Ventures Dialogue

China and Singapore are strengthening economic ties with a free trade agreement (FTA) that will come into effect January 1, 2009 and implemented in a two-phase process.  In this agreement, the first comprehensive bilateral agreement by China with another Asian country,  the two countries also agree to develop simplified customs processes.  The particulars of the FTA are:

• All goods Chinese imports to Singapore should not have customs duties applied to them as of January 1, 2009.
• More than 85 per cent of China’s imports from Singapore (complying with Origin criteria) should not have customs duties applied to them as of January 1, 2009. Some local excise duties will apply on certain goods.
• About 95% of China’s imports from Singapore (save for 260 products) should not have customs duties applied, “tariff-free”, by 2010.

Goods are eligible under the program if they are wholly obtained or produced in China or Singapore.  If they are not, then they must comply with one of three rules:  1) Regional Value Content Rule; 2) Cumulative Rule of Origin Rule; 3) Product Specific Rules. For more specifics about the rules and the FTA, check out briefing this from Deloitte, as well  the news release from the government of Singapore.

Last year, bilateral trade between China and Singapore hit a record of more than $76 billion.  China ranks as Singapore’s third largest trading partner and the major market for investment.  Singapore as well is China’s eighth largest trading partner and seventh largest investor.

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