Around this time last year, Singapore loosened its pandemic restrictions decisively, catalysing a brisk recovery that saw its economy grow by 3.6 percent in 2022. Hong Kong, by contrast, was still in the middle of its Omicron nightmare that resulted in about one in a thousand residents dying of Covid-19 in just over three months, the highest Covid mortality rate in the world then. Its economy shrank by a shocking 3.5 percent last year.

Also around this time last year, questions began to be asked by investors, bankers, business leaders and others about the longer-term viability of Hong Kong as Asia’s business hub. Was it losing its coveted position as the leading financial centre in Asia to Singapore? These doubts have not abated even as pandemic-era restrictions in Hong Kong were (belatedly) removed, and even as Hong Kong claims to be back in business.

Between the summer of 2020 (when China introduced a wide-ranging National Security Law) and last summer, more than 200,000 expats left Hong Kong, not least to escape pandemic restrictions that were increasingly seen as archaic and excessive. Singapore was one of the favoured destinations.

The contrasting fortunes of Asia’s two richest economies (by per capita income) in the past year are symptomatic of a longer-term trend. Since Hong Kong’s handover to China in 1997, and especially relative to Singapore, the Hong Kong economy has become less diversified and international, its government less capable and credible, and its previously robust civil society more cowed and fearful.

For all the hype that Hong Kong’s governing and business elites put out about the city being the world’s gateway and super-connector to mainland China (and vice versa), the fact remains that Hong Kong’s links with the fast-growing mainland economy have not helped it grow as fast as Singapore in the last quarter-century.