Hong Kong's Loss is Singapore's Gain

Hong Kong's reputation as an international city is waning

US lawmakers are proposing sanctions against Hong Kong officials, but this may result in those involved in national security trials be tried across the border in China.

Tam Yiu-chung, the former sole Hong Kong member to the National People's Congress Standing Committee said on Tuesday that the bill might "force" the government to transfer cases to the mainland to avoid foreign interference.

Singapore is gaining more multinational firms

Currently US congressional members have proposed sanctions against 49 city officials, judges and prosecutors.

Hong Kong deputies to the NPC have issued a joint statement, saying the American politicians' "despicable and shameful act would be in vain."

The political posturing may gain brownie points, but economically it is yet another sign for companies to think twice about staying or setting up in Hong Kong.

A recent article in the Straits Times in Singapore reveals that many multinational companies have moved to the Lion City. It says the number of global companies with headquarters in Hong Kong have fallen around 8.4 percent since 2019, but the number of staff employed by these firms have dropped by 30 percent in the same period. 

That's because these companies have moved most of their operations to Singapore, like logistics giant DHL. It made the move after experiencing Hong Kong's stringent restrictions during the Covid-19 pandemic that practically shut down the city for three years.

Firms in HK fell, along with employees

"During the pandemic, we learnt that we can't put all our eggs in one basket... If a location gets shut down, we can't fulfil our jobs. So, through our multi-hub strategy, we are able to have alternatives," said Christopher Ong, managing director of DHL Express Singapore.

Another company that moved is British American Tobacco, National Australia Bank, MNC Westpac Banking Corporation, and Royal Bank of Canada. 

Along with the companies, some employees along with their families have quietly moved to Singapore too.

Nevertheless, while multinationals have left or decreased their presence in Hong Kong, mainland firms have moved in, increasing by over 30 percent in the past four years. By the end of 2022, the number of Chinese companies regionally headquartered in Hong Kong had surpassed that of American companies with regional hubs in the city for the first time in at least 30 years.

Why this massive shift?

"Singapore controls its own destiny [while] Hong Kong's destiny will be shaped by Beijing, with all the benefits, opportunities and challenges that that implies," said Curtis Chin, inaugural Asia Fellow of the Milken Institute, and former US ambassador to the Asian Development Bank.