Hong Kong can learn from Singapore and Shanghai
Updated: 2014-11-26 07:41
By Zhou Bajun(HK Edition)
|
|||||||
The Economist Intelligence Unit (EIU) recently released its annual survey of 82 countries and regions. For the seventh year in a row this ranked Singapore as the best place in the world to do business.
The EIU's rankings are derived from analysis of 10 aspects of each country's business environment, These include politics; macroeconomics; market opportunities; free enterprise and competition policies; taxes; the labor market; and infrastructure.
The report said Singapore, a tiny city without an economic hinterland, ranked first "due to its efficient, open economy that works hard to maintain its competitiveness as a regional hub for global businesses". The Lion City continues to attract foreign companies. This is because of its corporate tax rate - relatively low at about 17 percent, extensive legal and business services and because it is largely corruption-free.
Hong Kong shares virtually all of these advantages, but was ranked fourth by the EIU. Singapore only really surpasses Hong Kong in its lower levels of pollution; its corporate tax rate is higher than Hong Kong. But the EIU survey made no mention of the increasing difficulties experienced by some foreign companies in hiring non-Singaporeans this year. This is due to the introduction of government policies to encourage the employment of local people.
However, the EIU is not alone in praising Singapore. An HSBC survey last October judged Singapore to be the second-best expatriate destination after Switzerland. It revealed that 86 percent of respondents felt Singapore was "a safer place to raise a child than their home country".
Since the late 20th century, Hong Kong and Singapore have been dubbed "Asian Twin Cities". Both are city-economies. They have undergone rapid social and economic transformation - from under-developed economies to sophisticated modern industrial ones. However, recently Singapore has overtaken Hong Kong in important areas such as its per capita GDP. The Lion City has remained at the top of the EIU survey for seven years. So what can Hong Kong learn from Singapore?
Shortly before the EIU report, a study revealed that English proficiency in Hong Kong was, for the first time, worse than in some mainland cities including Shanghai. The annual study, known as the English Proficiency Index, is compiled by the Education First (EF), a Swedish-owned global language teaching company. This year's index is based on the results of a free online test and the enrolment test taken by those who took the company's courses last year. It covered about 750,000 people across 63 countries and regions. Both tests include grammar, vocabulary, reading and listening sections. Hong Kong scored 52.5 out of 100, interpreted as having "moderate proficiency" in English. The score for Shanghai was 53.7. This is a warning that Hong Kong may be overtaken by Shanghai.
It is worth noting that some local institutions attribute the decline of English proficiency among Hong Kong people to public schools switching from English to Chinese as their language of instruction. In fact since the SAR government adopted the mother tongue education policy many public schools have changed their medium of instruction to Chinese.
Many people in Hong Kong believe the city should learn from Singapore rather than Shanghai.
The Shanghai-Hong Kong Stock Connect was officially launched before the EIU report was published. During its first week following the launch, the scheme failed to attract as many investors as had been hoped.
Many Western media outlets and pro-Western commentators blamed this on the underperformance of the Shanghai stock market in the past five years. They argue that mainland regulators need to make the Shanghai stock market more attractive to foreign investors.
The overall strength of Shanghai's economy remains inferior to that of Hong Kong. But Shanghai is superior to Hong Kong in terms of its economic potential and the rapid pace of its development.
Singapore and Shanghai differ greatly in their respective competitive edges. But they have one thing in common - both cities have political and social stability. For small places such as Hong Kong and Singapore, political and social stability is vital for economic development.
Therefore, Hong Kong needs to bring an end to the "Occupy Central" campaign soon and restore social stability. If it is to achieve future economic success Hong Kong society cannot afford to become polarized by political issues. The SAR clearly has much to learn from both Singapore and Shanghai.
The author is a veteran current affairs commentator.
(HK Edition 11/26/2014 page10)