Singapore vs Hong Kong: Which city is better for business?

Operational costs there are twice as high.

Singapore is often pitted against Hong Kong when it comes to business competitiveness in the region.

A report by Dezan Shira & Associates explored how both cities stacked up against each other, and discovered Hong Kong remains the best hub when it comes to doing business in mainland China but Singapore remains extremely attractive due to its wider Asian reach.

Singapore also gets the upper hand in terms of long-term growth plans, as the city-state has a “very specific” long-term strategy which appears to be lacking in Hong Kong.

“Hong Kong remains a service center and gateway for China, however, in my view there are serious questions to be asked concerning existing policies as concerns its positioning as a regional hub, and especially so when compared with Singapore. Hong Kong appears not to have been provided with any visionary plan to take it forward as an Asian service center, other than loose plans to integrate it into the Pearl River Delta and use it as a hub for generating investment capital for Chinese companies listing on its bourse,” said said Chris Devonshire-Ellis, the report’s author.

“Singapore meanwhile has positioned itself as the gateway to Asia, and followed this through with very specific plans and a long-term strategy. Whereas Hong Kong has embraced China, Singapore has embraced a rather more diverse Asia, and in doing so has made itself a melting pot of pan-Asian languages and culture, and especially so within ASEAN, something Hong Kong has singularly failed to do,” he added.

Although both cities have competitive economic environments, doing business in Hong Kong is much more costly compared to Singapore.

“The two cities remain competitive in terms of economic environment, such as tax rates and so on, although operational costs such as rental in Hong Kong are double the price of Singapore. But it is Singapore that has developed as a true Asian regional hub, leaving Hong Kong to deal almost exclusively now with China, and far from certain about its own destiny,” he noted.

“In conclusion, Hong Kong despite its issues, currently remains the best services hub for dealing with mainland China, although Shenzhen may now start to be considered as a viable alternative. Singapore though is a superior services hub for dealing with ASEAN, with the clinching argument for either being proximity of markets, but also language capabilities and the wealth of local experience towards the respective target markets possessed uniquely in each,” Devonshire-Ellis said.