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Cryptocurrency entrepreneurs are fleeing Singapore for Bangkok and Hong Kong because of high prices
Singapore is no longer the Promised Land of the middle class.
Six months after arriving in Singapore, Wang Feng made a decision to leave Singapore.
It took Wang just five seconds to make the decision, after receiving the landlord’s message. The landlord informed him that starting in May, Mr. Wang’s downtown apartment would rise from 5,000 Singapore dollars, or about ￥26,000 , to 7,000 Singapore dollars, or about ￥10,000. This is the landlord’s second price increase in six months.
Before arriving in Singapore, Wang Feng was very excited about the country — a beautiful environment, a developed economy and, most importantly, a friendly policy environment for his Web3 industry. Most of his friends went to Singapore in 2022, and watching them post on his wechat moments every day made Wang feel itchy. When the company began to implement the procedures for employees to go to Singapore, Wang Feng was the first to sign up.
At home, Wang Feng’s annual salary is ￥700,000. After he moved to Singapore, the company offered to increase his salary by 30%. Before leaving, Wang Feng also set a “five-year plan” : in five years, the EP (work permit) into a PR (permanent residence visa), and then buy a house, bring his family, settle in Singapore.
Plans can’t keep up with change. Although he had heard his peers complain about soaring prices in Singapore before he arrived, it wasn’t until Wang Feng lived in Singapore that he realized how outrageous the concept of “skyrocketing” was: rent, food and beverage prices went up again and again, and a 30% salary increase couldn’t cover the cost of living in Singapore. And the threshold for EP visa is getting higher and higher, and permanent residence visa is getting harder and harder to get.
After the domestic epidemic policy was relaxed, Wang Feng gradually began to dream of leaving Singapore, and the rising rent became the last straw.
“The comfort in Singapore is reserved for the super-rich, and the people in ordinary jobs are still very poor. Like me, working 10 hours a day is the norm.” “I’m under great pressure to work, and I have to help local people to buy a house with the money I earn,” Wang said. “I don’t know whether I can get a permanent residence or not, and this uncertainty is actually very depressing.”
In 2022, driven by the environment, technology, capital and policies, the Web3 industry and the Internet industry set off a trend of “South of the Ocean”. A large number of entrepreneurs, managers and young people who dream of becoming a new middle class migrate to Singapore.
In just one year, the middle class “South of the Ocean” has become a thing of the past, leaving Singapore has become a new trend. The main reason is that prices in Singapore are rising all the time. Singapore’s core inflation rate rose to 5.5% in January, the highest in 15 years.
At the policy level, Singapore has raised the threshold of EP signature and PR signature. Starting in September, applicants for the EP pass will also be graded based on salary, educational background, diversity of nationality and number of local employees. Candidates with a score of more than 40 will be eligible to apply.
In other words, only the best and brightest can stay in Singapore to work in the future.
The crushing cost of living
Haixin said, before the pandemic, both EP and PR were not that difficult to get.
Last November, Haixin made up her mind and moved to Singapore for work. She works as a business manager for a Web3 company based in Singapore.
“But in the past two years, policy changes have made it very difficult to get a permanent residence in Singapore.” Without permanent residence, work-visa holders cannot apply for cheap HDB flats, but have to buy expensive private flats and pay a stamp duty of up to 34 per cent. Permanent resident buyers pay just 9 per cent.
“I came to Singapore mainly because of the impact of the pandemic on Web3 practitioners in the country. And the Web3 environment in Singapore is better.” ‘she said.
Arriving in Singapore, Haixin found that the cost of living here is at least 1.5 times that of Beijing and Shanghai. “The same standard items, such as clothes and daily necessities, are priced 30 to 50 percent more expensive than in China.”
Rent is even more crushing for the coming middle class. As of last year, rents for private flats and HDB flats had risen 31 per cent and 24.7 per cent for 21 months in a row and 27 months respectively, according to the Singapore Property website.
Ms. Haixin currently rents a one-bedroom apartment for $5,000 a month, which, with agency fees, costs about ￥30,000 a month.
“For ￥30,000, you can rent a luxurious apartment in the city center in Beijing and Shanghai.” “But in Singapore, a 50-square-meter one-bedroom, even in the middle of nowhere, starts at at least 4,000 Singapore dollars.”
The stress of food and transportation can’t be underestimated.
Ms. Haixin rents a room about a 10-minute drive from her office, “which in China might be a starting price for a taxi, but in Singapore it costs about 60 renminbi, or about 60 renminbi, or more during the morning and evening rush hours.”
Haixin’s first meal in Singapore was a malatang in a shopping mall, which was probably the most luxurious one she had ever eaten in her life. “Translated down, it cost about 150 yuan.” Haixin was shocked when she saw the bill. “In China, even a malatang meal in a core shopping mall like Beijing International Trade would cost 60 or 70 yuan at most.”
Haixin is used to ordering takeout in China and doesn’t care much about the price. But in Singapore, she has all but kicked the habit — a regular two-course meal, plus delivery, costs more than ￥200. Despite the salary increase, it is still difficult to maintain the same quality of life in Singapore as it is back home, according to Haixin.
Blockchain practitioner Yunfei arrived in Singapore in December 2021. “Culturally, it’s relatively comfortable for Chinese people to settle in Singapore because many speak Chinese and there’s not much difference in food. And Singapore and China are in the same time zone, so it’s easier to work in China.”
In Yunfei’s view, the cost for families with children who want to live in Singapore for the long term is much higher than for single people.
“Because it involves a child’s education, you have to rent near a school, in a school district. And you have to hire Filipino maids to take care of the children. The price of Filipino maids in Singapore is not high, but they need to have a separate room, so they can only rent two or three bedrooms, so the cost of renting becomes very high.”
