Singapore as an International Financial Centre

Ker Sin TzeTrade Representative

Singapore Trade Office in Taipei

At the 14th Annual Conference on Pacific Basin Finance, Economics, and Accounting at Grand Hotel, Taipei on 14 July 2006

Singapore’s GDP Growth

GDP in 2005 was S$194,359.8 million (US$116.770.7 million)

Year Growth Rate (%) Per Capita GDP (US$)

2000 10 $23,078

2001 - 2.3 $20,723

2002 4.0 $21,209

2003 2.9 $22,155

2004 8.7 $25,352

2005 6.4 $26,833

2006 1st Quarter 10.6

2nd Quarter 7.5

Growth in Q1 2006 was 10.6% (6.8% after seasonal adjustments). Broad-based economic expansion due to strong global IT demand, intra-regional trade. Growth in Q2 2006 was 7.5%. Forecast growth in 2006: 5-7%.

Investment & Trade

a) Major sources of foreign direct investments are Europe, US and Japan. Singapore’s investment destinations abroad are China, HK, Malaysia, Caribbean/Latin America, etc

US$ (Million)Foreign direct investment stock in Singapore at end 2003 143,691.7Singapore’s stock investment abroad at end 2003 172,859.8

Destinations for Singapore’s direct investment in 2003 were:

British Virgin Islands 14.4 %China 12.4Malaysia 8.7Bermuda 7.6Hong Kong 7.5

b) Total trade in 2005 was US$430,070.2 million (at exchange rate US$1=$1.6642). About 70% was with Asian countries, 13% was with America including Brazil and Canada, another 13% was with Europe and the remaining 4% was with Australia, NZ and Africa.

c) Singapore has been promoting investment and trade with China for the last 25 years. With the rise of India and the new opportunities in the Middle East, Singapore is also promoting investment and trade in India and the Middle East.

FTA & CEP

To-date, Singapore has signed FTAs or CEPs with the following countries:

Country Year

New Zealand 2000

Japan 2002

European Free Trade Association 2003

Australia 2003

US 2004

India 2005

Korea 2005

Jordan 2005

Trans-Pacific SEP 2006

Panama 2006

International Financial Centre

In 2005, financial services accounted for 11.6% of Singapore’s GDP

a) Basic Favourable Factors

Sound economic and financial fundamentals

Conducive regulatory and business environment

Strategic geographical location

Skilled labour force

Excellent telecommunications and infrastructure

High living standards

b) Activities

Banking

Asian dollar market

Foreign exchange market

Bond market

Equity and derivatives market

Fund and asset management

Insurance

c) Additional Activities in Future

Regional leader in wealth management

Regional and global processing centre

Asia Pacific risk management centre

Present and Future

Singapore has won praises in international assessments of its good business environment and competitiveness.

Rank

Business environments by Economist Intelligence Unit 6

Network ready country by World Economic Forum 2

Best labour force by BERI's 2005 Labour Force Ranking 1

Overall competitiveness by IMD World Competitiveness

Yearbook 2006 3

Best place for Asian expatriates by ECA International 2006 1

The favourable factors listed above will help to bring about excellent economic performance in future. With sustained growth and Singapore's diversification of investment links to China, India and the Middle East, Singapore will continue serving as the focus point for the flow of financial resources between them, and Singapore as a major financial centre will grow further in the years to come.