Some folks in Hong Kong appear to have an obsession with SG as a “competitor”.
Actually, the 2 economies are very different and serve different roles, despite having a common legacy of British rule.
For modern Hong Kong, the real question is what role it serves vis a vis China.
During British rule, and especially after the communist takeover of China, Hong Kong served as a trading window to China.
Post British rule, that role began to change when China joined the WTO in 2001, and continued its path of reform and economic liberalisation that began in 1978.
Mfrg soon fell from the 20-30% range (up to the 1980s) to sub-10%, as HK industries moved into China. That meant a huge employment gap from loss of more stable mfrg jobs for a whole range of workers from semi-skilled workers to mid-level supervisors and managers.
Now, there are practically no more mfrg jobs in HK - mfrg is now less than 5% of its GDP, around 2-3%.
[Afternote: Latest World Bank data shows 1% share of GDP for manufacturing in HK in 2017. This is down from a peak of just over 30% in 1970, when HK was well on its way as one of the 4 little dragons in East Asia.]
So HK became a service centre for China.
But think about it - which was the financial and business centre of China prior to 1949, and prior to British takeover of HK?
Shanghai was the key financial centre of China, with other thriving centres in Beijing for the north and Guangzhou for the south.
HK never served that role in the long history of China until the British came along and post-war China closed up in an ultimately failed experiment in self sufficiency.
So as China opened up, its real competition is in China - Shanghai, Guangzhou and BJ.
With liberalisation, the Chinese economy reached about US$1 trillion by about 2000, about 6 times the size of HK GDP.
With a further integration with the world economy post joining WTO, China’s GDP has grown over 10 times by 2018. Meanwhile, HK’s GDP has doubled.
HK’s GDP is now about 3% of China’s GDP. In other words, China’s economy is over 30 times the size of HK’s economy.
Even Shenzhen, which was only a thinly populated fishing or farming village before 1980, has now surpassed HK in both GDP terms and in its collection and density of top Chinese talents from all over China. True, Shenzhen was an SEZ, but that showed the promise of economic liberalisation even before China joined the WTO.
So the real question is what role should HK play vis a vis China, and vis a vis the world.
Being obsessed with the movement of some money and people to SG (and ignoring the movement of people and money elsewhere to USA, Canada, Australia, UK, esp for their professional talents), just misses the point.
Just as we do not have a choice who our parents are, both HK and SG have no choice in their geographical location.
HK is bound to China in her history and geography, just as SG is firmly fixed geographically in South East Asia.
The British used HK as a trading post for China, and SG as a trading post for spices in South East Asia.
The added role for SG has been the headquarters of the British Far East Command, until WW2 broke the myth of British naval superiority.
SG found its way to survive post independence.
HK in the main depended on the largesse of China for a small sliver of services.
The beginning of this decade saw some multinationals deciding to relocate or locate directly in Chinese cities such as Shanghai.
The living conditions have improved and the confidence also grew, for them to consider Chinese cities as direct alternatives to HK, especially when they have huge mfrg plants in China.
True, some Chinese go to HK too, or based themselves there. It was attractive to some Chinese as there were no restrictions on the number of kids, etc - and even that is loosening up in China.
If China continues to loosen up and improve its conditions for living, the real challenge to HK is what role does HK play for China and for the world?
Over the last 22 years, the real value of HK to China is as a demonstrator of the One China Two Systems concept, as a way to try to entice Taiwan back into her fold.
But if this is shown not to work, then the strategic value of HK vis a vis the all important question of Taiwan for China will greatly diminish.
Is HK the Dubai of China, where the Chinese go to decompress? Is HK the window of China where the world goes to have a ringside seat to watch and do business with China? Is HK another more sophisticated SEZ to experiment with the evolution towards democracy with Chinese characteristics?
HK itself had never been a democracy, so even HK would have to feel its way forward as a democratic petri dish. But HK has had the advantage of never having to raise and keep its own military - it has thus more financial freedom and its population freed of military service obligations.
SG was a little more fortunate - it has had its own experiment which began in post-war SG - municipal elections, self government (autonomous govt except in defence and foreign affairs), before merger and independence.
So the SG population and political and business leadership learnt what works and what doesn’t.
And survival (or rather, the threat of extinction) is the biggest driver for learning fast without the cloud of ideology.
Perhaps the example of SG could hold lessons for HK in terms of political pathways - municipal elections for people to look after their own districts, followed by self govt in all but defence and foreign affairs.
The thoughtless political structure that the British left behind hastily for HK is not a favour for HK, nor a viable route to democracy with HK characteristics, much less democracy with Chinese characteristics.
So Hongkongers can best serve themselves by looking deep within themselves to decide what role they wish to play in and for China. Only when they can play a relevant role in and for China, would Hong Kong also find its role in the world too.
Meanwhile, SG too needs to rethink its role in its own region and in the world, in the light of what the geo-economics, regional politics and technology will be doing to shape the flows of trade and business over the next decade and more.
There are forces of nature too which can engulf us all - they are no respector of political ideologies or intentions - and they are more powerful than the defences which the most powerful nations can muster on earth.
So keep well folks, stay calm, think deeply, and act methodically and decisively, for a better, kinder, safer world for our people and country, our families, our future generations.