Retaining a competitive real estate advantage is key for Singapore

WHEN the Asean Economic Community (AEC) was born on the last day of 2015, it signalled that this region of 625 million people was showing real signs of fulfilling its potential. Increased economic vigour in South-east Asia might be seen as beneficial for Singapore, the financial hub at its centre. But could it also threaten that hub status?

Investment is increasingly flowing into regional centres such as Ho Chi Minh City, Manila and Jakarta (not to mention further-flung places such as Hong Kong and Sydney). So when top business leaders arrive in Kuala Lumpur for the World Economic Forum on Asean in June, many will be wondering whether Singapore will be among those to benefit from the birth of the AEC.

The 2008 global financial crisis continues to impact financial centres such as Singapore and Hong Kong. Increasingly stringent regulatory regimes have added to compliance costs and impacted the growth of the wealth management and financial services sectors. In addition, China's rebalancing of its economy, the world's second largest, has affected the export growth of countries that are highly dependent on Chinese demand for oil, metals, raw materials and machine tools.