Comparing Singapore

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Comparing Singapore Hong Kong
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Singapore Hong Kong

• Area
• Singapore 697 km2
• Hong Kong 1,108 km2
• Population
• Singapore 6 million
• annual growth 1.8
• Hong Kong 7 million
• annual growth 0.3

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Singapore Hong Kong
Age 65 and older 10 17
Median age 35 44
Net migration rate 1.3 0.2
Total fertility rate 0.83 child 1.19 children
Infant mortality rate 0.2 0.3
Life expectancy 85 83
School life expectancy 13 years 16 years
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Singapore and Hong Kong

• Each is separated from the mainland by a narrow
  waterway
• Singapores relationship with Malaysia has been
  volatile
• brief merge in 1963-1965
• disputes about water delivery, islands, etc.
• Hong Kong benefits from mainland Chinas cheap
  labor and market

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Singapore and Hong Kong

• Both are mostly ethnic Chinese societies
• Singapore 74
• Hong Kong 92
• both had over 100 years of British rule
• Singapore 1819 - 1959
• Hong Kong 1841 - 1997
• both were occupied by Japan
• 1942 - 1945

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GDP (purchasing power parity)

• Singapore
• US0.5 trillion (0.3 trillion)
• Ranked 38th in the world
• per capita 7th in the world
• Hong Kong
• US0.5 trillion (0.3 trillion)
• Ranked 43rd in the world
• per capita 17th in the world

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Singapore and Hong Kong

• Both are newly industrialized economies
• GDP composition
• Sector Singapore Hong Kong
• agriculture 0 0
• industry 25 7
• service 75 93

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Singapore and Hong Kong

• Exports
• Singapore 13th in the world
• Hong Kong 9th in the world
• 54 to mainland China
• Imports
• Singapore 16th in the world
• Hong Kong 8th in the world
• 45 from mainland China

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Exports of G.S. ( of GDP)
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Economic development

• Singapore and Hong Kong
• have achieved similar economic success
• through very different economic approaches
• path of economic development diverged after World
  War II
• similar experience under British colonial rule
• divergent political development after WWII
• divergent economic models after 1960s

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Colonial legacies

• Both became entry ports to mainland
• both benefited from British management and
  technological expertise
• both attracted inflow of Chinese emigrants
• Chinese population in Singapore doubled in 1820s
• Chinese population in Hong Kong quadrupled
  between the two World Wars

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Divergent paths after WWII

• Singapore gained independence (1959)
• Lee Kuan Yews Peoples Action Party
• economy grew at a slow pace in 1950s
• still based on intermediary trade
• boosted by the Korean War of 1950 - 1953

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Divergent paths after WWII

• Hong Kong restructured its economy
• population quadrupled 1945 - 1955
• large-scale relocation of capital, entrepreneurs,
  and assets from mainland China
• trade embargo against mainland China after Korean
  War broke out actually benefited HK
• relative political stability
• popular political apathy

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Divergent development model

• Singapores Peoples Action Party
• faced severe internal and external conflicts in
  1960s
• PAP became a elitist and paternalistic party
• neo-Confucianism?
• government intervention in the economy
• drew up a state development plan

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Singapores development 1960s

• New institutions
• Economic Development Board
• promote industrial development
• Housing and Development Board
• develop industrial estates
• Development Bank of Singapore
• provide industrial financing
• Jurong Town Corporation
• acquire, develop, and manage development sites

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Singapores development 1960s

• Restructured from trading port to manufacturing
  base
• government intervention to attract foreign
  investment
• in labor market
• in providing public housing
• in improving educational facilities
• in developing a social security system

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Singapores development 1960s

• produced phenomenal economic growth
• achieved full employment by early 1970s
• ventured into high-tech, capital-intensive
  industries and high value-added services

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Hong Kongs development

• Hong Kong also enjoyed phenomenal economic
  success
• rapid expansion in manufacturing in 1960s
• industrial diversification in 1970s

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Hong Kongs development

• governments laissez-faire principle
• reactive, selective, reluctant intervention
• development of public housing
• provide lower-middle-income families with access
  to home ownership
• social expenditure community development
• development of human resources
• intervention to maintain competitiveness

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Convergence since 1980s?

• Singapore reconsidered its development strategy
• economy diversified from manufacturing to
  financial and professional services
• aims to surpass Hong Kong as an international
  center of finance business HQ
• government relaxed intervention in economy
• free capital flows and foreign investment even
  after Asian Financial Crisis of 1997

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Convergence since 1980s?

• Hong Kong government moved in the opposite
  direction
• became more interventionist
• to cope with the political uncertainty during the
  negotiations between PRC and UK
• intervened in stock and currency market
• has linked HK to US since 1983

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Income Inequality in East Asia
Rank Country/Region Gini index
9 Hong Kong 53.9
29 China 46.5
35 Singapore 45.9
39 United States 45
78 Japan 37.9
93 South Korea 35.7
111 Taiwan 33.6