The Bank of China has launched two global commodity business centers in Singapore, making it the first Chinese bank to establish a global energy commodity business center and global commodity repo center outside of China.

The launch of the two centers will allow Bank of China to offer commodity financial solutions and services for commodity companies, providing them increased liquidity to facilitate global growth and tap into the opportunities offered by the burgeoning global commodity market.

At the summit, Bank of China also signed a memorandum of understanding (MOU) with International Enterprise (IE) Singapore, and a cooperation agreement with Singapore Exchange (SGX).

Under the MOU with IE Singapore, Bank of China and IE Singapore commit to further the cooperation to assist Singapore corporations in their internationalization efforts as well as develop Singapore’s commodity trading and financial sectors.

The agreement with SGX will also see both parties continue to cooperate to drive continued Renminbi (RMB) commodity financial innovation, giving businesses access to more diversified financial services and tools.

“In the past 25 years, we’ve witnessed the deepening of diplomatic relations between Singapore and China,” said Bank of China Chairman Tian Guo Li. “China has since become Singapore’s largest trade partner and largest export market and Singapore is China’s largest investor country. With China as the world’s largest consumer of commodities, we foresee an increase in business demand for commodity financial solutions and services.”

Tian also pointed to Singapore’s strategic location at the crossroad of Southeast Asia’s major shipping routes as the leading reason for the launch of the two global commodity centers in Singapore.

Singapore has grown into a global commodity trade hub in recent years. Today, the city is the world’s largest fuel trade center, second largest agribusiness trade center, and second largest oil refining hub. Singapore’s position in the global trade marketplace for metals and iron ore is also fast-rising.

IE Singapore Chairman Seah Moon Ming said the cooperation with Bank of China will foster new opportunities for businesses internationally.

“Singapore and China have strong existing trade relations, with the potential to grow even stronger with the launch of the two new global commodity centers,” he said. “Over the past three decades, IE Singapore has been growing Singapore into a global trading hub, establishing a large and diverse participant network supported by essential services and infrastructure such as programs to develop a specialist talent pool. The multi-language capability, stable political system and robust legal framework make Singapore an ideal location for Bank of China to base its new global business centers.”