Singapore Has the Edge over Hong Kong

Topics: Balance of payments, National accounts, Current account Pages: 4 (1179 words) Published: December 8, 2011
Singapore has the edge over Hong Kong|
Evidence from Macro-economic analysis|

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Singapore has the edge over Hong Kong
Both known as “East Asian Tigers”, Hong Kong and Singapore share numerous similarities and are often compared by people, especially economists. Both being metropolises in East Asia with high population density and serving as most important financial centres not only in Asia but also in the world, the two cities appear like twin brothers prima facie. But the World Economic Forum (WEF) always sees there differences, in the sense of their growth competitiveness and macroeconomics environment; and to Hongkongese’s disappointment, through over 10 years’ data from 1997 to 2008, Singapore has always had the edge. As seen in its annual Global Competitiveness Report (Diagram 1), Singapore has always surpassed Hong Kong in Global Competitiveness Index, not mentioning that Hong Kong experienced a setback during 2000-2006, fell from top 5 to 24th in 2003. Meanwhile, Singapore has been the world’s successive no.1 regarding its macroeconomic environment. However, it is argued that the measurement of the two indexes may be biased and may not truly reflect the economic capacity of two countries. Therefore, the macroeconomics of both regions is further examined from aspects of national accounts, monetary situation, people, government performance and balance of payment based on the data from 1997 to 2008. The conclusion drawn from the national account supports the superiority of Singapore. Conventionally, GDP is the core component of national accounts. During the ten years’ period, Singapore has always been in leading place, producing average 6,510 more units than Hong Kong, measured in GDP (PPP) per capita (Diagram 3). Hongkongese will also be uneasy to see a continuous growing gap between the two. The monetary situation is indexed with the inflation rate. As presented in diagram 4, Hong Kong and Singapore experienced a...
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