Hong Kong, Singapore leaders discuss Asian growth, dismiss 'rivalry' talk

Hong Kong and Singapore each have unique strengths as Asia's most consequential financial hubs, and the view that they are locked in a zero-sum rivalry is a result of media hype, leaders of the two cities said on Wednesday.

The relationship between the two cities was in sharp focus at the China Conference: Southeast Asia 2023, the first major overseas forum organised by the Post since 2019.

Top Singapore minister K. Shanmugam, one of the headline speakers at the conference, said both cities benefited from each other's growth, and "the suggestion that Singapore has supplanted or is supplanting Hong Kong gives too much weight to short-term factors".

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Hong Kong's Financial Secretary Paul Chan Mo-po, also a keynote speaker, described Asia as the "region of tomorrow", saying strong collaboration with the 10-nation Asean bloc, which Singapore is a part of, was a key plank of the city's - and mainland China's - economic policy.

The Hong Kong financial tsar made a strong pitch for the city boosting its status not just as the natural international financial hub for mainland companies, but also among firms from overseas which are in emerging sectors within the so-called new economy.

While it was important for Hong Kong to continue to serve as the mainland's international financial centre, it needed to "embrace and facilitate" the movement of global firms to the city too, he said.

Chan also emphasised that Hong Kong could become a regional hub for green technology and finance.

Hong Kong was already home to a burgeoning list of green tech firms and it issued its first tokenised government green bonds - the first of their kind in the world - in February, he said.

The city was also Asia's top issuer of green and sustainable debts last year, raising US$80 billion. "But our aspiration is much higher and bigger. We are determined to position ourselves as the centre of green tech and green finance," he said.

Shanmugam, Singapore's Minister for Home Affairs and Law, dedicated a significant part of his 20-minute speech addressing the dynamics between the city state and Hong Kong.

"By virtue of the geography of both places, and what Hong Kong and Singapore have built ourselves into - both can, and I think, will, do very well. It is never a zero-sum game," Shanmugam said.

"And between Singapore and Hong Kong - our economies are closely intertwined," he added, noting that Hong Kong was Singapore's fifth-largest trading partner, while Singapore was Hong Kong's fourth-largest trading partner.

The minister said the topic of the relationship between the two cities was "many people's favourite topic" and a "topic the media loves" as it "makes for better headlines".

"The story is Singapore versus Hong Kong - two 'Asian Tigers', financial hubs, competing against each other. And the narrative is that only one can benefit at the other's expense," Shanmugam said. "The truth, I think, is a little different, and rather less dramatic, because each has its strengths. Each has its hinterland, and both can do very well.

"But that doesn't make for catchy headlines. My view [is that] a lot of this talk is simplistic, without deeper analysis," he said.

The minister also weighed in on what he said was unfair media coverage against the Hong Kong government when it sought to restore public order during the 2019 political turmoil.

"My view is that Hong Kong has been a collateral casualty of an anti-China mood in some parts of the world and in their media," Shanmugam said.

He noted that media coverage had shown police law and order actions were deemed an attack on democracy activists, while those who damaged property and attacked officers were celebrated as democracy activists.

"The hypocrisy in all of this - not many commented about the lack of democracy in Hong Kong until 1997, or that it did not affect Hong Kong's success and vibrancy. After 1997, many had a sudden attack of democracy consciousness."

Shanmugam and Chan both sought to suggest that amid various challenges, there remained strong prospects for economic growth in Asia.

The Singapore minister acknowledged that there were serious geopolitical risks with the world "being seen as divided into two blocs, with the Global South watching anxiously".

The tensions required management by "responsible leadership by all sides", but still opportunities were abound in Asia, he said, pointing to - among other things - the region's fast-growing consumer market, rising number of middle-income households, and the availability of capital to support innovation and entrepreneurship.

Chan noted in his speech that despite the "rather gloomy global economic outlook elsewhere", Asia remained an economic powerhouse.

"This is so true in the midst of high geopolitical tensions, and the financial turbulence in the United States and Europe recently," the Hong Kong financial secretary said. "Countries like those in the Gulf region are actively seeking to diversify investments in this part of the world."

Chan, who was in Singapore following a visit to neighbouring Malaysia, also held talks with the city state's No 2 leader, Lawrence Wong, on Wednesday.

Deputy Prime Minister Wong - the designated successor to Prime Minister Lee Hsien Loong - said in a social media post that the leaders discussed regional macroeconomic and geopolitical developments.

Wong echoed Shanmugam's remarks that the media was hyping up the rivalry between Hong Kong and Singapore.

In reality, both cities were not engaged in zero-sum competition and they "embrace healthy competition which motivates both sides to excel", Wong said.

Writing on Facebook, Chan said during his visit to Malaysia and Singapore he met representatives of family offices and tech companies who were confident about Hong Kong's prospects in the areas of digital economy, green technology and finance.

"They believe that the potential for development is unlimited, and they are interested in setting up or expanding their businesses in Hong Kong," he said.

The two-day conference, featuring 46 speakers, also featured a keynote speech by the Malaysian international trade and industry minister Tengku Zafrul Aziz.

In a fireside chat, the former top banker said the return of political stability under Prime Minister Anwar Ibrahim had been noticed by international investors who are showcasing their confidence in the administration through a pipeline of new deals.

This article originally appeared on the South China Morning Post (SCMP).

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