Originally posted on 10 Jan 2014
I read today an interesting item from Clifford Chance about the new Singapore International Commercial Court (SICC). A year ago, Chief Justice Sundaresh Menon of the Supreme Court of Singapore announced plans to establish SICC and on 29 November, barely 11 months after that announcement, the SICC Committee, comprising senior Judges, government officials and Singaporean and international jurists, submitted its report to the Singapore Government, which has welcomed the Committee’s recommendations. In Clifford Chance’s words: “the proposed SICC is a masterstroke. The idea is at once bold, visionary and entrepreneurial”.
So, what is it?
It’s an innovative new dispute resolution system which will be of interest to many clients, especially (but not exclusively) those with business and commercial interests in South East Asia. The idea is to establish Singapore as a leading venue for international commercial dispute resolution.
And yesterday, the UK Government announced a landmark agreement which means investors can now invest in Chinese stock markets in Renminbi through the London Stock Exchange. Hong Kong-based CSOP Asset Management, a subsidiary of China Southern fund management Co Ltd will launch the first Renminbi qualified foreign institutional investor (RQFII) exchange traded fund (ETF) listed London. This fund, which will be available to retail and institutional investors across Europe, will take advantage of CSOP’s Hong Kong’s RQFII licence to allow investors to invest directly in the top 50 companies in mainland China.
The Hong Kong and UK RQFII schemes allow financial institutions to use offshore RMB to invest in the Chinese mainland securities markets (stocks, bonds (including inter-bank), and money market instruments). China’s capital controls ordinarily restrict such cross-border activity. More on this here.
This week, it was reported that China has ‘overtaken’ the US as the world’s largest goods trader. According to the latest data, China’s total trade grew at an annual rate of 7.6% to $4.16tn (£2.5tn) last year. But the race may not be over yet – the US is yet to release it full-year figures. All we know so far is that US trade for the first 11 months of 2013 totalled $3.5tn. The US is scheduled to release its full-year figures next month.
This Asian activity comes on top of news earlier this week that the Chinese banking sector could be about to explode onto the financial scene: up to five private banks will be created in China this year as it looks to open up the financial sector and raise competition in the industry. The banks will be allowed to operate on a trial basis under the supervision of Chinese banking authorities.
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