Singapore and Hong Kong - a tale of two cities

I spent time in Singapore and Hong Kong in March, meeting former colleagues, friends and business contacts. People sometimes assume that the two places are more similar than they actually are. Certainly both the island city state and territory became major international business hubs based on a winning combination of Chinese ingenuity and diligence, and the English language and English common law. But the Singaporean economy has been more government led, whilst Hong Kong was more about vigorous free-ranging capitalism. Obviously, that has changed somewhat in recent times.

?

It was good to see both cities recovering from the economic impacts of Covid. The tourists are back in force in Singapore, with visitor numbers doubling to nearly 14m in 2023, although still 30% below pre covid figures. Six sell-out Taylor Swift performances at the National Stadium had just sparked regional controversy. Singapore paid a large premium for an exclusive agreement that she would not play in other parts of the region on this tour. They were talking about it wherever we went in Asia: seen as a clever commercial coup by some, a selfish move by others.

?

Singapore continues to see large inflows of investments, including capital moving from China and Hong Kong, and a trend of new family offices being established. This has had a big impact on land prices and rent.? The manufacturing sector, in areas like pharma and electronics, is still a bit sluggish, but services are doing better. The strategic consultancy Stonehaven, one of the companies I advise, is winning good business in the resources sector in Indonesia, through its sustainability subsidiary Robertsbridge.

?

2024 will see leadership change for Singapore, with long term PM, Lee Hsien Loong, committed to standing down this year. Though, as always, there will be much continuity, with his successor Lawrence Wong emerging as part of a long term succession plan. The next election is not due until November 2025, but many people I spoke to thought it would happen rather earlier.

?

With 7.4m people, Hong Kong is 36% bigger than Singapore. Its economic recovery has been a bit slower than predicted, as China’s covid lockdown went on for a relatively long time. Visitor numbers from mainland China are still down by a third. But Hong Kong is gradually coming back, and there is always a buzz to its streets which feels energising to the visitor. The tough 2020 National Security Law, which has been criticised by many countries, has clearly impacted on democracy and freedom of speech. But from a business perspective, most contracts are still subject to common law, and most UK companies remain committed to the market. It was good to meet up for dinner with the local HK Chinese family that I did a homestay with, on my very first visit to Asia, 43 years ago.

?

We travelled between Singapore and Hong Kong via several cities in Vietnam – Da Nang, Nha Trang and Ho Chi Minh. The scale of infrastructure construction continues to impress, and Vietnam is clearly benefiting from the “China + 1” manufacturing strategies of many investors. We were also struck by the number of Russian visitors there, presumably some were fleeing the war or avoiding conscription.

?

It's always good to be back in Asia, with its dynamic economies. That’s why the UK’s continued focus on the region – from its “Indo Pacific tilt” to membership of the CPTPP trading bloc – makes good sense.