Many Chinese choose to enroll their children in international schools, where the annual tuition is at least ￥300,000, another hard expense. “Said Yunfei. Add in transportation, food and other costs, and a Chinese family with children in Singapore will have to spend close to 1 million yuan a year on basic expenses.
When Yunfei first came to rent a house, the price was still within the acceptable range, but a year later, the rent increased by 40 percent. “From 2022 onwards, the cost of living in Singapore is going up very significantly.” He believes that one of the reasons prices are rising in Singapore is that too many Chinese are flooding into the country. Especially in 2022.
Live by water and grass
But in just one year, the “South of the Ocean” began to ebb.
Yunfei said that the peak time for Chinese visitors to Singapore was in the first and second quarters of 2022, “before the market turned into a bear market in terms of the cryptocurrency industry. Many people are optimistic about overseas markets and want to come to Singapore.”
But starting from the third quarter, whether it’s cryptocurrency, Web3 companies, or traditional Internet technology companies, all entered a tightening phase of the industry, and even the leading companies with money began to lay off employees. “Maybe someone just came to Singapore and got laid off.”
Combined with the cost of living pressure, those who choose to come to Singapore are at a new fork in the road: should they stay in Singapore, return home, or seek new habitats in other regions?
In the past, Singapore has siphoned in talent and wealth based on a regulatory attitude friendly to the nascent technology industry. In 2022, Singapore will rely on Web3 to attract a large number of practitioners. But now the government’s attitude towards the Web3 industry is cooling, from positive to neutral and cautious.
When the FTX crashed late last year, some 240,000 Singaporeans, or 4.2 per cent of the population, lost their property and Temasek’s $275m investment in the company was wiped out. Singapore’s Deputy Prime Minister and finance minister Wong Sun Choy said he was’ very disappointed ‘by Temasek’s losses. Ho Ching, Singapore’s first lady and a former Temasek CEO, called the investment “a disgrace on the face”.
In the wake of this incident, Singapore has begun to re-examine the financial implications of the crypto sector.
Over the past quarter, the Monetary Authority of Singapore (MAS), the top level of the Singapore government, has expressed its attitude towards Web3 on several occasions. In a nutshell, cryptocurrencies have no intrinsic value and Singapore does not believe in cryptocurrencies. Speaking forcefully in Parliament, Mr Wong said Singapore does not plan to become a hub for cryptocurrency activity, stressing that cryptocurrency speculation is no longer tolerated.
In contrast, Hong Kong has been sending positive signals about Web3 since late last year.
On the morning of April 12, at the main venue of the “2023 Hong Kong Web3 Carnival”, the Financial Secretary of the Hong Kong Special Administrative Region Government, Paul Chan Mo-po, stressed that “Hong Kong actively embraces the development of Web3 under the premise of proper regulation.”
The Securities and Futures Commission is also consulting on proposals to regulate virtual asset trading platforms. Under the new licensing regime, which will take effect on 1 June 2023, all platforms operating in Hong Kong or actively recommending to investors in Hong Kong will need to be licensed by the Securities and Futures Commission.
Some professionals believe that the clear support of the Hong Kong Special Administrative Region Government at this time undoubtedly provides a very good soil for the development of Web3. To a large extent, it can form a gathering place for Web3 and form an industrial agglomeration effect.
Haixin said, while Singapore is cooling and Hong Kong is heating up, there has been no mass migration of workers from Singapore to Hong Kong.
“The cost of living in Hong Kong is also very high, plus some policies have just been introduced, so the uncertainty is relatively large, and many people are still in the wait-and-see stage.” “All I know so far is that the higher Level is in Singapore, and the lower level is in Thailand,” Mr. Haixin said.
Haixin also spent some time in Bangkok during the Spring Festival and met many friends. “There are a lot of Web3 Chinese workers in Bangkok, because Bangkok is relatively more inclusive and cheaper than Singapore.”
Bangkok has a good geographical location, low cost of living, easy visa application, education and medical care as well as the level of domestic first-tier cities, and positive policies for the emerging technology industry. As such, Thailand seems to be the next place for Chinese Web3 startups.
At present, the start-up ecosystem in Bangkok is dominated by application projects such as centralized exchange, gameFi and NFT. Phuket has gathered some Defi (decentralized finance), Dex (decentralized exchange) and infrastructure projects.
“Some of them also went to Dubai. But for the Chinese, Dubai is probably a fourth choice after Singapore, Hong Kong and Bangkok.” “Hechin said.
The B-side of the middle class flight from Singapore is that the rich are still lining up to come.
Prime Minister Lee Hsien Loong once said, “Although there are only 3.5 million Singaporeans, there are probably billions of people lining up to enter Singapore.” Singapore is expected to add 2,800 dollar millionaires in the first half of this year, bringing the total to more than 240,000, according to Henley&Partners, a London-based investment advisory firm. Singapore ranked fifth in a list of the world’s 20 cities with the most millionaires, behind New York, Tokyo, San Francisco and London.
In 2019, Haidilao’s Zhang Yong became the richest man in Singapore with a fortune of $13.8 billion. After Zhang, Li Xiaodong, founder of Donghai Group, known as the “Tencent of Southeast Asia,” became the richest man in Singapore. And the currency circle boss Zhao Changpeng, photovoltaic boss Shi Zhengrong and so on have immigrated to Singapore.
Wang told China Entrepreneur that it is also common for the Web3 industry to have Chinese bosses in Singapore, with the rest of the team at home or in Bangkok, where cost pressures are lower.
“Singapore is not a paradise for the middle class, but a paradise for the rich.” Wang Feng sighed. It was his latest realisation.
(Wang Feng, Hai Xin and Yun Fei are all pseudonyms.)