Having weathered the shocks of the 1997 Asian financial crisis and the 2008 subprime mortgage crisis, over the past two decades, Singapore's economy has demonstrated remarkable resilience. Such sustained stability is rare among developed economies. The world is eager to find out how Singapore continues to maintain its economic stability while rising to become Asia's financial hub.
Speaking of Singapore, many people immediately associate it with its well-developed capital markets.
At the core of Singapore's capital market is the Singapore Exchange (SGX), which traces its origins back to 1973. In June of that year, the Stock Exchange of Singapore officially began operations. In 1999, the Stock Exchange of Singapore merged with the Singapore International Monetary Exchange to form the Singapore Exchange.
By November 2000, SGX itself was listed on the exchange. Thanks to Singapore's open-market strategy, SGX has become a top player among Asian markets in attracting foreign listings.
With the rapid inflow of international capital, SGX has become increasingly internationalized.
Karen Chen, Head of China, SGX Group said this internationalization is primarily reflected in two areas: capital and markets. Singapore's capital is defined by "patient capital", with AUM exceeding US$4 trillion. Thanks to its favorable business environment and tax incentives, the country has attracted long-term investment funds, wealth funds, pension funds, and family offices from Southeast Asia and around the world.
Singapore has been accelerating capital market reforms. On February 21, the Monetary Authority of Singapore has announced its first set of measures to reform the local stock market. The key focus is on enhancing investor interest, increasing the appeal for high-quality company listings, and optimizing the regulatory framework.
Chen said, Singapore has been committed to fostering a robust market eenvironment. It has established a competitive edge in intellectual property protection, legal frameworks, and transparent regulation. In recent years, it has also accumulated significant resources and potential in ESG and the comprehensive healthcare sector. As major global capital markets face increasing uncertainty, Singapore's relative stability provides investors with a sense of security and protection.
Since its launch, the Straits Times Index (STI) has been a key indicator of Singapore's economic development. In 1998, the index broadened its scope beyond industrial stocks, marking Singapore's shift toward becoming a leading financial hub in Asia.
From 1998 to the present, the STI has surged by approximately 175%. In 2024, the index recorded an annual gain of over 17%, making it the best-performing stock index in Southeast Asia.
"Singapore's stock market ranks first in Asia and second among major global indices, which shows that it is not only relatively stable but also has strong growth momentum." Chen said.
One of the key drivers behind Singapore's thriving capital market is the deepening cooperation between China and Singapore.
In November 2024, United Overseas Bank issued a 5 billion yuan, three-year Panda bond, which was officially listed on SGX with a bell-ringing ceremony.
"The listing of Panda bond in Singapore not only increases investor awareness but also attracts both local and global investors to RMB-denominated investments in China. "Chen said that by utilizing SGX as a listing platform, Panda bond contributes to advancing the internationalization of the RMB.
Since the establishment of diplomatic relations between China and Singapore, the two countries have fostered over 30 years of mutual trust and cooperation.
For the past 11 years, China has been Singapore's largest trading partner, while Singapore remains the largest source of new foreign investment in China.
The strong economic and trade ties between China and Singapore have boosted investment enthusiasm through bilateral policy coordination.
By December 2024, the seven ETFs traded through the China-Singapore Connect had exceeded SGD 620 million in assets under management. Meanwhile, the index that tracks the 50 largest and most liquid Chinese A-share listed companies, the FTSE China A50 Index, has surged over 17% in 2024, reflecting foreign investors' confidence in Chinese assets.
Chinese companies are tapping into the Southeast Asian market through Singapore and use it as a springboard for global expansion.
In the areas of artificial intelligence, quantum technology, and new energy vehicles, China is demonstrating strong growth momentum, which is instilling greater confidence in Singaporean enterprises to invest in the Chinese market.
China-Singapore cooperation is thriving across multiple sectors, and the two nations are expected to continue fostering a prosperous future, embodying the spirit of the "Dragon and Lion dancing together".
Chief Producer: Yu Xiaona
Reporter: Hu Huiyin
Editor: Li Yanxia
Video Editor: Xiao Hang
Intern: Hu Yang, Wen Jiawei
