China, Europe and the Netherlands: Opportunity Is Knocking at Our Doors

Finance 
050 
  Apr. 2015
activities, MAS launched a facility to provide 
overnight RMB liquidity to banks in Singapore.
Strong bilateral cooperation between 
China and Singapore has underpinned the 
growth of the offshore RMB market in Sin-
gapore. At the 2013 high-level Joint Council 
for Bilateral Cooperation meeting between 
Singapore and China, three significant initia-
tives were launched to promote the interna-
tional use of the RMB through Singapore: 
First, rules were established to allow cor-
porates in Suzhou Industrial Park (SIP) and 
Tianjin Eco City (TEC) to issue RMB bonds 
in Singapore. 
Second, direct trading of the RMB and the 
Singapore Dollar was launched on the China 
Foreign Exchange Trading System (CFETS). 
Third, the Renminbi Qualified Foreign In-
stitutional Investor (RQFII) program was ex-
tended to Singapore, with an aggregate quota 
of RMB 50 billion to facilitate cross-border 
institutional investments.
China and Singapore are now expanding 
financial cooperation to encompass capital 
markets and insurance, following the latest 
JCBC meeting in October 2014. Deeper 
co-operation in these areas strengthen and 
broaden financial ties between the two 
countries, allowing Singapore to support the 
growing trade and investment linkages be-
tween ASEAN and China. 
Singapore as an infrastructure 
finance hub
A growing Asia will need large invest-
ments in infrastructure. Better infrastructure 
will enhance connectivity, reduce the cost 
of transactions, help to grow markets, and 
raise living standards. Asia’s infrastructure 
finance needs are projected at US$800 bil-
lion annually until 2020. Given the scale of 
the needs, private sector participation and 
intermediation through the financial sector 
are thus important. 
The US$100 billion Asian Infrastructure 
Investment Bank (AIIB) will contribute to 
meeting the region’s immense infrastructure 
development needs. In addition to being a 
significant source of multilateral develop-
ment financing, the AIIB will play a useful 
role in enhancing infrastructure connectivity 
and promoting regional prosperity.
Singapore is working in partnership with 
a diverse group of stakeholders to create a 
viable ecosystem for infrastructure finance 
in Asia. There are a range of public-private 
sector efforts to bring together banks, insti-
tutional investors, capital market intermedi-
aries, project sponsors, and the multilateral 
agencies to help develop a steady pipeline of 
bankable projects, facilitate financing, and 
make infrastructure an investible asset class.
The World Bank Group Singapore Hub 
draws together the different infrastructure 
expertise along the transaction chain. It 
synergizes the project management capabil-
ities of the World Bank with the structuring 
expertise of the International Financial 
Corporation (IFC) and the credit enhance-
ment facilities of the Multilateral Investment 
Guarantee Agency (MIGA) to deliver practi-
cal project advisory and financing solutions 
to governments across Asia and beyond.  
The Asian Infrastructure Center of Excel-
lence (AICOE) based in Singapore is working 
with governments to catalyze infrastructure 
development. The AICOE will select infra-
structure projects based on needs in the 
region, grow them to a bankable stage, and 
match these projects with private investors. 
The combination of these efforts towards 
financial integration and infrastructural in-
vestments in the region will enhance Asia’s 
long term growth and development. As a 
major international financial center, Singa-
pore will serve to intermediate the flows of 
savings and investments, helping to finance 
growth, manage risks and connect markets 
in Asia.
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 In 2014, the prosperous growth of Internet fi-
nance highlighted a number of teething problems. 
P2P network lending is a new form of financial 
organization which best embodies the very char-
acteristics of Internet finance, and is receiving 
increasing attention and recognition both in China 
and abroad. December 12, 2014 saw the successful 
debut of Lending Club, the world’s largest P2P 
lending platform, on the New York Stock Ex-
change. Many of China’s financial institutions and 
industrial capital have also made strategic plans for 
Internet finance, and this together with the positive 
response of government policy makers has encour-
aged the healthy development of Internet finance. 
Although there remain a number of problems with 
P2P network lending, the development of Inter-
net information technologies and an increasingly 
sound social credit system mean that P2P will 
eventually emerge as a powerful, vibrant force, and 
gradually ensure a more rational path to prosperity.
P2P is an arrangement that best represents 
Internet finance
P2P is not merely a technical tool. It also marks 
a completely new start in terms of concepts and 
methods. In its narrow sense, P2P refers to P2P 
network lending, namely crowd fund-raising. In its 
wide sense, P2P refers to the financial transaction 
behavior in which participants engage directly over 
the Internet including: crowd fund-raising using 
various financial products, P2P currency swaps, 
and even online charity fund-raising. But its main 
feature is the use of Internet technologies to pro-
mote financial disintermediation. Parties seeking fi-
nancial products can use different Internet apps to 
seek out financial product providers and determine 
the most appropriate match of risk and length. In 
this way, the Internet becomes a self-organizing 
financial market with the individual as its core, re-
lationships as its binding forces, and incorporating 
information and transactions.
   P2P network lending is a new form of financial 
organization which best embodies the very char-
acteristics of Internet finance, and is characterized 
by its Internet connectivity, high-speed matching, 
massive data and near-zero margin costs; all of 
these provide P2P with advantages which no tradi-
tional financing system can match.
    First of all, it greatly expands the boundaries 
of the financial transaction arena, and effectively 
reduces the transaction cost of financing activi-
ties. The P2P market can shatter the transaction 
cost constraint, thus making P2P more suitable 
for small- and micro-loans, cross-border loans or 
other fast-paced financial transactions, achieving 
a fast turnaround of funds. This unique advantage 
in terms of efficiency means that the P2P network 
lending market could in theory become the most 
efficient market available for the allocation of credit 
resources.
    Secondly, it best reflects the spirit of Internet 
finance. Finance should shed its elitist characteris-
tics, as the core spirit of the Internet incorporates 
Apr. 2015 
  051 
WWW.BOAOREVIEW.COM
PP
2
Information Regulation 
Should Be Implemented on 
the Basis of Data
By  Xie Ping
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