The Asian Voice

The great Hong Kong versus Singapore debate: China Daily

Singapore (left) and Hong Kong (right) have often been compared with each other as they both strive to be the preeminent business hub in Asia, excluding Japan.
Singapore (left) and Hong Kong (right) have often been compared with each other as they both strive to be the preeminent business hub in Asia, excluding Japan.PHOTOS: CAROLINE CHIA, HONG KONG TOURISM BOARD

Asia's financial centers offer distinct advantages, but decades-old competition is not going away.

By Thomas Zhang

China Daily/Asia News Network

In the midst of the global financial crisis in 2009, investment banks in London were shedding thousands of jobs.

A Chinese friend of mine in the United Kingdom fell victim to the cuts and was considering a move back to Asia.

"Where do you think I should go?" he asked. "Singapore or Hong Kong?"

As someone who had spent a lot of his professional life in the UK, I was of little help.

Both are prominent regional financial centers and were being touted as a refuge for bankers looking for opportunities away from Western markets during the financial crisis.

This is a dilemma facing every banker who wants to work and settle in Asia. If you are a banker in North America, you probably wouldn't hesitate too much where to work before heading to New York, and London still has the biggest draw among financial centers in Europe.

But in Asia, Singapore or Hong Kong is a less obvious choice, because these two de facto financial centres in Asia (ex-Japan) have long been competing to be the preeminent financial hub in the region.

After moving to Singapore a little less than a year ago, I realised that the appeal of these two cities largely depends on your personal status.

It may sound like a cliche, but several people - including banks' recruiters - have said that Hong Kong, as a dynamic and vibrant city, is more attractive to young, single bankers.

Meanwhile, those with a family would prefer Singapore more, mostly "because of better air quality and better education", according to a human resources manager at a Hong Kong bank.

As someone who lived in Beijing for many years, I initially thought Hong Kong's air quality was much better.

This has been the case for many years, but more recently, it dipped to the point where it's "nearly on par with Beijing's", according to the South China Morning Post.

Mr Lee Quane, regional director for Asia at ECA International, a management consultancy, said in 2012 that Hong Kong was already among the worst locations worldwide for air quality, along with cities like Santiago, Mexico City and Cairo.

His comments were echoed by London's municipal government in a report released in 2014 on the air quality in the world's major cities.

In that report, Hong Kong ranked 30th among 36 cities, just slightly higher than Mexico City (31st), Beijing (35th) and Cairo (36th).

Singapore's air quality, on the contrary, is generally much better. I moved there from London earlier this year and found that the air quality was as fresh as the city, albeit more humid.

But the last month and a half has been a pain for everyone, as Indonesia's forest fires have created a haze across the city-state.

In previous years, this haze would only last a few weeks. Yet this year, the fires have not been successfully put under control, so the haze has stuck around.

Singapore's education system is a big draw.

Ms Karen Yep, a Singapore-based associate director at the executive search firm Profile Search & Selection, said that Singapore has "an educational system which fosters and emphasizes strongly on the development of bilingual skills from the very start". Of course, she means English and Mandarin.

Governed by the British for over a hundred years, followed by the urgent need to promote a harmonious society among different ethnic groups just after independence, the city-state made English its official language.

On the other hand, each ethnic group is allowed to keep its own language.

Considering that more than 70 per cent of Singaporeans are ethnic Chinese, Mandarin has always been widely spoken, and Mandarin education has never been marginalised throughout Singapore's short history as an independent nation.

As a result, a large proportion of students in Singapore grasp Mandarin to a pretty good level by the time they graduate. In teaching Mandarin, Singapore is likely to stand in a better position than Hong Kong, which counts Cantonese as its local language.

In investment banking, there has been a dramatic shift in requirements. As experienced expat deal-makers were all the rage five years ago, the incoming analyst classes in international banks predominantly speak Mandarin as a first language.

While banks in Hong Kong look to the Chinese mainland for deal activity, demand for Mandarin speakers soars. Singaporean graduates thus suddenly find themselves in an advantageous position.

There is one more reason why families prefer Singapore - a sense of security coupled with an easy-going lifestyle.

To someone who witnessed the chaos of the London riots in 2011, this is an appealing prospect.

Singapore is small, but it is well-planned, has great public transport as well as numerous gardens and wetlands.

However, such order and discipline may come at a cost of individual freedom and dynamism, or so they say. What can be reassuring to families can be a little stifling for young people.

I've heard people say numerous times that Hong Kong - which has more of a reputation as a party town - is more attractive to young, single or even male bankers because it is more vibrant.

"Those who like to travel and party will surely like Hong Kong," said Mr Lesley Li, a Shanghai-based financial headhunter who works with Hong Kong clients.

But maybe this view is dated. Singapore is making more of an effort to appeal to party animals.

"How can it be boring?" said Mr Will Tan, managing director at Principle Partners, an executive search firm. "I dare say that Singapore has got more world-class bars than Hong Kong now, or at least as many. Clubs? Likewise."

Bars and clubs might be appealing to young bankers, but in an industry where junior employees are required to work 80 to 90 hours a week, career considerations are also key.

If a banker happens to be Chinese and can speak Mandarin, he has every reason to choose Hong Kong because of its proximity to mainland China. This is where the businesses are these days. Singapore simply can't compete. Hong Kong is being positioned as the place to launch your career.

Mr Patrick Lecomte, an executive director at ESSEC Business School Singapore, said that during one of his recent trips to London, he was intrigued to hear a seasoned British trader talking to a group of students: "Go to Hong Kong. This is the best place to do finance today. You will get more money than in London and access to more exciting career opportunities. If I were your age, this is what I would do."

A long-time friend of mine, who has lived in Hong Kong for over a decade now, advised me not to go to Hong Kong unless I work in banking or real estate.

"The pressure is huge," he said. "Everything is expensive, especially housing."

If you want to live in a prime area of Hong Kong, an 85 sq m property can set you back HK$38,000 (S$6,966) per month.

It's not just about housing, but the overall cost of living.

In Mercer's 2015 Cost of Living Rankings, the consulting firm ranked Hong Kong the second-most expensive city in the world, with Singapore in fourth place.

The Hong Kong vs Singapore debate has been around for decades, and it is unlikely to disappear any time soon. For someone like me who moved into the region only fairly recently, it's interesting to be introduced to arguments from both sides, as well as to see it with my own eyes.

And where do you think my banker friend in London eventually ended up? He got offers from both Singapore and Hong Kong, and he opted for Singapore.

He had a family, after all.

The author is APAC editor, eFinancialCareers, based in Singapore.