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3.5 <strong>China</strong>-Singapore <strong>Free</strong> <strong>Trade</strong> <strong>Agreement</strong> The first comprehensive bilateral FTA that <strong>China</strong> has signed with another Asian country is its FTA with Singapore, covering trade in goods, trade in services, rules of origin, trade remedies, sanitary and Phytosanitary measures, technical barriers to trade, customs procedures, ec<strong>on</strong>omic cooperati<strong>on</strong> and dispute settlement, am<strong>on</strong>g others. Currently, <strong>China</strong> is Singapore's third largest trading partner and largest investment destinati<strong>on</strong>. The <strong>China</strong>-Singapore FTA was signed <strong>on</strong> 23 rd October 2008 and has entered into force <strong>on</strong> 1 st January 2009. The FTA c<strong>on</strong>cluded in 2010. The tariff lines that are subject to the tariff reducti<strong>on</strong> or eliminati<strong>on</strong> programme under this <strong>Agreement</strong> are all the tariff lines covered under the Normal Track, as specified in the <strong>Agreement</strong> <strong>on</strong> <strong>Trade</strong> in Goods of the Framework <strong>Agreement</strong> <strong>on</strong> Comprehensive Ec<strong>on</strong>omic Co-operati<strong>on</strong> between the ASEAN and the <strong>China</strong>, which was signed <strong>on</strong> 29 th November 2004. 123 In the case of Singapore, this <strong>Agreement</strong> shall also include all tariff lines covered under the Sensitive Track, as specified in the ASEAN-<strong>China</strong> <strong>Trade</strong> in Good <strong>Agreement</strong>. The FTA has provided preferential coverage for about 95 per cent of Singapore’s exports to <strong>China</strong>, with a trade value of more than S$18 billi<strong>on</strong>. More than 85 per cent of Singapore exports to <strong>China</strong> were at zero-tariff up<strong>on</strong> the <strong>Agreement</strong>’s entry into force <strong>on</strong> 1 st January 2009. An additi<strong>on</strong>al 10 per cent had become duty-free <strong>on</strong> 1 st January 2010. Key exports that benefit include petrochemicals, processed foods, and electr<strong>on</strong>ics and electrical products. In additi<strong>on</strong> to individual income tax benefits, Singapore has intended to grow its populati<strong>on</strong> by another 2 milli<strong>on</strong> people, and many of these are expected to be wealthy mainland Chinese nati<strong>on</strong>als. Corporate benefits include reducti<strong>on</strong> <strong>on</strong> withholding taxes for a variety of services, including chargeable royalties. This, coupled with Singapore’s low corporate and individual income tax rates, is <strong>on</strong>e of the reas<strong>on</strong>s Singapore is becoming a corporate regi<strong>on</strong>al hub for investments into <strong>China</strong> and Asia. As foreign investors automatically qualify as Singaporean companies when setting up a subsidiary there, they can also access Singapore’s own impressive array of internati<strong>on</strong>al tax treaties, which include numerous other FTAs, as well as over 80 bilateral double tax agreements. 124 The <strong>Agreement</strong> has 14 chapters: Chapter 1: Initial Provisi<strong>on</strong>s, Chapter 2: General Definiti<strong>on</strong>s, Chapter 3: <strong>Trade</strong> in Goods, Chapter 4: Rules of Origin, Chapter 5: Customs Procedures, Chapter 6: <strong>Trade</strong> Remedies, Chapter 7: Technical Barriers to <strong>Trade</strong>, Chapter 8: <strong>Trade</strong> in Services, Chapter 9: Movement of Natural Pers<strong>on</strong>s, Chapter 10: Investment, Chapter 11: Ec<strong>on</strong>omic Cooperati<strong>on</strong>, Chapter 12: Dispute Settlement, Chapter 13: Excepti<strong>on</strong>s and Chapter 14: General and Final Provisi<strong>on</strong>s. The <strong>Agreement</strong> has 7 annexes which c<strong>on</strong>tain the following: tariff eliminati<strong>on</strong> schedules, product specific rules, formats of certificate of origin, c<strong>on</strong>tact points for TBT and SPS, schedules of specific commitments <strong>on</strong> services, commitments <strong>on</strong> temporary entry by natural pers<strong>on</strong>s and rules and procedures for arbitral proceedings. 123 Available at: [http://www.fta.gov.sg/fta_csfta.asp?hl=27] 124 Dev<strong>on</strong>shire-Ellis, C (2014), “Understanding <strong>China</strong>’s <strong>Free</strong> <strong>Trade</strong> <strong>Agreement</strong>s”, <strong>China</strong> Briefing, February 2014, available at: [http://www.china-briefing.com/news/2014/02/10/understanding-chinas-free-tradeagreements.html] Page 43 of 88