6
2.3 The different location and political development of Hong ng and Singapore over the next ten years suggests that while Hong Kong may well become even more oriented towards mainland China as trade
and investment links are increasingly followed by financial and other service links, Singapore's future may lie more in providing services to the new generation of NIE's, Indonesia, Malaysia, Thailand and in time perhaps the Philippines. For Hong Kong the risk of this development is that over time it will become less a
regional financial centre than China's window to international
financial services. Should China not reform in the way or at the
speed which recent Deng speeches might imply or, worse, should
conservative elements regain primacy in Chinese politics, Hong Kong
could find it has little to do to finance China's economic
development. A change in the political complexion in China and
between China and Hong Kong could also mean that foreign financial
companies, like the Japanese banks, no longer wanted to do business with or through Hong Kong.
REVIEW OF INDIVIDUAL SERVICES
Banking
2.4 A number of different sources of data are available on banking
in Hong Kong and Singapore, including the IMF, BIS and national
sources. Although these do not always provide completely
reconcilable data, they present a broadly consistent picture.
2.5 The number and composition of banks is illustrated in Table A overleaf. Comparing Hong Kong, Singapore and the UK, it is apparent
that both Far Eastern centres have much higher proportions of
foreign banks than the UK. A major difference between London and
Hong Kong on the one hand and Singapore on the other is that only
the last maintains a distinction between onshore and offshore
banking units. This reflects Singapore's historic development in
setting up the Asian Dollar market and its wish to discourage the
international use of the Singapore Dollar. It is also an indicator
of the tight regulatory environment which pervades Singapore.