Question

Mr Desmond Choo: To ask the Minister for Trade and Industry in view of the prolonged social tensions in Hong Kong, what are the near and long term impact to Singapore's economy. 

Written reply (to be attributed to Minister for Trade & Industry Mr Chan Chun Sing)

1. Hong Kong is an important business and financial centre in Asia, and shares close trade and investment ties with many regional economies, including Singapore. For Singapore, Hong Kong was our fifth largest trading partner in 2018, and fourth largest investment destination as at end-2017. 

2. We are monitoring developments in Hong Kong with concern, as continued disruptions to Hong Kong’s stability will have negative spillover impact on Singapore and the region given these close linkages.  

3. To-date, Singapore’s economy has not been significantly affected by the developments in Hong Kong. MTI estimates that the total value-added that Singapore derives from Hong Kong’s final demand amounts to 1.2 per cent of Singapore’s GDP. However, businesses with strong dependence on Hong Kong may see a greater impact. For instance:

a. Some of our trade-related services such as wholesale trade as well as transportation and storage are more exposed to the developments in Hong Kong, as Hong Kong is a significant exports destination for Singapore. Thus far, feedback from the companies in these sectors indicates that they have not been severely affected. 

b. Some Singapore businesses with operations in the lifestyle and retail sectors in Hong Kong have been more directly affected by the developments in Hong Kong. Our economic agencies are in touch with these businesses and monitoring the situation closely. 

4. Over the longer term, if the current situation in Hong Kong persists and adds to global economic uncertainty, investor confidence will likely be adversely affected. This will in turn weigh on investments and economic activities in the region. Singapore, as well as other regional economies, benefit from a stable and predictable operating environment. With increased uncertainty, the impact on Singapore’s economy is likely to be larger. 

5. As Hong Kong is an important market and economic partner for Singapore, we hope that there will be a peaceful resolution to the situation in Hong Kong soon.