SINGAPORE, June 28 — Protracted uncertainty in Hong Kong, where protests continue over a contentious extradition bill, is bad for Singapore, the Republic’s central bank chief said yesterday.
While the two financial hubs are often seen as competitors, there is much “complementarity” between them, Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said.
Despite reports that some Hongkongers have begun moving money offshore — including to Singapore — amid concerns over the proposed law, Ravi said there has been no sign of a significant shift in business or funds.
This is based on data as well as the MAS’ conversations with financial institutions, Ravi told reporters at a briefing on the central bank’s annual report in its Shenton Way offices.
He was answering a question on whether the MAS has noticed greater interest in Singapore from fund managers and investment companies in the wake of the Hong Kong unrest.
Ravi said people tended to view Singapore and Hong Kong “too much through the lens of competition”.
The MAS and the Hong Kong Monetary Authority, he noted, join hands on many projects. “While there is of course a competitive dimension, there is also a lot of complementarity and… we should not lose sight of (this),” he added.
Uncertainty leading to poorer economic outcomes in mainland China, Hong Kong and North-east Asia will augur ill for Asia generally. That, in turn, is “not good” for Singapore’s financial sector, which benefits from activities in the region, Ravi said.
The concern, therefore, should be about the negative income effects from prolonged uncertainty, rather than on small substitution effects that could be gained from the potential movement of funds out of Hong Kong, for instance.
“Both Hong Kong and Singapore are very attractive financial centres with unique strands and business propositions,” he said.
“And we have built our value proposition through sound regulation, a predictable and facilitative business environment, and being at the heart of a very thriving and dynamic South-east Asia.”
In the past three weeks, Hong Kong has been in the grip of mass protests over the proposed law, which, if passed, would allow criminal suspects to be extradited to jurisdictions including mainland China.
Millions have filled the streets to demand that the bill be cancelled.
The demonstrations continued yesterday, with irate Hongkongers surrounding the offices of the justice secretary and obstructing roads.
Earlier this month, Hong Kong Chief Executive Carrie Lam suspended the bill indefinitely a day after violent protests erupted, but stopped short of withdrawing it. She has also rejected calls to resign.
Hong Kong is a former British colony that was returned to Chinese rule in 1997.
The special administrative region operates with some autonomy under a one-country-two-systems model, retaining its own legislature and judiciary, for example. — TODAY
