Singapore-Hong Kong Rivalry Builds
Singapore-Hong Kong Rivalry Builds
Jun. 19, 1999
SINGAPORE (AP) _ In Singapore's quiet crosswalks, pedestrians watch digital displays count down the seconds before the ``don't walk'' signal.
In Hong Kong, blaring horns and jaywalkers rule the streets. Singapore-style controls are unthinkable amid a frenzied, no-questions-asked capitalism, unchecked by the territory's handover to China in 1997.
As Asia starts shaking off a two-year economic slump, these two very different cities are revving up their old rivalry to become Asia's top business and financial hub.
The outcome could nudge much of Asia toward the American-style, wide-open policies pursued by Hong Kong, or toward Singapore's meticulously controlled approach, executives and analysts say.
Many claim Hong Kong has an overwhelming built-in advantage, with an economy twice as big as Singapore's and the mammoth China market next door. But others insist that clever micromanagement by Singapore's government gives this city the edge.
``I really enjoy the working environment here in Singapore. It's effective, effective, effective,'' said Tobias Pelzer, Singapore managing director for the German software firm Netlife, which made the city-state its Asian headquarters last year.
``I got off the plane here once as the first or second person. I came to the belt and my suitcase was there. How do they manage that?'' Pelzer said.
Singapore leaders say such efficiency comes largely from strict regulations. They pervade nearly every aspect of Singapore society.
In Hong Kong it's a different story.
``This is such a cowboy town. I could probably print up business cards labeling myself as a brain surgeon and talk my way into an operating room,'' said Mike Carlson, managing editor of the Hong Kong lifestyle weekly HK Magazine.
Carlson, who has lived in both cities, said Hong Kong's grimy bustle and cramped living conditions sometimes leave him pining for Singapore's cleaner air, cheaper rents and elegant streetside cafes.
``But Singapore is a more sheltered place,'' Carlson said. ``You can get into a rut.''
Singapore leaders argue their country's enforced calm helps lure headquarters of big corporations, whose management and expatriate staff like things quiet.
The country's unions are government-friendly. Rich, hugely successful government-linked corporations dominate the economic landscape.
Singapore's government last year slashed pensions and pay by a total of 15 percent _ drawing only quiet resignation from the populace. Rowdy strikes and public demonstrations are not tolerated.
In contrast, Hong Kong's Cathay Pacific Airways was forced to cancel hundreds of flights and stop taking bookings in late May, when pilots went on sick leave to protest pay cuts and layoff threats.
Hong Kong residents tend to shun the red tape and social controls that are a way of life in Singapore.
Its people ``don't have to please the government. They don't have to compete against any nationalized, subsidized companies,'' said Clement Cheung, director of the Hong Kong Economic and Trade Office in Singapore.
``People who are weak will end up being strong in this environment,'' he said of Hong Kong. ``Because if they don't, they're going to die.''
Thousands of small entrepreneurs find it easier to flourish in hands-off Hong Kong and this draws in banks, telecommunications firms and other big service providers, said Michael Enright, an economist at Hong Kong University.
``Lots of Hong Kong firms have no fixed assets other than a cellular phone. You go in in the morning and you're registered as a company by afternoon,'' Enright said.
Hong Kong's tax rate is fixed at 16.5 percent. Singapore's is 26 percent. But Singapore selectively offers huge tax cuts to companies that locate their headquarters on the island.
Hong Kong is also simply bigger. Its stock market capitalization was $433 billion at the end of 1998, while Singapore's stood at $199 billion.
The total value of Hong Kong's imports and exports in 1998 was $618 billion, while Singapore's was $208 billion, according to government statistics.
With the worst of Asia's crisis apparently past, both cities are showing signs of reheating their competition.
Singapore is cautiously letting foreign competitors into its banking and telecommunications sectors, and establishing a billion-dollar fund as seed money for high-tech entrepreneurs.
Hong Kong is converting its taxis to burn liquefied petroleum gas to fight worsening pollution, and is holding talks with Walt Disney Co. about building a theme park. It also set up its own multimillion-dollar fund for high-tech firms.
Singapore last year announced plans to build Science Hub, an Asian Silicon Valley with ready-made research space, offices, residential units and nightspots.
Hong Kong responded in March with plans for its own version, dubbed Cyberport.