S'pore benefits from unrest in Hong Kong, but is careful not to be seen as profiting: Ex-diplomat

He says Singapore's good governance enhances its role as a global financial centre, but big firms still prefer Hong Kong.

Kayla Wong | October 10, 2019, 03:04 PM

China's Special Administrative Region (SAR) of Hong Kong has been plagued by protest unrest for the last 18 weeks.

As Hong Kong's stability is being shaken to the core, investor confidence in the city has been affected.

A number of Singaporean politicians have weighed in on the matter, answering the question on the top of many Singaporeans' minds: Does the political instability in Hong Kong affect Singapore, and how?

Instability in Hong Kong negatively impacts Singapore

Local ministers have cautioned Singaporeans of the adverse impact on the country should the situation in Hong Kong persists.

Minister for Trade and Industry (MTI) Chan Chun Sing said in Parliament on Sep. 2 that continued disruptions to Hong Kong's stability will eventually have a larger negative spillover on Singapore due to the close ties between both cities.

Singaporean businesses with operations in Hong Kong might also see a greater negative impact, he said.

Businesses thinking about relocating to Singapore

However, there are reports that perhaps point to a possibly different outcome.

A survey conducted by the American Chamber of Commerce in Singapore (AmCham) revealed that of the 24 percent of 120 businesses which are thinking of moving out of the city, 91 percent of them are looking at Singapore.

The survey further revealed that regardless of whether they were moving or not, most of the firms thought the protests were economically beneficial for Singapore.

No schadenfreude among the Singapore establishment

Nevertheless, Singaporean officials have adopted a solemn tone to the situation in Hong Kong, and exercised caution in not giving off the impression that the city-state is gloating at Hong Kong's misery.

Minister for Home Affairs and Law K Shanmugam, in an interview with Lianhe Zaobao and South China Morning Post, said he does not believe in "superficial talk" that Singapore benefits from Hong Kong's problems.

He added that the city-state benefits from stability across the region, and that there is no profit in seeing instability.

"If Hong Kong is at odds with China, it's a problem for everyone, including us," he said.

Singapore benefiting from Hong Kong?

Not all Singaporeans have the same view, however.

KB Teo, a former career diplomat who served in the Singapore Embassy in Cairo who had also worked in banking, posited that Singapore "can expect to benefit from the unrest in Hong Kong".

In a commentary he wrote for the S. Rajaratnam School of International Studies, Teo said Singapore's reputation for "good governance, stability, and strongly pro-growth policies" enhances its role as a "global private banking centre".

However, he opined that big firms "still prefer Hong Kong", as the city has "very good connections" with other global financial hubs.

Nevertheless, Teo said Singapore is "careful not to be seen as profiting from Hong Kong's plight".

You can read his entire commentary on Hong Kong here, where he elaborates on what he thinks are Beijing's options to respond to the crisis.

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Top image by ANTHONY WALLACE/AFP/Getty Images