Hong Kong and Singapore have been competing for a long time in the ranking of international financial center cities, and both cities are vying to be the third international financial center after New York and London, which is also competing for the right to speak in the international financial market. When the rankings of domestic and international think tank institutions are won in each city, from the comparison of the leading projects in each subdivision from 2021 to 2023, there is an answer to who deserves the name.
Leading Projects in Hong Kong:
Securities institutions – As of the end of 2023, there were 3,257 licensed securities institutions in Hong Kong, higher than Singapore.
Insurance business coverage – In 2023, Hong Kong will lead major financial centers in terms of insurance density and depth, and its life insurance density will rank first in the world. Although the number of insurance institutions is lower than that of Singapore, Hong Kong's insurance market has a significant advantage over Singapore's.
International bonds – Hong Kong is Asia's largest international bond issuance centre, with US$175.4 billion in new international bond issuance in 2023, higher than Singapore and Japan. Since 2013, Hong Kong has been the largest issuer of international bonds in Asia, with 30% of international bonds in Asia and 5% of Singapore's share in 2022. In terms of the choice of location for the issuance of Asian international bonds in the past 17 years, 56% of the initial issuances were arranged in Hong Kong and 27% in Singapore.
IPO - Hong Kong stock market IPO financing is leading, from the perspective of the primary market, since 2009, Hong Kong stock IPO financing has ranked first in the world for 7 years. From 2013 to November 2023, Hong Kong is second only to New York and ahead of London in terms of the number of newly listed companies and the amount of funds raised. Singapore's equity market financing function is significantly different from that of Hong Kong.
Fintech – According to the 2022 "Smart Centre Index" released by the British think tank Z/Yen, Hong Kong ranked 3rd and Singapore ranked 12th.
Offshore RMB – Hong Kong is the world's largest offshore RMB market with the largest offshore RMB liquidity pool, with a RMB deposit balance of RMB954.7 billion in January 2024 and more than one trillion yuan at the end of 2014 and early 2022. In terms of offshore RMB foreign exchange transactions, Hong Kong ranked first in the world in 2010, 2013, 2016, 2019 and 2022 with an average trading volume of 36.3%, 43.4%, 38.6%, 41.5% and 28.2% respectively, while Singapore ranked third below London. Hong Kong ranks first in the world in offshore RMB deposits, with the balance of RMB deposits increasing from RMB12.127 billion in 2004 to RMB832.963 billion in April 2023, and the number of institutions authorized to operate RMB business has expanded from 32 to 141. At the end of March 2023, Singapore's RMB deposit balance was $173 billion, much lower than Hong Kong's.
Family offices – At the end of 2022, the number of single-family offices in Hong Kong was 2,703, up from 1,100 in Singapore during the same period, but the number of Chinese billionaires who go overseas is preferred to Singapore over Hong Kong, and the data so far in 2023 may have reversed.
Asset management and wealth management – At the end of 2022, Hong Kong's assets and wealth under management stood at US$3.trillion, up from US$3.7 trillion in Singapore during the same period, but Singapore's net inflows were better, with a small gap.
Total assets of the banking system – As of September 2023, the total assets of the banking system in Hong Kong and US$2.59 trillion in Singapore are US$2.59 trillion. The number of top banks and total assets in Hong Kong are higher than those in Singapore.
Equity market size – As of September 2023, the total market capitalization of the Hong Kong Stock Exchange is US$4.10 trillion and that of the Singapore Exchange is US$621.3 billion. As of the end of 2023, there were 2,609 listed companies in Hong Kong, with a total market capitalization of US$4.0 trillion, and the stock market turnover in 2023 was US$2.3 trillion, lower than that of New York and Shanghai. Compared with Singapore, Hong Kong has a significant scale advantage in terms of the size of the stock market.
Leading Projects in Singapore:
Rule of Law Index – According to the 2023 Rule of Law Index published by the international rating agency "World Justice Project (WJP)", Singapore ranks 17th and Hong Kong ranks 23rd; In terms of order and safety, Singapore ranked 3rd and Hong Kong ranked 6th; In terms of integrity, Singapore ranked 3rd and Hong Kong ranked 9th. Singapore is also more popular in arbitration than Hong Kong.
Liberal policy regime – one of the sufficient conditions for the convergence of international funds, Singapore was the first to endorse the Bank of America in its first Asian currency unit (ACU), successfully creating the Asian dollar market.
Financial Institutions – As of February 2024, there are 177 internationally recognised financial institutions in Hong Kong, with total industry assets of US$3.45 trillion, which is lower than that of Shanghai and Singapore.
Number of insurers – As of the end of 2023, the number of insurers in Hong Kong is lower than in the US, UK, Singapore and other places.
According to the 2023 World Competitiveness Yearbook, Singapore ranks first and Hong Kong ranks third in terms of tax policy performance.
Green Finance – According to the 2022 "Green Finance Index" released by the British think tank Z/Yen, Singapore ranked 16th and Hong Kong ranked 39th.
Safe and livable/attractive to international talents: Singapore and Hong Kong are not in the top 20 in the global city quality of life rankings, Singapore is dozens of places ahead of Hong Kong, and the high cost of housing is the reason for Hong Kong's low ranking. According to ECA International, Hong Kong ranks 77th in the world in the 2023 liveability index, behind major financial centers such as Singapore (1st) and Tokyo (2nd). Hong Kong's latest house-price-to-income ratio of 28.4 is lower than that of Shanghai and Beijing, and much higher than that of Singapore, London, New York and Tokyo.
Foreign exchange trading - According to the latest report of the Bank for International Settlements (BIS) triennial Foreign Exchange and OTC Derivatives Trading Market Survey, Singapore ranks third with a scale of US$929 billion, and its share of global foreign exchange trading volume has increased from 8% in 2019 to 9%; Hong Kong ranked fourth with US$694 billion, and its share of global foreign exchange trading volume fell to 7% from 8% in 2019.
Hollowing out of the industry - Hong Kong's tertiary industry accounts for more than 93%, while Singapore's is 75%, and Hong Kong lacks a real industrial base. The cargo throughput of the Port of Hong Kong is lower than that of the Port of Singapore.
The above-mentioned project data in the financial sector are roughly taken from 2021 to 2023 and the first quarter of this year, and individual values may vary due to caliber, and do not fully cover all subdivisions of the financial sector, and are only used as part of the evidence of the financial strength of Hong Kong and Singapore.
The competition in the financial field will not be a simple sharp rise and fall, but the project with little lead is very likely to change positions in an instant, and the advantages of Hong Kong and Singapore's financial field are roughly in a state of one or the other, and many times the two sides have slight differences in scores, and there are often rankings swapped.
As an international financial center in the Asia-Pacific region that emerged at about the same time, competition between Hong Kong and Singapore is inevitable. Singapore, which is more liberal, has great advantages in terms of institutional liberalization, asset management institutions, sources of funds, and high-net-worth customers, and has developed faster; Hong Kong has traditional advantages in the banking, insurance, equity and bond markets, and its fundamentals are more stable. Corresponding to Singapore's geographical advantages, Hong Kong's dominance in offshore renminbi can be offset by it.
So, who is advocating for Singapore to replace Hong Kong?