By Sundeep Tucker in Hong Kong
Hong Kong has been overtaken by Singapore in a new ranking of global commerce, the latest sign that its arch-rival is stealing a march in the battle to be Asia ’s leading international financial centre.
The report on the top 75 worldwide centres of commerce, commissioned by MasterCard, shows Hong Kong slipping from 5th last year to 6th, while Singapore jumped two places to 4th. The city-state narrowly failed to take 3rd position from Tokyo, which owes its lofty position to its enormous domestic financial market. London and New York took first and second place.
The index combines seven measures of commercial power. While Hong Kong retained its ranking as the world’s No.1 business centre, it trailed Singapore as a financial hub and in other areas including economic stability, legal and political framework and liveability.
The figures show that Singapore pulled away from Hong Kong last year when it came to the ease of doing business, a measure which encompasses how difficult it is to open and close a business, hire staff and cope with the corporate tax burden.
One of the authors of the report, Dr Yuwa Hedrick-Wong, economic adviser, Asia-Pacific, MasterCard Worldwide, said that even Hong Kong ’s position as the world’s leading business centre faced a serious challenge.
He said: “Most multinationals keep their Asia headquarters in Hong Kong but there are signs that many could switch more functions to Shanghai. Hong Kong is top on this measure but it is vulnerable.”
Dr Hedrick-Wong said that Hong Kong needed to become better attuned to the needs of international commerce if it was to rise up the rankings.
He said: “The rise of China and Shanghai is beyond Hong Kong ’s control. Nevertheless policymakers [in Hong Kong ] need to take action at other levels such as improving fluency in the English language, liberalising immigration rules and reducing pollution.”
In recent years Singapore has wooed international corporations with aggressive tax breaks, and established itself as a major centre for private banking and hedge fund activity with a regulatory framework perceived by many as more competitive than that offered in Hong Kong.
China has five cities represented in the MasterCard index. Shanghai climbed eight places to 24th, with Beijing 57th, Shenzhen 60th, Chengdu 72nd and Chongqing 73rd. India boasts three cities in the rankings; Mumbai 48th, New Delhi 61st and Bangalore 66th.
Copyright The Financial Times Limited 2008
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