EJ Insight » Hong Kong
Hong Kong and Singapore have been competitors in many respects and their long-running rivalry has been intense and close.
Recently, Singapore has been gaining the upper hand.
Hongkongers have watched their fair city lose ground and wondered how much of the problem is due to politics. There has been very little they can do.
Healthy competition benefits both sides.
Whereas Hong Kong has the Hong Kong Sevens, Singapore has the Singapore Rugby Sevens tournament which opens this week.
Inspired by Singapore’s Formula One Grand Prix, Hong Kong is preparing for its first Formula E race to be held later this year.
But a key Hong Kong advantage — financial services — has come into question after Moody’s and Standard and Poor’s downgraded our credit rating.
These moves are seen as a prelude to a further downgrade of Hong Kong’s creditworthiness.
That means it will be more expensive for the government and private businesses to raise funds.
By contrast, Singapore’s top rating is unchanged.
And recently, the Lion City toppled us from the top three in a ranking of global financial centers by City of London Corp. think tank Z/Yen Group Ltd.
I wonder if “Nylonkong”, a portmanteau coined by Time magazine in 2008 for the world’s biggest financial hubs (New York, London and Hong Kong) will soon become “Nylonpore”.
The government should take the rankings seriously. It should start looking for ways to restore our competitiveness as a global financial center.
Z/Yen Group indexed dozens of countries and territories on the basis of their business environment, financial development, infrastructure, human capital and reputation.
We should examine these factors to see how we can improve.
We know it’s not entirely our fault. The index compiler mainly blamed Beijing’s clumsy market rescue for our slide in the ranking.
Unlike Singapore, Hong Kong cannot escape China’s influence on its economy.
For that reason, Hong Kong could also fall in other global indices.
The Communist Party never truly respects market forces. Ultimately, it will pay for meddling in the market.
Shanghai was the best placed mainland city in the ranking, leapfrogging six spots to 16th, but I doubt it will ever make the top three.
This article appeared in the Hong Kong Economic Journal on April 12.
Translation by Frank Chen
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