Asia's New Competitors
Singapore and Hong Kong
The city-states of Singapore and Hong Kong are extraordinary economic success stories and highly competitive rivals. The two have long been the leading trading centers in the region and more recently have developed strong export- oriented manufacturing sectors. These two competitors could hardly be more different, however, in economic and social ideology. Since gaining independence in 1965, Singapore has pursued a state-guided economic strategy with large state-owned enterprises controlling key sectors such as housing, petroleum refining, and the national airline. It has also pursued a paternalistic (or in Singaporean parlance, "communitarian") social policy that has created a clean, safe environment for foreign investors while cobbling together a common identity in a multicultural society. Hong Kong, by contrast, has a strong belief in laissez faire economics and an abhorrence for government intervention in the economy. 1 Singapore's careful censorship and constant campaigns to promote cleanliness and courtesy likewise contrast with Hong Kong's more open, free-wheeling environment.
The competition between Singapore and Hong Kong has been the subject of a good deal of academic debate over the merits of their different economic models. The two are in competition for foreign investment and commerce, with each hoping to be the key hubs for transport, telecommunications, and finance in Southeast Asia. Hong Kong's position as the gateway to China remains a source of competitive advantage, but Singapore's government has been more aggressive in courting multinationals, especially in manufacturing. There are probably few industries that better illustrate the contrasts between the Singapore and Hong Kong economic models than the computer industry.
One of Singapore's most impressive economic achievements has been the creation of a large computer industry virtually from scratch in less than fifteen