A Tale of Two Cities: Implications from Singapore & Hong Kong for Asian Emerging Markets

HKUST IEMS Policy Briefs No. 4

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David Skilling (Landfall Strategy Group)

Key Points

  • Hong Kong and Singapore have increasingly divergent economic models, although they continue to share some common features such as significant FDI inflows.  Hong Kong is focused on its position as a global hub, acting as a gateway into mainland China, whereas Singapore is building positions of competitive advantage based on domestic strengths and capabilities.
  • These models have different exposures to changing patterns of globalisation. As cross-border global flows of people and physical trade reduce in intensity, and supply chains become more regional in nature, being a global hub is a riskier proposition.  In contrast, developing domestic capabilities means that more domestic value can be captured from globalisation even with growing global frictions.  The recent economic performance of Singapore and Hong Kong provide a measure of this.
  • This experience has relevant insights for other emerging markets in Asia as they seek to position themselves for Covid-19.  Asian emerging markets will need to deliberately build competitive advantage through an active process of investment in building strengths and capabilities. They cannot rely on the same patterns of globalisation as previously.

About the author

David Skilling is the founding Director of Landfall Strategy Group, an economic and policy advisory firm that works with governments, firms and financial institutions in Asia, the Middle East, and Europe, with a specific focus on small advanced economies.  David has previously worked in various roles in the New Zealand Government, founded an independent economic think tank in New Zealand, and was with the McKinsey Global Institute and McKinsey & Co in Singapore. 

David holds a Ph.D. in Public Policy, and a Master in Public Policy degree, from Harvard University, as well as a Master of Commerce degree in Economics from the University of Auckland.  David was named as a Young Global Leader by the World Economic Forum in 2008.

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