According to Minister K Shanmugam, the economies of Hong Kong and Singapore are closely connected.

Singapore’s Minister for Home Affairs and Law says he is ‘bemused’ by suggestions that Hong Kong is in terminal decline

Speaking at the Post’s China Conference: Southeast Asia in Singapore, Shanmugam added his view was premised on there being no major external disruptions

A top Singapore minister on Wednesday sought to dismiss the view that Hong Kong and the Southeast Asian city state were locked in a zero-sum rivalry, saying instead that both economies were “intertwined”.
Speaking at the Post’s China Conference: Southeast Asia in Singapore, Minister for Home Affairs and Law K Shanmugam said he was also “bemused” by suggestions that Hong Kong was in terminal decline.
“Many of the factors necessary for Hong Kong to continue to succeed are present,” he said.
In his 20-minute speech, the Singapore minister said he believed the Hong Kong government was maligned by some international media outlets for its efforts to restore order during the 2019 political turmoil.

Hong Kong’s Financial Secretary Paul Chan Mo-po, who was also at the conference, acknowledged Shanmugam’s remarks in his keynote speech, saying the slant in media coverage was ultimately down to “ethics and integrity”.
“At the end of the day, even if we have strong economic growth, that won’t be able to sustain us. We need to have strong values, strong morals. And I’m sure, this region is the region for tomorrow,” Chan said, briefly going off-script during his speech.

Shanmugam said Hong Kong had strong links and close financial integration with the Chinese mainland, which had helped the city become one of Asia’s largest equity markets.
“Beijing wants Hong Kong to succeed and that counts for a lot,” he said.
The gross domestic product of the Greater Bay Area was around US$2 trillion, he said, and “Hong Kong is in the middle of that vibrant economic region”.

Shanmugam also took aim at narratives portraying Singapore and Hong Kong being economic rivals, saying that such views were built on the premise that each could “only benefit at the other’s expense”.
Shanmugam said the reality was “rather less dramatic” and that each city had its own strengths. Instead, with both economies “closely intertwined” and both major trading partners with one another, “both of us (Singapore and Hong Kong) benefit from each other growing, and bringing vibrancy to this entire region”.

More than 200,000 expats and Hongkongers left the city between mid-2020 and last summer, escaping prolonged pandemic restrictions that were increasingly out of step with the rest of the world.
Observers, citing anecdotal evidence, had said a large proportion of top-tier professionals who left Hong Kong moved to Singapore. The two cities have for years been seen as Asia’s premier financial hubs.
“The suggestion that Singapore has supplanted Hong Kong gives too much weight to short-term factors,” Shanmugam said. “I believe that smart money will look beyond the media narratives and the effects of periods of transitions. And they will know that the trend for Hong Kong is clearly up.”
He described Hong Kong as a city that was “more integrated with the mainland politically and economically” and would “compete with other Chinese cities”.
“With China and Hong Kong reopening, confidence is returning. Some of the broader geopolitical challenges … have no easy answers in the near horizon. They depend on the US and China in finding some accommodation.”
He noted however that his view was “premised on there being no major disruptions, internal or external, like a war or major political upheavals. And the same goes for Singapore”.

The minister, one of Singapore Prime Minister Lee Hsien Loong’s key lieutenants, also weighed in on media coverage of Hong Kong’s 2019 political turmoil, saying he believed international media coverage of the protests were biased.
“My view is that Hong Kong has been a collateral casualty of an anti-China mood in some parts of the world and in their media,” Shanmugam said.
He noted that media coverage had shown police law and order actions were deemed an attack on democracy activists, while those who damaged property and attacked the police were celebrated as democracy activists.
“The hypocrisy in all of this – not many commented about the lack of democracy in Hong Kong until 1997, or that it did not affect Hong Kong’s success and vibrancy. After 1997, many had a sudden attack of democracy consciousness.”

Meanwhile, Shanmugam said the economic trend for the region indicated there was “only one way up”, but he said the rise of protectionism was concerning.
“There are many attempts to roll back globalisation and free trade, the splintering of supply chains, the onshoring even when the costs are higher, the French offering outright protectionism, the forming of antipathic trading blocs, and the rise of populism which drives some of the above.
“The risks are serious. We see the world being seen as divided into two blocs, with a Global South watching anxiously,” he said. “The world can easily slide into a global conflict … It is going to require responsible leadership on all sides to make sure that tensions are managed.”

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