Singapore and Hong Kong were like two students sitting next to each other in the same class for years: they came from similar backgrounds and had similar raw skills. Both countries had British laws as a foundation, kept their governments small, and relied on trade and finance to make their futures possible. The smart money in 1990 would have been on Hong Kong if you had to bet on which one would win by a large margin. China was on its side. What could Singapore possibly have to offer that would be better? It turned out to be quite a bit.
The head of the MAS admitted in a June speech that Singapore’s assets under management had grown to $6.7 trillion by the end of last year. This is an increase of 53% in just five years. That number wasn’t just a fluke. It happened because Hong Kong was hard to live in, uncertain at work, and unsettling politically for about five years, making it a place that many expatriate finance professionals didn’t want to go through. In 2019, protests made people lose faith. The protests were followed by some of the strictest and longest-lasting limits on Covid. These limits ended what the protests had begun. People left. And a good number of them went down south.
Singapore took that wave in quietly and quickly, as it does with most things. There are now new family offices. Hedge funds added more employees. Rich people from all over Asia and beyond came to the island because they thought it could offer stability without any conditions, which Hong Kong could no longer do.
Being honest about what made them do that is important. Singapore wasn’t just appealing because of its low taxes and clear laws, though those were important. More than that, fund managers and portfolio teams had a strong sense that the rules in Hong Kong had changed in ways that were hard to fully quantify but impossible to ignore. This was made clear when the Alternative Investment Management Association wrote to Singapore’s Monetary Authority this month to warn them that members are actively looking into moving back to Hong Kong. According to an unnamed global manager, the company’s headcount in Singapore has gone down over the past few years while its presence in Hong Kong has grown. This is the opposite of what happened just a few years ago, the report said.
This change is important to note because it suggests that the capital flows after 2019 might not last as long as Singapore had hoped. Hong Kong is on the move. As part of its plan to cut many taxes and introduce a carried interest break, the government wants to make fund managers much more money. It grew by 20% in just one year, to a record $7 trillion in assets under management in Hong Kong in 2025. That’s not a city running away.
Still, Singapore might have structural advantages that are too deep for a single tax cycle to fix. The longer story here, which goes back thirty years, is about what happens when a city depends on just one business relationship. Being so close to China made Hong Kong very rich, but it also made it impossible for it to grow any further. As China built its own financial system and Shanghai, Shenzhen, and other cities became more modern, Hong Kong’s role as an important middleman slowly diminished. It was no longer useful for the gateway when the destination built its own doors.
Singapore was kicked out of Malaysia in 1965 and has always been worried about its own survival, so it has never been able to depend on others in that way. It didn’t have any land to lean on. That country didn’t have a big neighbor whose economy would help it out. The country had a government that was ready to make smart, and sometimes risky, guesses about where the economy should go next, like biomedical research, finance, semiconductors, and petrochemicals. That restlessness, which came from real fear, turned out to be a good thing.
It’s really not clear if Singapore can keep the progress made over the last five years. The letter from AIMA is a red flag that should not be ignored. But it seems like the rivalry between these two cities has moved on to a new, trickier level. Now, neither can afford to be lazy, and the next chapter will depend less on geography and more on which city is willing to change the most.
