This article originally appeared on VICE Asia
Hong Kong and Singapore have long been known as two of the four “Asian Tigers,” or the high-income economies of Asia. Now, one may have the chance to surpass the other. As Hong Kong feels the weight of its ongoing political crisis, all eyes are on Singapore to become Asia’s top financial hub.
Private bankers have reportedly been swarmed by questions from Hong Kong’s investors, all of whom are concerned about the long-term repercussions of the Chinese territory’s recent protests over an extradition bill.
For weeks, hundreds of thousands of protestors pushed back against China’s influence over Hong Kong and its potential loss of autonomy. The protests have resulted in the bill getting shelved. The last of the demonstrations, which took place on July 14, erupted in a violent clash between protesters and the police.
Despite the win, Hong Kong is still in a state of unrest – and this is most clear when it comes to its status as a dominating economic force in Asia. The wealthiest investors on the island have been looking to set up their money on a different island altogether.
“Hong Kong has shot itself in the foot. Can you imagine Singapore allowing this?” said David Chong, the chairman of Labuan, an independent trust company.
Speaking to Bloomberg about the rippling effects of Hong Kong’s ongoing protests, Chong disclosed that family offices which manage at least $200 million in assets are now looking to base themselves in Singapore over Hong Kong.
Another major Asian wealth manager admitted to seeing a large flow of money coming to Singapore from Hong Kong over the past few weeks. He chose to remain anonymous to Bloomberg, citing the delicacy of the issue. A private banker based in Hong Kong said that these individuals are generally those with assets in the $10 million to $20 million range.
“We’ve received increased amount of client inquiries about the Hong Kong situation in the past weeks,” said Lawrence Lua, the deputy head of the Development Bank of Singapore.
Singapore may be the obvious choice as a new home for this money – and for more than one reason. The island holds political stability as well as proximity to China. Singapore’s asset management industry is currently valued at $2.4 trillion. However, the Monetary Authority of Singapore, does not wish to portray that Singapore is benefiting so obviously from Hong Kong’s turmoil. They told Singapore’s financial institutions to not make the matter public.
Hong Kong residents are most apprehensive about keeping their money safe in the city for years to come, especially as the civil unrest has invited uncertainty about the future of the city’s political stability.
This uncertainty is carrying over to what the impact of these protests will be during 2047, the year in which the “one country, two systems” policy between China and Hong Kong is set to expire. Investors worry that, when the time comes, Hong Kong will no longer be the right place to keep their wealth.