Despite their obvious similarities, both economies have important structural differences. “Singapore and Hong Kong are both small, open economies with large financial sectors. But Singapore is much less mainland China-centric than Hong Kong is. Singapore is also less equity-centric in its financial services and more evenly distributed, taking a more diverse approach,” write Sung and Wu in a 15 December report.
As the two poles of global financial flows in Asia, a tacit rivalry has existed between Hong Kong and Singapore as both have competed for the title of “Asia’’s premier financial center.” With Hong Kong’s political turmoil showing no signs of abating, some Singaporeans may be quietly gloating, believing that the ever-reliable Lion City will become a more attractive option for finance vis-a-vis the “Pearl of the Orient”.
But according to economists Sung Eun Jung and Tommy Wu from Oxford Economics, competition between the two cities is no longer a zero-sum game. Both cities, they say, will increasingly find themselves playing different roles in global financial markets. In economist-speak, the two economies will become more complements than substitutes for one another.
