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Singapore Minister For Trade And Industry Speech At ICC Banking Commission Annual Meeting

World Trade

Open Eyes Opinion {source: SGgov}

Singapore

 

SPEECH BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY, AT THE ICC BANKING COMMISSION ANNUAL MEETING 2015, 22 APRIL 2015, 9:30 AM AT RAFFLES CITY CONVENTION CENTRE

Mr Samuel Tsien, Association of Banks in Singapore Chairman,

Mr Tan Kah Chye, ICC Banking Commission Chairman,
 
Mr Stefano Bertasi, ICC Policy and Business Practices Executive Director,
 
Distinguished guests,
 
Ladies and Gentlemen,
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Good morning. I am pleased to be invited here today to attend the ICC Banking Commission’s 1st Annual Meeting in 2015, held in collaboration with The Association of Banks in Singapore (ABS). This Annual Meeting provides an important platform for the global trade and trade finance community to discuss pertinent issues surrounding this sector.
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Developments in the Global Economy and Trade Landscape

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The global economy is still facing many challenges and uncertainties. A recent IMF report in April noted that the global economy is expected to continue its modest recovery, growing from 3.4 per cent in 2014 to 3.5 per cent in 2015. Medium to long-term trends such as the low oil price environment and uncertain monetary policy continue to weigh on growth.
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Across economies, growth is likely to be uneven. The United States reported a stronger than expected growth in 2014. They have good growth prospects this year, driven by strengthening domestic consumption and steady job creation. In the Eurozone and Japan, growth is likely to remain weak as legacies of the financial crisis linger, intertwined with structural bottlenecks.
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Asia, on the other hand, continues to be a key driver of global economic growth. The Asian Development Bank (ADB) expects the 6.3 per cent growth rate in 2014 to continue over the next two years. As China undergoes a carefully managed slowdown, it will remain an economic powerhouse, and is expected to achieve its growth target of 7 per cent in 2015 and 2016. Meanwhile, India has been able to command steady growth as recent reforms have boosted investor confidence.
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Against this backdrop, trade flows in Asia will remain strong, driven by rapid urbanisation, infrastructure development and strengthening regional economic integration. With a combined population of over 600 million people, ASEAN is a market with immense economic potential. The push toward the establishment of the ASEAN Economic Community will encourage and further boost the free flow of goods, services and investment capital across this region. The lowering of trade barriers and adoption of common platforms will result in increased trade flows within ASEAN, presenting new opportunities in trade finance.
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New trends in cross-border trade

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Amidst these macroeconomic fundamentals and developments, three new trends in cross-border trade have emerged:

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 First, technological advancements have facilitated the matching of cross-border businesses and resulted in the increased adoption of online Business-to-Business (B2B) trading platforms. These B2B platforms help to improve business efficiencies by providing better price and product discovery. To support these international transactions, these platforms are increasingly looking to collaborate with alternative financiers to establish effective trade finance solutions.
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Second, there has been an increase in the adoption of the Renminbi (RMB) as an alternative currency for international trade transactions. The RMB is currently one of the top 7 currencies used in international payments. As a result of the internationalisation of the RMB, more trading hubs are starting to develop capabilities to manage RMB flows efficiently. This will also result in an increased demand for financiers with deep expertise across multiple areas in Asian banking and finance.
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Third, there has been increasing vertical integration of global commodity traders. Global traders like Vitol, Wilmar and Trafigura have invested in both upstream and downstream assets in the trade value chain to secure a steady supply of commodities as well as distribution channels for their business. This provides them with better control of their trade flows, enabling them to capture a potentially higher profit margin. The increasing popularity of such integrated trading models calls for a new breed of trading professionals with deep knowledge of upstream and downstream infrastructure.
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Given our established customs and logistics infrastructure, Singapore has an important role to play in these developments. Singapore is also a growing hub for RMB clearance and RMB offshore transactions. Singapore is keen to play a role in cultivating global trade talent to serve these new changes in the trading community.
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Investment in our workforce to develop trade talent

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Singapore continues to invest in the development of trade talent to address the new paradigms in cross-border trade. As part of our national SkillsFuture initiative, Singapore will be investing in the development of deep industry-relevant skillsets for our workforce. Let me share 3 examples.
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First, International Enterprise (IE) Singapore has worked with the ICC to establish the global headquarters of the ICC Academy in Singapore. The Academy is expected to provide rigorous, relevant and effective business education to over 5,000 professionals annually, strengthening the supply of trade talent. It will serve as a centre of excellence and thought leadership in the area of trade finance. This will enable further collaboration for business activities and analytical research work that will shape the future of international finance.
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Second, we will continue to build capabilities in financial technology (fintech) by encouraging the growth of fintech companies in Singapore. Startupbootcamp, an established startup accelerator will launch a 3-month financial technology accelerator programme in Singapore next month. It will provide Singapore based startups with networking, mentoring and funding support. This will catalyse the development of new solutions in areas that include share trading, transaction security systems and peer-to-peer payment mechanisms.
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Third, IE Singapore and the Nanyang Technological University (NTU) have collaborated to develop a new International Trading Programme Curriculum (ITP) for Engineering, Business and Maritime studies students. The ITP is a cross-faculty programme that aims to cultivate a new generation of trade professionals with diverse knowledge beyond international trading. We believe that industry collaborations such as these will effectively equip fresh graduates with cross-disciplinary skills to meet future demands in trading and trade finance.
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Conclusion

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Singapore remains an attractive place for companies to do business. In 2014, the World Economic Forum ranked Singapore to be the most open economy for international trade and investment. Our vibrant ecosystem of buyers and sellers, as well as supporting business infrastructure enable companies to effectively manage their risk, logistics and marketing functions out of Singapore. Our commitment towards talent development will further enhance Singapore’s appeal as a global trading hub.
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International trade is an important pillar supporting economic growth. We value the strengthening of our relationships with nations through trade and welcome the ICC to continue engaging the global business community through your activities in Singapore.
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Lastly, I wish everyone a fruitful discussion at the conference over the next two days and I hope you will enjoy your stay here in Singapore.
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Thank you.
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