Singapore 'looking to widen its yuan role'

Trade: More financial cooperation expected

Bilateral trade between the two countries was further boosted with the signing of the China-Singapore Free Trade Agreement in September 2008, the first comprehensive bilateral FTA China signed with an Asian country.

Zhou said,"We anticipate that the financial sector in Singapore can make a bigger contribution to China's ongoing financial reform."

Six of the top 10 Chinese banks have a presence in Singapore, while three Singaporean banks have a presence in 15 Chinese provinces.

Shanmugaratnam said, "There is potential to further these financial interconnections as China gradually widens and deepens its financial markets."

He said the Monetary Authority of Singapore has started holding an annual exchange of views with the China Banking Regulatory Commission on mutual cooperation and market development, and is planning to deepen engagement with China's national securities and insurance regulators.

"We hope for more such bilateral collaboration as China continues the progressive internationalization of its financial market and currency," he said.

The opening of the MAS Beijing office came a day after Standard Chartered and HSBC Holdings launched the first batch of offshore yuan-denominated bonds in Singapore, and Industrial and Commercial Bank of China's Singapore branch began yuan clearing services in the city state.

ICBC said on Tuesday in a statement that it conducted 53 yuan clearing transactions valued at more than 1.6 billion yuan ($259 million), and opened clearing accounts for 49 banks during its first clearing day.

"Key banks in Singapore are ready to actively participate in the promising new market," Shanmugaratnam said.

According to Zhou, Singapore has become the second- biggest yuan transaction center after Hong Kong since it launched the business in 2009.

China and Singapore doubled the size of their currency-swap arrangement to 300 billion yuan in March, a month after the People's Bank of China, the country's central bank, approved the Singapore branch of ICBC as its clearing bank.

As of June 2012, deposits of the currency in Singapore stood at about 60 billion yuan.