Long, traditional business link with Hong Kong
Singapore is represented in force in Hong Kong. Its Economic Development Board, Trade Development Board and Tourist Promotion Board maintain offices along with a host of Singapore companies.
'There has been a long traditional relationship between the business communities of the two cities,' Singapore Consul General Chan Heng Wing said.
'On top of that, many Hong Kong people have gone to Singapore to invest. More recently, Singaporeans have also been coming to Hong Kong to look at investments in quite a lot of areas,' he said.
The Singapore Government has encouraged companies to expand abroad. Both direct equity and overseas set-ups by Singapore companies were rising before the economic crisis.
Latest statistics suggest Singapore's direct equity investment in Hong Kong is S$6.5 billion (HK$30.87 billion).
Investment in both directions totals about S$20 billion.
Singapore's Wai Ting Group was awarded a HK$7.7 billion contract to develop the first phase of the Kowloon station property project back in February 1996.
The Asian Airfreight Terminal consortium including several major Singapore companies will operate air cargo terminal facilities at Chek Lap Kok. Consortium members include Singapore Airline Terminal Services, China International Airport Services, China Merchants, Federal Express and Kerry Holdings.
Besides airport-related investments, Singaporeans have stakes in the Conrad and Marriott hotels and properties such as Hard Rock Cafe, Planet Hollywood, Cafe Kaldi and Haagen Dazs in Hong Kong.
Last year, Singapore exports to Hong Kong were worth S$17.8 billion and imports from Hong Kong were worth $5.78 billion. Hong Kong made up about 6 per cent of total Singapore trade, making it the republic's fifth trading partner. Oil products are a major two-way trade item with Chinese crude passing through the SAR for refining in Singapore.
How the currency crisis changes the Singapore-Hong Kong relationship is hard to say. One Singapore dollar bought HK$4.75 at writing, down about HK$1 compared with 12 months earlier. 'When one talks to the [Singapore] business community, everybody is expressing the view that maybe it is time to consolidate for a little while,' Mr Chan said.
'I would imagine they would like to stay liquid for a while and just hold off their investments.' He called the capital flow slowdown unfortunate, saying the SAR and Singapore together could be a magnet for multinationals seeking regional opportunities.
Bilateral ties are tightening in other ways. Legislators are holding exchanges, as are extended families. Since the Singapore Government introduced its special immigration programme in the wake of the Tiananmen crisis, 10,000 Hong Kong families have relocated to the Lion City.
