A Study On The Competition Between Hong Kong And Singapore As Internatinal Financial Centers: 1980-2005

Along with the financial integration extending over the world, a mass of burgeoning financial markets grow up. The global international financial center, regional financial center and off-shore financial markets constitute a financial network which covers with the seven seas. Finance, which plays a more and more important part, gradually becomes the highest level and even the backbone in each economy. The financial center is the spontaneous outcome of financial development and evolution. The tremendous value of international financial center in both politics and economics attracts countries to make efforts on financial center construction; meanwhile, the resource limitation incurs furious competition. In Asia, the contention among financial centers goes like a raging fire. Japan's Big Bang, the scramble between Hong Kong and Singapore as well as Shanghai's inch to try could be the most typical illustration.The long-term vie between Hong Kong and Singapore is undoubtedly the most remarkable one. There has been some academic and empirical research on comparison between these two cities, nevertheless, few study pays attention to long period dynamic investigation. The index systems evaluating the status and competitiveness of international financial center are not completed yet. Since 1980, how did these two cities develop as a regional financial center respectively? Did the competition situation experience any change? Which is the most possible winner in this combat, Hong Kong or Singapore? All these questions are still eager to find the answers. Therefore, it is certain innovative and academically valuable to pierce into their dynamic competition during the past 25 years on theory basis. With regard to China government, it would be one of the most crucial tasks to manage a balanced relationship between Hong Kong and Shanghai. Ideally, we should sent down specific orientation for each city, consider strengthening cooperation and mutual benefit and maintain proper and indispensable competition, so as to protect Hong Kong's leading position and isochronous development of both cities. This paper would try to make contribution from national strategy angle, which brings fairly practical and referential value.Based on a general review on international financial center, two sets of index system are built to measure current level and following potential of each international financial center. Then we apply the index system which measures development level to trace back the competition between Hong Kong and Shanghai during the period 1980-2005, trying to uncover the deep-seated cause behind the strength contrast. The other index system on competitiveness evaluation is used to work over their future plasticity. Finally, the orientation of Hong Kong as a financial center as well as strategy to upgrade its status are discussed, together with opinion on how to handle with the competition, cooperation and mutual benefit among financial centers.In the first Chapter, the purport and purpose of this topic is demonstrated, followed by a brief literature review. And then the innovative point of this paper is presented and the focus of this paper is confined.In Chapter Two, there would be a detail and classified review on international financial center theory, including definition, functional introduction, category/ mode of financial centers and the theoretical explanation of IFC's shaping. According to the three-dimensional model that describe development of IFC and the roller model which illuminates growth motility, two sets of measure index are set up.In Chapter Three, the comparative study between Hong Kong and Singapore is the core. After a historical review on the formation and initially development of these two IFCs, a comprehensive contrast and trend analysis is conducted to map the competition situation, considering scale index, return index, safety index, liquidity index and internationalization index. Then with functional view and event analytical method, try to explain the trend from the changes in financial system, financial institution and financial markets.In Chapter Four, the further competitive is evaluated for Hong Kong and Singapore international financial center. With the factor analysis method of SPSS, the numerical result and ranking of the 14 economies in Asia comes out. The relative advantage and shortcomings of Hong Kong and Singapore are then talked over.The last chapter, as the deepen of whole paper, lays main emphasis on the strategy to upgrade Hong Kong's position as an international financial center and points out the key to further development. And suggestions are made concerning how to look on and deal with competition among IFCs.