GDP of US$1.56 trillion and a population of more than 600 million, are expected to grow by about 5% per annum. Based on current growth rates, ASEAN is expected to become the fourth largest single market by 2030, behind the EU, China and US.

11.   The future of China-ASEAN economic ties rests on a strong foundation of existing production and trade networks which were brought about by multinationals since the 2000s to facilitate efficient production arrangements. From negligible linkages two decades ago, China as a trading partner accounted for 14% of the ASEAN-5’s exports and one-fifth of its imports last year. So this is a very significant change. Building on these foundations, our interlinkages will not only deepen, but increasingly diversify from trade to also include financing, tourism and other cross-border exchanges.    

12.   Singapore is well-positioned to support the region’s development in partnership with financial institutions like CCB. Let me highlight three areas where Singapore and China can collaborate and support the region’s growth.

Enterprise Financing

13.   First, in supporting the needs of growing Asian companies. The share of Asian companies with market value of more than US$10 billion stands at 30%, compared to 20% just ten years ago. Based on Nikkei’s Asia300, more than one-quarter of the fastest growing companies in Asia come from China.

14.      As a leading financial centre, with a wide range of financial institutions and a deep liquid bond market, Singapore offers a strong base to serve the capital raising needs of Asian enterprises. The capital raising needs are growing as Asian enterprises seek to expand their regional and global footprint.  Similarly, Chinese enterprises are internationalising under China’s走出去战略 (“going out” strategy).

15.      Singapore’s bond market has grown at a compound annual growth rate of around 9% over the last five years to reach US$243 billion. Enterprises – local and foreign – are able to raise SGD and foreign currency bonds depending on their needs, and tap on the diversified investor base in Singapore, including fund managers, insurance companies and private banks.

·     Our vibrant bond market has drawn repeat issuers and attracted first time issuers. First-time issuances nearly tripled to S$27.4 billion last year.

·     One of the first time issuers was China’s Haier Group which launched a US$1 billion perpetual debt security where CCB served as a joint lead manager and book runner.

Infrastructure Financing

16. So the first area is about serving the capital need of enterprises. Let me touch on the second area, which is supporting infrastructure financing needs. The ADB estimates that to maintain Asia’s growth momentum, investments of US$1.7 trillion per year till 2030 is needed.

17.   The Belt and Road Initiative (BRI) is a positive initiative with very high potential to enhance connectivity and accelerate infrastructure development across Asia. It opens up new frontiers of connectivity, promotes new areas of cooperation, as well as deepening external linkages among countries along BRI to advance the lives of our people.

18.   Singapore has been an early supporter of the BRI. Nearly one-third of China’s total outbound investments to BRI countries flow through Singapore; while Singapore’s investments into China also account for 85% of total inbound investments from BRI countries.

19.      We have been working closely with China on BRI projects. The Singapore-China (Chongqing) Connectivity Initiative (CCI), launched by China President Xi Jinping and Singapore Prime Minister Lee Hsien Loong in 2015, is a priority demonstration project for the BRI, Western Region Development and Yangtze River Economic Belt strategies. A major infrastructure thrust will be the Southern Transport Corridor, a multi-nodal network which connects Chongqing in Western China to Singapore, by sea and rail.

20.   Singapore’s Ministry of Trade and Industry, Enterprise Singapore and China’s National Development and Reform Commission (NDRC) signed an MOU earlier this year, to promote greater collaboration between Singapore and Chinese companies in third-party markets along the Belt and Road. 

·     A joint working group will be formed to identify sectors and markets of mutual interest, and organise business matching activities and forums to facilitate third-party market cooperation between Singapore and Chinese companies.

·     Both countries will also work with financial institutions, such as CCB Singapore, to support the financing and project structuring needs of third-party market ventures by companies from both sides.

21. To further Asia’s infrastructure agenda, Singapore has set up an infrastructure office, called Infrastructure Asia, earlier this year.  Infrastructure Asia aims to partner key stakeholders across the region and catalyse more project opportunities including China’s BRI, in order to meet the region’s infrastructure needs. It will also work with MAS to bring together international sources of financing, and channel them towards sound and sustainable projects in the region.

22.   As a platform, Infrastructure Asia’s strength is in connecting local and international stakeholders across the value chain. Specifically, it will match infrastructure projects with developers, advisory services and financing banks. It is well-placed to source for projects using its various market access platforms in this region, and where necessary, work with multilateral banks to turn them into bankable projects that the private sector players can participate in.

23.   I am happy to note that CCB Singapore has been an active infrastructure financier in Singapore, and you’re most welcome to play a very active role in Infrastructure Asia.

·     CCB Singapore has committed financing for infrastructure-related projects amounting to US$1.16 billion, since signing an MOU with then-IES in 2016. Since then, they have financed the construction of power stations, roads and railroads infrastructure and a tertiary institution building.

·     In 2016, CCB issued offshore RMB of RMB1 billion and in 2017, CCB issued S$500 million of SGD bonds.

24.   I am also glad to see that CCB Singapore will sign two MOUs with local engineering and construction conglomerate Surbana Jurong, and environmental solutions provider Envirotech later. Such “multi-disciplinary” collaborations to jointly identify, pursue and develop potential business opportunities will offer a combined, best-in-class service to clients in the region.

Enhancing Digital Financial Services

25.      Now let me move on to my third area on enhancing digital financial services. The rapid expansion of the Asian middle class will spur urbanisation and demand for financial services, especially wealth management and insurance.  ASEAN will become an increasingly important source of final demand in its own right. The bulk of this demand will come from consumers, as millions of households enter the middle-class, and shift their consumption from basic goods & services towards discretionary services, including financial services.

26.      As a trusted centre for wealth management serving the ASEAN market, financial institutions such as CCB Singapore can use Singapore to tap the growing demand of the region’s affluent consumers. To be in a position to tap this growing demand, financial institutions must keep up with technology and be able to deliver a digital experience in order to meet consumer expectations.

27.   MAS has created a conducive environment for financial institutions to adopt technology and advanced analytics to create innovative solutions and new ways to deliver services. We have seen about 30 innovation labs established in Singapore by various financial institutions to test, develop and apply new technology solutions for other markets. 

28.   Earlier, we heard from 田董事长 about how 科技and金融 need to be put together, and I hope the CCB team will set up your base and join us in this FinTech ecosystem. I think that is much that we can learn from you, and there is much that you can work with others to see how we can work together and expand opportunities significantly.

29.   Also importantly, I was very happy to hear田董事长 mention the social responsibility of CCB and resolving housing issues and the range of other issues. And indeed, one of the major lessons we learnt, particularly from the global financial crisis and its impact on the world, is how – when people feel left out of globalisation – that you will have a strong reaction against globalisation. It is so important for banks, for companies, to take corporate social responsibility seriously. And what CCB is doing is extremely encouraging.


30. 亚洲的经济增长前景一片光明。我们将继续加强经济连通性,并与像建行这样的合作伙伴,帮助更多的企业扩大业务和协助更多家庭管理财富。

31.  我期待中国建行继续以新加坡为踏板,向区域发展,拓展业务。再次祝贺建行在新加坡建立分行二十周年,业务蒸蒸日上、更上一层楼!