Hong Kong is up in arms and airing signals of an economic turmoil, sending investors wary of their capital. Watching the developments in the vicinity is Singapore, which merits and matches the virtues of a market-centric and capital-driven Chinese haven for investors. But Singapore is not amused to see the unrest in Hong Kong either.
Hong Kong's financial markets are witnessing a most volatile trend due to visible domestic political unrest in the island, coupled with a vivid impact of a trade war between mainland China and the United States. Not far, the local dollar has weakened considerably and the Hang Seng Index reported a loss of nearly 9% since June, indicating this quarter to become the worst in four years, reports Bloomberg.
The value of retail sales dropped for a fifth straight month in June, sending the city retailers watch a straight 50% decline in August sales, setting off a roller-coaster drive down. Hong Kong's Retail Management Association on Thursday asked landlords to halve rents for six months to help tenants wade through the difficult period.
Seeing the unrest, some wealthy businessmen based in Hong Kong had reportedly begun moving their assets overseas, said media reports, pointing out that Singapore in the region would be a beneficiary, providing a far better experience to investors. But Singapore's Minister for Law and Home Affairs K Shanmugam has categorically dismissed such reports as "superficial talk."
"We benefit from 'stability' across the region, including Hong Kong. If China does well, Hong Kong does well, the region does well, we do well. There's no profit in seeing instability. And if Hong Kong is at odds with China, it's a problem for everyone, including us," he said.
The minister said Hong Kong possessed inner strengths in terms of its financial system, stock exchange and proximity to mainland China. The minister drew a line when it comes to comparing Hong Kong with Singapore.
"If this happened to us, it would be bad for our economy and we don't have the advantages Hong Kong has to weather such a situation. Hong Kong has the huge advantage of China's support. Singapore has no one to support it," he noted in an interview with This Week in Asia.
