China will extend its prized offshore renminbi investment scheme to Singapore, the Monetary Authority of Singapore (MAS) said on Tuesday, as Beijing internationalises its yuan currency in the Asia-Pacific region and beyond.
Other agreements announced on Tuesday to coincide with the visit of Chinese Executive Vice-Premier Zhang Gaoli to Singapore, include plans to introduce direct currency trading between the yuan and Singapore dollar, entrenching Singapore's position as Asia's largest centre for FX trading.
The aggregate quota of 50 billion yuan ($8.2 billion) for Singapore under the Renminbi Qualified Foreign Institutional Investor (RQFII) will let qualified Singapore-based institutional investors use offshore yuan deposits to buy Chinese stocks and bonds, the MAS said in a statement.
China has been gradually relaxing restrictions on the use of the yuan with a view to eventually making the currency fully convertible. Last week, British Chancellor (finance minister) George Osborne said China will extend the RQFII to London and give investors there the right to buy up to 80 billion yuan of Chinese securities.
China and Singapore also said they will set up a working group to promote bilateral trade in services as well work on letting approved China-incorporated companies list directly in Singapore instead of through entities incorporated outside China.
During a state visit to Indonesia by President Xi Jinping earlier this month, the country's firms secured some $32.8 billion of financing and investment from their Chinese counterparts.
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