Hong Kong has traditionally had a very laissez-faire approach to its economy. That very different from Singapore. In Singapore they e very proactive, because they understand that if they want to build the financial industry then they e got to get the talent base.
The decades-old rivalry between Hong Kong and Singapore has taken on a fresh urgency with the growth of Chinese offshore investment. The financial services industries in both cities are undoubtedly well-placed to benefit, but many argue that only one can rise to the top.
It is unusual for two offshore jurisdictions to compete so directly, but Hong Kong and Singapore are unique among international financial centers in a number of ways.
Yet Hong Kong and Singapore not only managed to hold their own standings, but actually increase their might. They are now the third and fourth most influential global financial centers, behind only London and New York.
Certain fundamental factors help explain why both Singapore and Hong Kong are rising. The most important is their geographical and political proximity to the emerging economic giant in their backyard, particularly China. As the developed world struggles with a slow recovery following the global economic downturn, emerging markets, and China in particular, are booming. Both cities are benefitting as capital targets East Asia.
Second, both cities have the necessary financial infrastructure to support complex financial instruments, something not often found in traditional offshore jurisdictions. Offshore financial structures are definitely becoming more complex and sophisticated, and many have multi-jurisdictional requirements.
