Anglo-Chinese Capitalism in Hong Kong and Singapore: Origins, Reproduction & Divergence

This article explores the historical origins of the open economic model that has prevailed in modern Hong Kong and Singapore through two major ‘critical junctures’ which shaped their respective institutional trajectories. In both countries, it was the British in the early nineteenth century that first laid the institutional foundations for an open economic model. The unique Anglo-Chinese alliance that emerged explains the widespread social acceptance of economic openness in both colonies, even in the post-war order when decolonisation typically meant a rejection of colonial economics. The aftermath of World War 2 then saw Singapore layering new developmental state institutions without totally abandoning its reliance on free trade. This was a point of divergence when the new Singapore developmental state disrupted the Anglo-Chinese institutional alliance that had previously underpinned capitalist development in both countries. My account thus elucidates the historical embeddedness and peculiarities of both countries’ political economy and why they are not so easily replicable as liberals recommend. I also provide evidence on the considerable economic progress that colonial capitalism had fostered, which places the achievements of Singapore’s state-led industrialisation in greater perspective.