Hong Kong hasn’t been “replaced” by Singapore

Singapore’s Law and Home Affairs Minister K Shanmugam said on Wednesday that the notion that Singapore has “supplanted” Hong Kong puts too much weight to short-term considerations (Mar 29).

Mr. Shanmugam stated, in response to comparisons between Singapore and Hong Kong as financial capitals in Asia, that both economies benefit from each other’s growth and vibrancy in the area.

Paul Chan, Hong Kong‘s Financial Secretary, was in attendance at the South China Morning Post’s China Conference: Southeast Asia in Singapore, where the minister was speaking.

According to him, the theme of Singapore vs Hong Kong has been “somewhat exaggerated” in the media, with the narrative being that only one can gain at the expense of the other.

“The truth, I believe, is rather different and somewhat less dramatic, as each has its strengths, each has its hinterland, and both can perform quite well,” he remarked.

Greater than 75% of market capitalization on Hong Kong’s stock exchange is held by mainland corporations.

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He noted that it is the largest offshore yuan center and is located in China’s Greater Bay Area, which has a gross domestic output of over $2 trillion.

Mr. Shanmugam remarked, “China also desires Hong Kong’s success, which is significant.”

He stated that it amuses him to hear that Hong Kong is “in terminal decline, does not have democracy, etc.” and that many of the qualities necessary for the city’s continued success are present.

He emphasized that, similar to Singapore, this was contingent upon there being no severe internal or foreign disturbances, such as war or political unrest.

In 2019, Hong Kong witnessed major antigovernment demonstrations. The following year, China issued a law to penalize secession and rebellion in the city.

Mr. Shanmugam stated that Hong Kong has been “in transition” during the past several years and that there has been a “recalibration of its posture vis-à-vis China,” but that analyses of the recalibration and protests have been “vastly distorted.”

“In many ways, I believe Hong Kong has been a victim of anti-China sentiment in some areas of the world and their media,” the minister stated.

“I expect that savvy investors will look beyond media tales and transitional impacts. And they will recognize that Hong Kong’s trajectory is obviously upward,” he added.