An Inwardly Focused Hong Kong: A Strategic Advantage for Singapore?
As Hong Kong’s leadership comes under increasing pressure from Beijing to double-down on its COVID-19 containment strategy, Singapore finds itself in an opportunistic position. Amidst a mass exodus of businesses and expats from Hong Kong, Singapore stands to regain its status as the leading Asian global trade hub through strategically implemented border control measures known as “Vaccinated Travel Lanes (VTLs”), which allow for quarantine-free travel for fully vaccinated travellers from an increasing number of major cities and trade hubs. These VTLs remain a crucial lifeline as Singapore moves toward COVID-endemicity.
As the ongoing COVID-19 pandemic extends into its second year, Hong Kong’s divergent reopening strategy risks relegating the city’s reputation as an open and prosperous trade hub to neighbouring rival, Singapore. While the rest of the world seeks to expedite the reopening of its borders to welcome tourists, trade and restore an element of pre-pandemic normalcy, Hong Kong remains committed to its COVID-zero strategy which is driving key investments and talent away from the former British Colony.
Living with COVID
Singapore, its closest trade competitor in Asia, has chosen to abandon its COVID-zero strategy in favour of a ‘live-with-COVID’ approach amidst plans for a transition to COVID-endemicity. The city state has since launched a series of ‘travel bubbles’ known as “vaccinated travel lanes (VTLs)” with an increasing number of major European, American, Australian, and Asian cities.
Singapore Changi Airport
With daily quarantine-free flights from London and multiple daily flights to various American states including New York and San Francisco, numerous Hong Kong expats mull over their decision to remain in the city, which continues to impose drastic 14 to 21-day quarantine requirements for all inbound travellers, regardless of vaccination status.
COVID-Zero Approach
Hong Kong’s government, which remains beholden to Beijing’s policies, is bent on eliminating the virus, no matter the costs, economically or otherwise. While the rest of the world laments an economic slowdown which has seen thousands of businesses shut and millions lose their jobs, Beijing’s COVID-zero strategy has conversely won itself the support of mainland Chinese citizens, many of whom remain fiercely opposed to any exposure to the virus, vaccinated or otherwise. Such sentiments further cement Beijing’s increasingly inwardly focused reputation on the global stage.
China’s COVID containment strategy
Thousands of business executives and expats have chosen to pack up and leave Hong Kong, having not returned home for close to two years. Many of these multinational companies and their executives, which for months have contemplated moving its operations out of the city amidst a China-imposed national security law, are facing increasing pressure to relocate their operations before it finds itself in a disadvantageous position amidst a rapidly reopening Asia. The clear absence of a clear transition plan for reopening has further eroded Hong Kong’s position as a global trade hub.
Opportunity
Singapore, a global trade hub which sits just a stone’s throw away from Hong Kong has seen ever-increasing interest from these businesses and their executives who remain keen to move to a more welcoming, open and porous business environment.
The Singapore government is well aware of increased interest from regional businesses which have operated in cities ravaged by COVID-related deaths and overwhelmed healthcare systems. Despite clocking thousands of COVID-cases daily, the situation in Singapore remains firmly under control, under a leadership which has sought to undertake a “carefully calibrated” reopening through incremental (and occasionally cyclic) easing/tightening of restrictions as far as possible.
COVID-19 Safe Management Enforcement in Singapore
As the Beijing-influenced Hong Kong government continues to aggressively pursue its COVID-zero strategy, Singapore is in an opportunistic position, where it is able to attract swathes of business and employees seeking to relocate to a friendlier operating environment. It remains unclear how much longer the Chinese government intends to focus itself inwardly, but such an economically costly strategy seems to be a timely opportunity for Singapore to regain its position as a global trade hub, in a rapidly reopening post pandemic world.
Looking Ahead
Singapore remains committed to its reopening strategy, despite facing an initial backlash from a proportion of its local population when first announced in July 2021. It’s aggressive push for quarantine-free travel with major global trade hubs such as the US has been acknowledged to be top on the Government’s agenda, especially when large numbers of high-revenue generating tech companies including Google, Facebook and Microsoft have a sizable regional presence in Singapore, employing thousands of locals and Americans alike. The US, which is Singapore’s third largest trading partner, sees over USD 40.2 billion being exchanged between both countries annually, in addition to various other military, economic and social partnerships.
Data centre in Singapore
At the same time, Singapore remains welcome to its top two trading partners, China and Hong Kong, which cumulatively sees trade exchange amounting to close to USD 100 billion annually. Singapore allows both Hong Kong and mainland China residents who are fully vaccinated to freely enter the country with simple PCR tests complementing visa-free entry. Despite such an arrangement, arrivals from mainland China and Hong Kong remain far and few between, especially with significant quarantine requirements for re-entry into mainland China and Hong Kong.
On Arrival COVID-related Tests Upon Arrival into Singapore
Given the circumstances, Singapore seems to be well positioned to regain its status as the premier global trade hub in 2022 and beyond. The longer Hong Kong focuses itself inwardly in an evolving post-COVID world, the better poised Singapore remains, as it stands to be a willing benefactor of Hong Kong’s regressive reopening strategy.
