Hong Kong falls. Singapore rises

Surekha A. Yadav
Surekha A. Yadav

SEPTEMBER 15 — Like so many others in the region and wider world, I looked on with sadness as I saw Hong Kong’s protests escalate from peaceful rallies to daily clashes. 

This was no ordinary bout of public protest; this is a fight for Hong Kong's survival as an entity distinct from the legal and administrative framework of mainland China.

Basically a fight for the one country, two systems agreement under which sovereignty over Hong Kong was transferred from the United Kingdom to the People's Republic of China in 1997.

Recent moves by Beijing have undermined the one country, two systems framework with Beijing increasingly exerting influence on matters like security and education.

The breaking point was a proposed extradition agreement which would have allowed suspects wanted for crimes in the mainland to be extradited from Hong Kong. 

In principle, an extradition agreement between parts of the same country should be straightforward.

In practice, many people in Hong Kong were horrified by the potential of extradition from Hong Kong’s relatively robust legal system to the PRC’s courts which are known to have very limited protections for defendants. 

Protests started over the extradition agreement but have spread to cover a wider range of grievances. 

Even after the government withdrew the extradition Bill, protests carried on with protestors demanding the resignation of Hong Kong’s Beijing-appointed Chief Executive and calling for a fully democratic electoral system in Hong Kong. 

These are demands to which Beijing cannot accede to. Hong Kong’s special status has been useful to Beijing.

For decades, the territory allowed China and Chinese businesses to access global financial systems without China having to implement institutional and legal reforms on the mainland. 

But today China is developed enough, its economy large enough that it is no longer dependent on Hong Kong as a window to the wider world. 

Nations and businesses will trade with China regardless of where and how they have to do it. Whether that is in Hong Kong or Shanghai, Shenzhen or wherever else. 

Ultimately, Hong Kong’s fall is part of China’s rise. 

While I admire the tenacity of these demonstrators fighting the tide and I wonder what will happen — after all the determination of millions of people in a single city can have unpredictable consequences, which is probably why Beijing authorities have displayed considerable restraint so far — I am interested in what impact the situation in Hong Kong will have on Singapore. 

The honest reality is, probably a positive one.  

Hong Kong’s current unrest and the possible dilution of Hong Kong’s legal framework will very likely see businesses shift to Singapore.

It looks like we are seeing the culmination of a remarkable process. In the 80s and 90s Hong Kong was a global financial centre — the absolute centre of Asian business and finance. Singapore was not in the same league. 

Today our GDP is virtually one to one with Hong Kong’s. Our per capita income is substantially higher.

Across multiple verticals, Singapore is out-competing Hong Kong and with stable policy, strong infrastructure and an educated workforce we remain, comfortably, the top choice for businesses shifting out of Hong Kong. 

Singapore will almost certainly be a beneficiary of Hong Kong’s troubles. The question is what we will do with this windfall.

Will we use it to develop capital markets — a field in which we’ve long lagged behind Hong Kong? 

Will shifting businesses be a boon for local employees raising incomes and living standards? 

Critically, will the unrest in Hong Kong force policy makers to look closely at social conditions at home.

Our policy makers so far have been well ahead of the game but problems with inequality, rising costs and feelings of alienation are not entirely alien to Singapore and these underlying factors helped drive demonstrators in Hong Kong. 

For now, Singapore has been presented with an opportunity, but it should not be seen as simply a matter of more business and profits — rather this should be an opportunity for sustainable and healthy growth that continues to better the lives of all us. 

It appears Singapore is about to don the mantle of Asia’s financial capital — I want us to be worthy of it.

* This is the personal opinion of the columnist.

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