Prolonged turmoil in Hong Kong could jeopardise regional financial stability, and that would outweigh any short-term gain for Singapore from flows of funds from investors worried about protests there, a Singapore government minister said.
Two months of increasingly violent protests have embroiled Hong Kong in its worst political crisis for decades after what started as an angry response to a now-suspended extradition bill.
Some tycoons in the Chinese-ruled financial hub have moved funds or are considering doing so, while the unrest has also encouraged some wealth managers to choose to set up in Singapore instead of Hong Kong, Reuters has reported.
But Singapore’s minister of law, K Shanmugam, told Reuters in an interview on Wednesday that stability was crucial. “In the longer term, if you take a strategic view on these things, Singapore benefits if there is stability across the region, including in Hong Kong,” he said.
“Short-term benefits through instability in Hong Kong are outweighed by longer-term disamenities and longer-term structural problems that might arise if there continues to be instability in Hong Kong, or in any other major economy,” Shanmugam said.
Singapore and Hong Kong, both former British colonies, compete fiercely to be considered Asia’s premier financial services centres but nevertheless, Singapore wanted to see business as usual in Hong Kong, Shanmugam said.
“From a strategic perspective, I’d rather see that Hong Kong reverts to how we all know Hong Kong to be,” he said.
Shanmugam said Hong Kong’s proximity to China, meant it had a key role to play as a financial services centre, while Singapore is seeking to build on its status as a leading legal infrastructure hub.