Let’s be clear, Singapore is a great city. I’ve been going there myself since my late teens and have always been struck by the dynamism, ingenuity and energy of the place and, in particular, the strong and unmistakable national identity that now attaches to all “Singaporeans”. Whilst my current focus is on Hong Kong for various reasons, I don’t buy into the so-called ‘rivalry’ between the two cities. They are both wonderful for different reasons and, if you’re serious about doing business in Asia, you should make regular visits to both cities to take advantage of the many enticing incentives and opportunities on offer.
I was therefore drawn to a recent briefing from Bloomberg Intelligence “Hong Kong vs. Singapore 2024 – Why the Race to Be Asia’s Top Business and Finance Hub May Be Almost Over” and am happy to recommend this analysis to anyone who is still interested in the “enduring rivalry to host global investors’ operations in Asia”.
Here is a quick summary of the findings:
- Hong Kong’s capital markets are larger, deeper and more expansive than Singapore’s by a factor of around 7. There are 2,500 companies listed in Hong Kong’s stock market, around 2.7 times more than in Singapore, and, according to the report, “Hong Kong will continue capturing more capital-markets business and equity trading volume than Singapore for the foreseeable future”. When raising money to support tech founders to commercialise and scale their innovations into the region, my focus in the short term will still be on Hong Kong, although I don’t rule out Singapore, particularly in the tech sector.
- Singapore has become the preferred location as a regional HQ for multinational companies due to its more diversified economy, competitive tax incentives, broader talent pool and it’s better relations with the West. “Not only do multinational corporations prefer Singapore to Hong Kong for their Asian headquarters, but many Chinese firms do also as they hedge geopolitical risk and broaden their global businesses”. It would be difficult to launch your China business from Singapore but, if your focus is more on SE Asia (Indonesia, Vietnam, Thailand, Malaysia etc.) then Singapore is undoubtedly the place.
In Section 2, the report starts with ‘for decades, Hong Kong and Singapore’s rivalry and prosperity rested on their common heritage as former British colonial trading ports in an economically rising East Asia. Hong Kong’s return to Chinese rule in 1997 coincided with the country’s accelerated integration into the global economy. Their similarities continued through the geopolitical shifts following the global financial crisis of 2008, but their fundamentals diverged with the Covid-19 pandemic and increased tensions between China and the US”. I agree with that statement as a historical record but it’s hard to make predictions about the future. The USA goes to the polls later this year (and I don’t need to tell you what could happen there!) and China will continue projecting its power and influence within the Asian region, including in Singapore. The picture can change rapidly for all sorts of reasons and I would caution anyone from making long term decisions based on how geopolitical tensions and Covid have shifted the dial over just the past 3 years.
Perhaps Australia will become the ‘new Singapore’?!