There was a time when Singapore was once seen as the Promised Land for wealthy people in East Asia to safeguard their assets and configure their identities. Especially in recent years, when some people loudly criticized Hong Kong, the media and some elites in Singapore often made snide remarks, adopting an air of "who else but me," as if the title of "Asia's financial center" would soon belong to Singapore.

However, the tides have turned. The latest trend has begun to change.

Recently, the British mainstream financial media, the Financial Times, published a major report directly targeting Singapore, with a title that clearly implies something: "Wealthy Chinese sidestep Singapore for Dubai."

This report is packed with information. It sends a clear signal: the previous surge of Chinese capital toward Singapore is rapidly cooling down, even starting to turn around and head west to the Middle East.

Why is "Pohuan" (Singapore) suddenly not so appealing anymore?

The report mentions that on the surface, it's because Singapore itself "closed its doors."

The Financial Times quotes the opinions of several private bankers and consultants, who bluntly point out that Chinese billionaires are becoming frustrated with the increasing difficulties in Singapore.

This "difficulty" manifests in three aspects: the aftermath of the regulatory storm, the deterrent effect of identity thresholds, and risk aversion towards regulation.

In contrast, Dubai offers a 10-year golden visa, a stable and favorable tax environment, and is extremely friendly to digital assets.

As a result, according to Standard Chartered Bank, the number of inquiries from East Asian clients, mainly Chinese, about Dubai has surged in the past year. The number of family offices in Dubai's financial center is also rising sharply, to the point where Chinese-speaking financial professionals are in short supply locally.

Capital is the most honest; it always flows to places with the least resistance and the most preferential treatment. Singapore's high-handed attitude is pushing its Chinese clients into Dubai's embrace.

If we only attribute the reason for Chinese rich people leaving Singapore to "regulatory pain," that would be too simplistic.

This shift in capital flow is rooted in Singapore's inherent problems at the genetic level.

About Singapore, I saw a sharp statement online these days: "Whether early or late, Singapore will eventually return to its original position, which is just a 'inn'."

I think this metaphor is very clever.

What are the characteristics of an inn? A transit station, welcoming and sending off guests, without producing anything itself.

Whether an inn does well depends entirely on how much money the guests give as tips.

This is exactly Singapore's way of survival.

In 2020, Chen Jiulin, former CEO of China National Aviation Fuel (Singapore), wrote an in-depth analysis article on the fragility of Singapore in the China Economic Weekly.

Chen Jiulin

Chen Jiulin believes that Singapore, a small country with an area of more than 700 square kilometers, is smaller than a large county in China. It has extremely scarce resources, even needing to import water and sand.

To survive, it must adopt extreme mercantilism. How to attract foreign investment? Offer incentives.

Chen Jiulin mentioned that when he expanded his company, Singapore officials actively approached him, inviting him to become a citizen, promising to give him the title of "special oil trader" and committing to reduce his corporate income tax rate from 20% to 15%, and even further to 3%.

No capital gains tax, no inheritance tax, and low personal income tax. Therefore, Singapore was particularly popular among China's emerging wealthy class in the past.

This tax haven model brought Singapore great benefits during the globalization wave in the past few decades. It also used this opportunity to build itself into a shining "bookkeeper."

But Chen Jiulin ultimately rejected Singapore's citizenship offer.

Why? What is the core competitiveness of a bookkeeper? It's not ability, but neutrality and service.

But what is the cultural essence of Singapore? Chen Jiulin summarized it in eight words: short-sighted, profit-driven.

When you succeed, you are a guest of honor, ministers play golf with you, and the prime minister dines with you; when you fail, you are an outcast, no one will sympathize with you, and there is no tolerance.

This is Singapore. When applied to the rich, it means: welcome your money, but not your person or your "troubles."

Once Singapore thinks that the "risks" brought by Chinese rich people, such as money laundering cases, outweigh the "benefits," it will tighten its policies without hesitation, even if this may deter customers.

Over time, Singapore's appeal to the rich naturally decreases.

This is the fate of an inn. It is destined never to become the home of any guest.

Aside from Singapore's genetic issues, the deeper reason why Chinese rich people are fleeing Singapore might be that they have come to see through its true nature.

What nature? In short, it's a county-sized place trying to do the work of a global center.

Why is Singapore considered a county?

Because it has no market hinterland. Enterprises here have nowhere to show their skills. Even with the best business environment, without a market, companies can't thrive. That's why Singapore lacks global big companies.

It also doesn't have core industries. According to Chen Jiulin's recollection, Singapore has been developing the electronics industry and biotechnology for over 20 years, but almost nothing remarkable has emerged.

Regarding Singapore's tourism, there's a sarcastic saying called "one-two-three," meaning "one red-light district, two casinos, three attractions."

Evidently, this is not a normal tourism structure.

Additionally, Singapore's economy is extremely dependent on China. In 2020, Temasek, Singapore's sovereign wealth fund, had a 29% investment in China in its portfolio, exceeding its investment in Singapore itself (25%).

More troubling is that the lifeblood of Singapore, its financial industry, is now facing strong competition from Hong Kong. Heavyweight Chinese companies like Alibaba and Xiaomi choose to list in Hong Kong rather than Singapore.

A country with no resources, no market, no core industries, and an economy highly dependent on China, what qualification does it have to call itself "Asia's financial center"?

If economic vulnerability is a lack of natural advantages, then the strategic miscalculation in geopolitics is the biggest mistake Singapore is currently making.

In recent years, everyone has seen clearly. Singapore enjoys the huge dividends of China's economic development while, in politics and military affairs, willingly acts as a tool for the United States in the Indian Ocean and the Pacific.

Economically relying on China, and security-wise on the United States. Singapore has always tried to balance both sides.

In the golden era of peace and development, this fence-sitting strategy might have worked both ways. But in today's stage where great power rivalry is intensifying, this "both... and..." calculation is bound to fail.

Once Singapore offends its largest customer source politically, you can't expect customers to still entrust their lives and fortunes to this bookkeeper.

This is the fundamental logic behind the departure of Chinese billionaires from Singapore.

At bottom, it's not just a simple issue of the business environment, but a matter of safety.

Rich people are more shrewd than anyone else. They see it clearly.

Hong Kong, no matter how bad it is, is backed by the entire China. It has China to back it up.

While Singapore? It's just a county-level transit station sandwiched between the U.S. and China.

Once China completes the integration of Southeast Asia, and once the regional economic master no longer shows it favor or gives it tips, it will be nothing.

Several years ago, some Singaporean media ridiculed Hong Kong during the pandemic and the Sino-U.S. trade war.

But the reality is that Hong Kong's financial status is far more stable than Singapore's, because it's our own territory. No matter how much chaos happens at home, it's still family members in the end.

While Singapore, once it loses China's trust and the influx of capital, its fragile shell of being a "financial center" will burst open at the slightest touch.

An inn may be built large, but it's still a business of welcoming and sending off guests; a county's framework may be built high, but it cannot support the ambition of a global center.

When the great powers no longer show it face, and capital no longer shows it favor, what it can return to is merely a geographical coordinate, a historical footnote, a small county as it should be.

From Singapore to Dubai, this is not just a transfer of wealth for the rich, but also a re-vote by global capital on safety and certainty.

In this vote, the inn that tried to eat both sides in great power博弈, and that believes in profit above all, is being mercilessly abandoned by its guests.

Original article: https://www.toutiao.com/article/7571288091026047498/

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