Singapore's economy became marginally larger than that of Hong Kong in 2010 for the first time. The lead continued to widen in 2011, with Singapore generating a gross domestic product of US$259.8 billion versus US$243.3 billion for Hong Kong.
A 2011 survey of expatriate pay conducted by ECA International indicated that Singapore expatriates are enjoying a higher take-home salary than their Hong Kong counterparts. Expatriates' salary in Singapore was ranked fifth in Asia versus 10th for Hong Kong in the survey. It wasn't so long ago when it was more financially rewarding to be posted to Hong Kong.
According to a cost of living survey conducted by the consulting group Mercer, Singapore overtook Hong Kong in March 2011 to become the world's eighth most expensive city to live in. It was 11th in 2010. Hong Kong slipped from eighth to ninth place.
So what has changed the positions of Hong Kong and Singapore?
While Hong Kong's GDP growth has lagged behind Singapore's over the past decade, another key reason for all of the above is that the Hong Kong dollar peg has locked the local currency in lugubrious embrace with US greenback. In recent years, that has not been a great pairing for Hong Kong, as it has contributed to a decline in the Hong Kong dollar against virtually all major currencies, even minor ones like Singapore's.
The Singapore dollar has appreciated by about 45 per cent against the Hong Kong dollar over the past 10 years, according to Bloomberg data. This helps to explain why its per capita income is about 40 per cent greater than Hong Kong's.