Chinese President Xi Jinping’s visit in Singapore last Saturday is expected to give a boost to the economic collaboration between China and Singapore, especially in the services’ sector.
The improved China-Singapore Free Trade Agreement (FTA) is expected to create opportunities to firms in Singapore at a transition period while the Chinese mainland moves from a manufacturing- based economy to a services one.
The Chinese president gave a motion to the FTA during his short visit in Singapore last Saturday. An expanded pact will give Singapore companies a higher protection for their investments in China, fewer obstacles to investing in the country and a greater access to its services sector.
It comes as a surprise the fact that services, according to official data, have contributed to slightly over half of China’s economy during the first nine months of this year.
Allowing smaller and more progressive foreign service providers into the Chinese market is expected to boost competition and help Chinese companies advance in that sector, allowing for the implementation of further reforms.
According to Assistant Professor Chen Xiaoping of Nanyang Technological University’s economics division, China has been restrictive for a long time in regards to foreign investments. The upgraded trade agreement, initially signed in 2008, is “the best platform to experiment with new investment regulations” said Dr Chen.