Singapore planned for success. Why shouldn’t Hong Kong?

For decades, Hong Kong has been told a rather strange story. The city was apparently losing out to its East Asian “twin”, Singapore, because it was too laissez-faire. Singapore planned. Hong Kong did not. Singapore coordinated infrastructure, developed skills and used the state to attract investment. Hong Kong, by contrast, relied more heavily on market signals to determine where its economy would go.

As the tale goes, the obvious lesson for Hong Kong is to become more like Singapore. Plan more, think longer term and intervene strategically. On 16 September 2026, Chief Executive John Lee heeded the call, officially announcing the territory’s first five-year plan. Its five main objectives are to achieve new breakthroughs in economic development, expand its global competitiveness, accelerate the development of the Northern Metropolis (a planned technology hub and university town), enhance social well-being, and integrate into and serve overall national development. 

The public response has been mixed. Some claim that the more interventionist stance, especially the synchronisation with the mainland’s 15th Five-Year Plan, risks undermining the dynamism that has long driven Hong Kong’s economy. Meanwhile, analysts note that a change in policymaking style does not necessarily mean that Hong Kong is abandoning markets. 

So, here is the (awkward) question — if government planning helped explain Singapore’s success, why should more planning suddenly be evidence that Hong Kong is going in the wrong direction?

Understanding planning

What Lee has outlined, identifying strategic sectors, committing the government to long-term infrastructure, and placing considerable emphasis on technology, innovation and the Northern Metropolis, is indeed a marked departure from the Hong Kong of old.

But such departure does not turn Hong Kong into a command economy in the mould of the former Soviet Union. More specifically, governments need not abolish markets in order to shape them. They build transport before firms need it, fund research institutes, and subsidise risky technologies whose social returns exceed what private investors can capture. Imperial Germany and post-World War Two Korea climbed into sophisticated industries this way. 

Singapore’s experience offers another insight. As any serious analyst would reveal, its economic model has never been laissez-faire in the pure sense. Government agencies, in concert with the private sector, have long coordinated land, infrastructure, investment promotion, skills and research. Its current industrial strategy continues to make targeted bets on niches such as advanced manufacturing, semiconductors and biomedical sciences.

To a large extent, Hong Kong’s five-year plan takes its cue from these policymaking moves. Perhaps critics were only ever asking for Singapore’s outcomes, without the state capacity behind them.

Doing a Northern Metropolis

Consider the Northern Metropolis again. It is tempting to read this simply as another huge infrastructure project or a land development programme as it covers around one-third of the entire Hong Kong. Yet this really is a move to combine research institutions, technology parks and housing in close proximity, in effect moving Hong Kong’s economic centre of gravity away from its southern tip. 

These components depend on one another. A semiconductor laboratory is not particularly useful without researchers. Researchers do not relocate without proper housing. Firms do not establish operations without decent infrastructure. Infrastructure, however ambitious, also cannot operate sustainably without sufficient traffic flows. The point is, none of these ventures can be coordinated entirely through the price mechanism because their returns hinge partly on what the others do. Without state support, at least initially, the Northern Metropolis is unlikely to materialise.

The real test

There is of course some room for scepticism. Intervention can and does produce inefficiencies. There is no shortage of white elephant projects, even in the most advanced nations. Industrial policy can function as corporate welfare while dressed up as “national strategy”. Similarly, a well-written five-year plan does not magically make bad investments good. But these are essentially arguments about the quality of intervention, rather than critique against intervention itself. 

To be fair, Lee has, on various occasions, stressed that the plan is not a planned economy. Reports also note that only five of its 22 headline indicators are binding, with the rest anticipatory. The tougher test will be whether targets are revised when they fail, whether outcomes are published, and whether Hong Kong keeps the open capital flows and legal predictability that investors prize. 

The plan also changes how we think about Singapore’s role in Asia. For years, Hong Kong and Singapore have been treated as rival cities competing for the same activities: finance, corporate headquarters, aviation and talent. There is naturally some truth in such descriptions. 

But the five-year plan suggests that Hong Kong’s larger challenge is becoming something else. For one, its synchronisation with the mainland’s 15th Five-Year Plan naturally places the Greater Bay Area (GBA) at the core of Hong Kong’s development strategy. This also means that the Northern Metropolis is to serve as a more powerful platform for deeper integration with the GBA as well as the rest of the Chinese economy.

To a smaller extent, it mirrors what Singapore is attempting with Malaysia. In early 2025, the Johor-Singapore Special Economic Zone (JS-SEZ) was formalised by Malaysia and Singapore and covers more than 3,500 square kilometres in southern Johor. In both the Northern Metropolis and JS-SEZ, the overarching goal is to leverage cross-border integration to create long-term complementarities. 

The bigger picture

Hong Kong’s move is hardly an exotic idea in 2026. Across the Global North, governments are rediscovering (or more aggressively pushing) industrial policy. The US supports semiconductor and clean energy investment. The EU talks about strategic autonomy and domestic industrial capacity. The vocabulary is different, but the underlying recognition is similar. Markets are excellent mechanisms for allocating resources, but they are not always reliable at coordinating long-term structural transformation.

Perhaps we should be more precise. Hong Kong is not necessarily abandoning the market. It is discovering the adage that markets are never simply left alone by governments but actively state-crafted and maintained. Hence, the question is not whether Hong Kong has become more (or even less) statist. It is whether the newly enhanced state capacity can stimulate more forward-looking productive capabilities for itself and the GBA.

Related: From Hong Kong to Xiānggǎng — why Hong Kong is better with China | Hong Kong’s Northern Metropolis: Castle in the air or realistic goal?