According to the latest statistics released by the United Nations, the top four economies in terms of foreign direct investment (FDI) last year were the United States ($310.9 billion), China ($163.3 billion), Singapore ($159.7 billion), and Hong Kong ($112.7 billion). Singapore significantly outperformed Hong Kong by $47 billion and closed in on China (leaving by only $3.6 billion). Over the past three years, the investment landscape in Asia has changed significantly. Singapore has seen a surge in FDI, Hong Kong has clearly lost its advantage, and China’s momentum has diminished, declining by $15.8 billion last year.
Following the outbreak of the COVID-19 pandemic in 2020, Singapore experienced a surge in FDI, rising sharply from $74.9 billion in 2020 to $126.7 billion in 2021, $141.1 billion in 2022, and $159.7 billion in 2023. In contrast, Hong Kong attracted US$134.7 billion in foreign investment in 2020, which increased slightly to US$140.2 billion in 2021, then declined significantly to US$109.7 billion in 2022, and then increased slightly to US$112.7 billion in 2023, lagging behind Singapore by US$47 billion.
From 2001 to 2005, China attracted an average of US$57.2 billion in foreign investment annually, Hong Kong US$22.8 billion, and Singapore US$15.8 billion. From 2006 to 2010, China attracted an average of US$94.7 billion in foreign investment annually, Hong Kong US$56.9 billion, and Singapore US$33.6 billion. From 2011 to 2015, China attracted an average of US$126.6 billion in foreign investment annually, Hong Kong US$105.7 billion, and Singapore US$57.9 billion, roughly half the amount attracted by China and Hong Kong combined.
From 2016 to 2020, China attracted an average of US$139.8 billion in foreign direct investment (FDI) annually, Hong Kong US$108.2 billion, and Singapore US$79.7 billion. Singapore has gradually approached Hong Kong’s level, but still only about half of China’s. From 2021 to 2023, China attracted an average of US$177.8 billion in FDI annually, Hong Kong US$120.8 billion, and Singapore US$142.5 billion. Singapore has clearly surpassed Hong Kong and is rapidly approaching China’s level.
In terms of growth rate, Singapore’s trend of attracting FDI at a faster pace than China and Hong Kong, and even surpassing Hong Kong, is even more pronounced. From 2006 to 2010, compared to the previous five years, China’s average annual growth rate for FDI was 65.4%, Hong Kong’s was 150.2%, and Singapore’s was 112.3%. From 2011 to 2015, compared to the previous five years, China’s average annual growth rate for FDI was 33.7%, Hong Kong’s was 85.7%, and Singapore’s was 72.5%.
From 2016 to 2020, compared to the previous five years, China’s average annual growth rate of foreign investment (FDI) was 10.4%, Hong Kong’s was 2.3%, and Singapore’s was 37.5%, showing Singapore’s significant acceleration in catching up with China and Hong Kong. From 2021 to 2023, compared to the previous five years, China’s average annual growth rate of FDI was 27.2%, Hong Kong’s was 11.7%, and Singapore’s was 78.8%, with Singapore accelerating its catch-up even further, to the point that Singapore’s FDI has surpassed Hong Kong and is approaching China’s.
Not only in direct investment, but Singapore’s assets under management (AUM) also surpassed Hong Kong for the first time last year, becoming Asia’s largest financial center. According to the latest data released by Singapore and Hong Kong for 2023, Singapore’s AUM reached US$4.094 trillion, exceeding Hong Kong’s US$3.993 trillion for the first time. From 2017 to 2023, Singapore’s compound annual growth rate (CAGR) was 9.0%, while Hong Kong’s was less than half of Singapore’s at only 4.3%, indicating a large-scale shift of Asian capital to Singapore over the past seven years. (The author is the representative to Singapore)