While China has a huge presence in the Far East, it is essential to note the position and influence of Hong Kong and Singapore. Commonly referred to as the "Asian Tigers of Finance", these cities have transformed into global financial powerhouses. Only when you look at their prominence and influence in more detail do you realise how important they are to the APAC region.
Historical Context
Hong Kong and Singapore were once part of the British Empire, but Hong Kong is now a special administrative region in China, and Singapore is independent. Historically, Singapore was seen by many as a more influential powerhouse in the area. However, various elements of life in both cities are still heavily influenced by their history, although they are recognised as critical financial hubs in their own right.
Geographic Advantage and International Connectivity
If you look back at the history of the APAC region, you will notice that Singapore and Hong Kong were seen as natural gateways for trade and finance between the East and West. In more recent times, there has been massive investment in international airports and ports, facilitating business connections and enhancing global trade.
Economic Liberalisation and Business-Friendly Policies
It is safe to say that Hong Kong and Singapore are supportive of both the business sector in general and, more specifically, financial services. Tax incentives, business-friendly regulatory frameworks and an appreciation of new technology and investment trends have certainly put both of them on the map. In many areas, such as cryptocurrency, the two are going head-to-head to be the leader in the Far East.
Financial Services and Diverse Offerings
The Hong Kong Stock Exchange and the Singapore Exchange are prominent in the APAC region and globally. Many see these two particular stock exchanges as an entry point for global investors. They are both strong in international banking, asset management, insurance, FinTech and wealth management and have deep capital markets supporting IPOs.
Wealth Management and Private Banking
Popular amongst European and American high-net-worth individuals and businesses, Hong Kong and Singapore have well-developed wealth management and private banking sectors. Indeed, in the last few weeks, the Hong Kong authorities have announced new regulations to attract more family offices.
Fintech and Innovation
Recent focus has been on FinTech and innovative ecosystem/ESG-related investment, but this is just the tip of the iceberg. These two cities are now seen as prominent FinTech hubs with governments that are very supportive of new technology, innovation and, more recently, sustainable investment. The introduction of cutting-edge trading systems has also increased interest in many areas of the financial market. For example, a significant element of global cryptocurrency trading recently switched from the stricter regulatory framework of the US to Hong Kong.
Internationalisation and Global Connectivity
For many people, Hong Kong and Singapore have the best of both worlds, a prominent position in the APAC financial sector and cultures which attract Europeans and Americans. These are cities which embrace internationalisation, welcoming foreign investors and multinational corporations – with both cities boasting hugely diverse employment talent pools.
Conclusion
The reputations of both Hong Kong and Singapore have benefited from their strategic locations and prominence in the world of global trade. However, there is much more to their success, such as business-friendly policies, strong financial infrastructures and relatively calm political landscapes. Hong Kong and Singapore have always been open to new technologies and investment trends, such as cryptocurrencies, further strengthening their global standing.
For many worldwide investors looking inwards from afar, Hong Kong tends to grab the headlines but do not underestimate Singapore's power, influence and forward-thinking nature.