National security law: could Singapore take Hong Kong’s finance crown? It’s keeping mum

City state has been clear it does not want to be seen as taking advantage of Hong Kong’s political turmoil

Yet its similar tax rates, lower rents and safe streets are likely to appeal to any businesses that do decide to relocate

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Singapore: a financial rival to Hong Kong? Photo: Xinhua

Published: 8:00am, 28 Jun 2020Updated: 8:57am, 28 Jun 2020

Even as Japan and South Korea seek to woo Hong Kong’s financial firms considering a Plan B in the face of Beijing’s tightening control, one Asian city seen as the most obvious beneficiary is keeping mum.

In Singapore, which is in the thick of election fever ahead of the July 10 polls, there has been little market chatter about whether the republic should try to woo businesses and talent concerned about the new national security law in Hong Kong.

In fact, Singapore’s central bank told wealth managers last July, as the city was roiled by massive anti-government protests, not to take advantage of Hong Kong’s political turmoil.

This month, the Monetary Authority of Singapore (MAS) issued a statement after media reports cited its figures showing foreign currency deposits jumped almost fourfold from a year earlier to US$27 billion in April, while deposits from non-residents rose 44 per cent to US$62 billion. The amounts, the highest on record since 1991, were due to risk-averse investors and inflows from markets including Hong Kong, the reports said. But MAS stressed the deposits had come from a variety of sources and were not overwhelmingly from a single region or country.

Said Antonio Fatas, economics professor at INSEAD: “It is a delicate issue and I cannot imagine a government in Asia making a strong public announcement to lure firms into their country. Not sure China would see this as wise.”

The law, which targets secession, subversion, terrorism and collusion with foreign and external forces endangering national security, could be imposed on the city as early as this week, with Beijing describing it as a necessary tool to restore stability.