Eric Chin: Hong Kong’s possible loss of special status reiterates Singapore’s stability

ERIC CHIN

Hong Kong’s possible loss of special

status reiterates Singapore’s stability BY ERIC CHIN Chief Business Development H ong Kong has taken a series of unfavourable hits in the last year, their unfortunate magnitude clear to see for the watching eyes of the world. The latest Officer, InCorp Group of which is United States Secretary of State Mike Pompeo publicly stating that the country no longer considers Hong Kong to be adequately independent from China.

Whilst just a statement at this stage, sadly there will almost certainly be ramifications for Hong Kong’s reputation as a global investment bridge between East and West. The world’s two biggest superpowers are playing a game of geopolitical chess, and Hong Kong is in danger of being an involuntary pawn on the board.

Looking from the relative stability here in Singapore, It’s a real shame for Hong Kong on many levels. Singapore and Hong Kong have long shared a connection as the two places to be in Asia for foreign investment, and it has been difficult to watch Hong Kong slide from its once proud position as the freest economy in the world. Reports say that deposits have been moving from Hong Kong to Singapore.

It’s that declining freedom, most recently in the form of China’s national security law, that has caused the US to However we cannot ignore the reality of Hong Kong’s publicly state it is not satisfied with Hong Kong’s ability to loosening grasp of its own destiny — businesses will surely be remain independent from Chinese rule. looking for alternative safe haven in the region in the future.

Whilst I doubt much will change in the immediate future, I believe Singapore must continue to step up to support the US may have to treat Hong Kong as part of the Chinese businesses in the region, and provide refuge for any business Mainland, rather than an independent region. Among other compelled to relocate. High net-worth families who are things, this will mean that the US will revoke Hong Kong’s keen to diversify their wealth will be well supported by the special status afforded to them in 1992, which has allowed mature and highly trustable banking and wealth management them to bypass tariffs put on the Mainland. platforms in Singapore.

China has already threatened to “take strong We have the capacity, and we have the infrastructure. countermeasures” if the US is judged or considered to be Singapore is the number two nation on earth to do business interfering with its sovereignty, and so the tumult would only with according to the World Bank. We are the most grow stronger from there. China will most likely want its competitive country in the world according to IMD Business preferred form of near-total autonomy over the Hong Kong School. We are ranked number one in the 2015 OECD Global economy, and foreign businesses may well be regulated and Education Report. Not to mention, Singapore is just a superb controlled accordingly. place to live.

We have to remember too, that Hong Kong will be hurt Many of the businesses we’ve helped move into Singapore most of all out of the three parties, whilst the much larger are putting more and more emphasis on the need for political and battle-hardened US and China continue their economic and social stability, and that’s something Singapore can be very and political wrestle. For China, capital of the political proud to offer. Also, we cannot ignore the fact that Singapore variety in Hong Kong is far more important than the remains an attractive financial hub in Asia due to many economic capital. reasons other than political stability.

This will surely make the 9,000 foreign companies in Whilst we all hope for the best for Hong Kong’s future, I Hong Kong justifiably nervous, as the inherent advantages of know Singapore will be waiting and willing to embrace any accessing the Chinese Mainland through Hong Kong slowly business that is looking for safe harbour. start to slip away. As the business environment has highly transformed in

Hong Kong’s Hang Seng Index (HSI) echoed that fear Singapore, the incorporation process is smooth and foreigners almost immediately after China’s announcement of the can look forward to setting up businesses here in a matter of a national security law, enduring its worst day since 2015. If few hours, if all documents are in place. Foreigners setting up the US actions start to mirror their statements, I can only a company in Singapore, are required to engage a corporate assume things will get worse. service provider to assist with the process.