A few days ago, Financial Secretary Paul Chan Mo-po mentioned in a blog post that Hong Kong is outperforming Singapore as an international finance center in several ways, while revealing that a two-day global investment summit planned for next month, the Global Financial Leaders’ Investment Summit, will be extended to three days, coinciding with the Singapore FinTech Festival.
Paul Chan mentioned that Hong Kong enjoys greater expectations for its larger-scale business community than Singapore does, including the stock market, foreign exchanges, bonds, and asset management services.
Chan’s comment came after Singapore topped Hong Kong in third place, behind New York City and London, in the latest ranking of the global financial center index report from the Global Financial Centres Index last month.
Indeed, there is a tendency among many Hong Kong residents to compare Singapore with Hong Kong, usually as a way to praise the former while criticizing the latter. Hong Kong residents habitually find fault in their own backyard only to cite Singapore as the model of perfection. The only apparent reason for this tendency is that Hong Kong and Singapore share many similarities in economic structure, reliance on finance and trade, as well as size of territory and population. In some ways, Singapore does better than the special administrative region — public housing, for example — whereas Hong Kong excels in other areas, such as public transport and minimal government intervention, and has a higher ranking in the Global Livability Index.
However, Hong Kong and Singapore also have substantive differences. Singapore is an independent country, while Hong Kong is a special administrative region of China under the “one country, two systems” principle, meaning that, in Singapore, its leaders can independently formulate policies and implement them, while in Hong Kong, its officials have to take into account many more things. It does not mean that Hong Kong is worse when it comes to governance; it just means Hong Kong is different.
Anyway, is Singapore beating Hong Kong? To me, both financial centers share many differences. Even though there are many areas in which they can compete, I have always considered that, despite Hong Kong and Singapore being compared all the time and despite being considered eternal business rivals, both financial centers are actually complementary rather than exclusionary, since Hong Kong is and will remain the gateway to the Chinese mainland, while Singapore is mostly the gateway to Southeast Asia. In other words, because of its geographical proximity to Singapore, the Association of Southeast Asian Nations is the natural economic hinterland for Singapore fintech firms, whereas those fintech firms more interested in China’s market will more likely choose Hong Kong.
That being said, it is undeniable that Singapore is beating Hong Kong lately when it comes to the organization of large events: A few days ago, Singapore hosted several huge international conferences as well as the Formula 1 Grand Prix. It is true that Hong Kong will also host several major events in November, such as the Hong Kong FinTech Week, an investment summit that will be attended by the heads of some of the world’s top banks and asset managers; there is also the Rugby Sevens … but, even in that case, it seems that many people prefer to go lately to Singapore than to Hong Kong.
While the “0+3” model, implemented a few weeks ago, has proved to be very successful and has caused many more visitors to arrive in Hong Kong, I think that Hong Kong should get rid of all the remaining travel restrictions as soon as possible, just as Singapore did a while ago, and just as Japan and most Asian countries have already done.
Even though Hong Kong’s economy remains resilient despite the huge challenges and even though there is a clear international acknowledgment of Hong Kong’s role as one of the most important financial hubs in the world, as a financial hub that does not seem only to maintain its position, but to enhance its position year after year, Hong Kong needs to be in a more competitive position to compete with other financial centers like Singapore.
Now that Hong Kong seems to be on its way to having most of its population immunized (be it because they got infected with COVID-19, be it because they are fully vaccinated, or a combination of both), Hong Kong needs to reopen its borders more than ever, since this pandemic is becoming endemic, and unfortunately, COVID-19 will not disappear from our lives.
While some travelers will be OK with the idea of “0+3” (that is, a three-day monitoring period with no quarantine) plus doing PCR tests on days 2, 4 and 6 after arrival, and a rapid antigen test every day for seven days after arrival, these measures will discourage many others from visiting Hong Kong, thus causing Hong Kong to lose potential tourists and talent at a time when all the other financial centers are willing to take advantage of Hong Kong’s situation.
I understand that Hong Kong has to be careful when it comes to opening up, but, to me, it is time to move further so Hong Kong can not only keep its position as one of the world’s most important financial centers but enhance it. Not fully reopening will hinder its growth, now that Hong Kong has so much potential to grow due not only to its role as a major financial center but also due to its involvement in projects like the Guangdong-Hong Kong-Macao Greater Bay Area.
The author is a fintech adviser, a researcher and a former business analyst for a Hong Kong publicly listed company
The views do not necessarily reflect those of China Daily.