Stora tråden om Singapore

The shift by some of Asia’s wealthiest families to Singapore is hardly new. The city-state’s reputation as a low-tax bastion of safety and stability has long made it a regional hub for the rich, from Thailand to Indonesia. Its attraction for wealthy Chinese has ramped up since the 2019 protests in Hong Kong made that city less appealing, and gathered steam following this year’s Covid lockdowns.

“Significant money is flowing into Singapore” from Greater China, said Cheah Cheng Hye, co-founder of Value Partners Group, a Hong Kong money manager that’s adding staff in the city-state. “Family offices are expanding and people see Singapore as a safe haven for their money.”

While the super-rich have often used Singapore as a base for business, many Chinese families are now opting to live there. That shift has shown up in a myriad ways, from rising luxury car sales to sky-rocketing prices for mansions and golf memberships.

Home prices soared about 8% in the first nine months of the year, even as property markets from Sydney to Toronto tumbled. Rents are also jumping, as more potential buyers are priced out of the market and housing supplies tighten.

Sales of luxury cars coveted by wealthy Chinese are humming. Some 87 Bentleys and 78 Rolls Royces were registered this year in Singapore, up 26% and 90% respectively compared with all of 2019. These cars frequently cost well over $1 million.

Golf fees are soaring as new arrivals look to polish their swings while making a solid investment. The cost for an expat membership at the private Sentosa Club overlooking the Singapore Strait has more than doubled to S$880,000 since the end of 2019, according to figures from Singolf Services Pte, a brokerage. That easily tops an investment in Chinese stocks, which have dropped about 2% over that time.

“We see a huge demand that we didn’t see before the pandemic” Madeline Choo, manager of Active Golf Services Pte. “They need to buy a membership because they intend to stay in Singapore for very long.”

Thompson said that Beijing has historically been indifferent to those who move abroad -- as long as they fly under the radar and avoid criticizing the Communist Party. What’s more, Singapore is less likely to harbor vocal dissidents than its Western peers, he said.

All that suggests the flow of Chinese money into Singapore is unlikely to stop, said Gary Rieschel, founding managing partner of Qiming Venture Partners, a China-focused venture capital firm that’s raised $9.4 billion.

“Hong Kong was and Singapore now is the regional tax haven of choice,” he said, adding that the firm has opened a Singapore office. “This is Exodus on steroids with Xi as the unintended Moses.”

We’re all familiar with the sight of CCTV cameras in Singapore. We see them at MRT stations, near bus stops, and in the HDB blocks most of us live in.

That’s about 15 cameras per 1,000 Singaporeans, putting us on the 11th spot in the top 20 list of most-surveilled cities in the world.

Not surprisingly, the list is filled with mostly Chinese cities. Topping the list is Chongqing, followed by Hong Kong neighbor Shenzhen – dubbed the country’s Silicon Valley — and then Shanghai, Tianjin, and Ji’nan.

Wuhan, Guangzhou, and Beijing took up the number 7 to 9 spots respectively while Urumqi, the capital city of the Xinjiang Uygur Autonomous Region, is at number 14. In case you didn’t know, Xinjiang is where concentration camps for the Muslim Uighurs are located.

Singapore has engaged a new approach to construction called biophilic design. It means architects embrace nature in their design, bringing nature into the city, replacing columns, walls and neon with trees, leaves and insects. Biophilic design turns cities into engines of environmental wellbeing with benefits not just for nature but the human beings that live there too.

Hong Kong and Singapore have long squared off to be the preeminent finance hub for Asia. That battleground is now shifting to the ESG space, with potentially trillions of dollars at stake.

From green bonds to carbon trading and asset management, both cities are angling to be the regional base for sustainable finance as governments and companies ramp up investments to fight climate change. Combined ESG assets could soar to $53 trillion by 2025, with Asia sparking the next leg of growth, according to Bloomberg Intelligence.

The race to attract all that fresh money and trading business in Asia will take years to play out, but so far Singapore has an early edge over Hong Kong.

“Singapore knows that it might not be as established as Hong Kong as a financial hub, but in this area, if it manages to win, it will really be a game changer,” said Cherie Tam, senior manager in Hong Kong at Blunomy, a climate consulting firm.

There were 272 sustainability, green, social or transition bonds listed in Singapore as of Sept. 28, more than double the 103 listed in Hong Kong. Issuance linked to Hong Kong’s exchange totaled $24 billion, versus Singapore’s $34 billion. Singapore firms also hold an edge for green loans, with about $39.5 billion, nearly triple the $13.4 billion raised in Hong Kong.

As an issuer though, Hong Kong is well ahead, selling $7.2 billion in sovereign green bonds across different currencies since 2019 to establish a benchmark for corporate borrowers. Singapore only entered the green bond market in August with its debut sale of $1.7 billion in 50-year notes.

Hong Kong’s early adoption of a taxonomy that finds common ground between Europe and China will help the market grow, according to Elsa Pau, founder of BlueOnion Ltd., an ESG financial analytics firm. “Investors’ demand is still growing for a sustainable ecosystem and a decent yield,” she said.

Hong Kong is also poised to benefit from its proximity to China, the fastest-growing market for green bonds. Most of that issuance has been in the domestic market but as China looks to sell more abroad, the hub is “a natural listing place for them,” said Xuan Sheng Ou Yong, a green bonds and ESG analyst at BNP Paribas Asset Management.

Which hub is literally greener? First-time visitors to both places are often struck by the amount of green space, once you venture beyond the office towers that crowd the business districts.

Hong Kong has the edge though, with more than two thirds of the city considered green space, even if much of it’s mountainous. Singapore trails with about 40% as its botanic gardens, reservoirs and pricey golf clubs barely offset the urban sprawl.