There has been a lot of debate about why Hong Kong has been lagging behind Singapore in economic growth in recent years.
A Hong Kong Trade Development Council report points out a simple reason—the number of working people is increasing more in the Lion City.
Since 2004, Singapore has surpassed Hong Kong in per-capita GDP. Last year, Singapore’s number was US$56,300, 40 percent higher than ours.
There is no clear difference in terms of business environment. Both rank near the top of global surveys. Depending on the source, sometimes Hong Kong is ahead, sometimes Singapore.
For instance, Hong Kong ranks No. 1 in the 2015 Index of Economic Freedom of the Heritage Foundation, while Singapore ranks second.
The 2015 World Competitiveness Yearbook puts Hong Kong in second place while Singapore is third.
But in The Global Competitiveness Report 2015-2016 of the World Economic Forum, Singapore is number two, five rungs above Hong Kong.
In terms of ease of doing business, the World Bank ranks Singapore as the best this year, while Hong Kong is in third place.
“The most direct and apparent reason for Singapore’s higher growth and per-capital GDP is its active labor policy, which has boosted the size of the working population,” the HKTDC report notes.
Singapore has rolled out a series of policies aimed at attracting new immigrants, who are often young, highly educated and skilled. This has resulted in higher labor productivity.
In comparison, Hong Kong’s population gain over the past decade has come largely from mainland Chinese spouses of our residents and their children for the purpose of reunion under the one-way permit scheme.
Admission schemes aimed at drawing overseas talents haven’t brought notable results compared to those implemented by Singapore.
Last year, Singapore’s labor-force participation rate was 64.6 percent. In Hong Kong, it was only 53.5 percent.
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