China's Hong Kong national security law—which could be approved as early as this week—is drawing significant backlash and has the potential to undo Hong Kong's longstanding position as a global financial center. Hong Kong is braced for more uncertainty, and Singapore is again on people's minds as an alternative.

For years, Hong Kong and Singapore have competed head-to-head to be Asia's center of professional services, from cross-border financing to dispute resolution. As legal markets, Hong Kong and Singapore couldn't be more different: Hong Kong has more or less an open regime for foreign lawyers despite a recent trend of increased regulatory oversight; Singapore, on the other hand, operates a highly regulated regime for foreign legal practitioners but has been gradually opening up. As far as opening an office is concerned, Hong Kong appears to have a much more straightforward and efficient process; Singapore's process can be more nuanced and more protracted.

But the ease of launching an office isn't the only—or, in many cases, the most crucial—factor in deciding where to base a firm's Asia presence. It's helpful to take a step back and compare the two cities in a broader sense.

Both Hong Kong and Singapore operate stock exchanges, which generate a fair amount of work for intermediaries, including lawyers. But the Hong Kong Stock Exchange is much bigger than the Singapore Exchange by most measures. As of the end of April, total market capitalization of all stocks trading on the HKEX was $4.5 trillion, nearly eight times the $566 billion market capitalization of SGX shares. In 2019, the HKEX saw 163 new companies listed while the SGX saw 11.

The HKEX's clear advantage is access to Chinese capital. It benefits from the listings of high-profile Chinese companies as well as trading programs with mainland investors. The SGX, while also vying for Chinese listings, has seen a continuous decline of listed Chinese companies and lacks policy backing from China.

Hong Kong and Singapore's respective relations with China—still the world's second-largest economy and home to 1.4 billion people—are important; they are a key driver behind the dynamics between the two cities when it comes to cross-border dispute resolution. Despite having a separate legal and political system, Hong Kong is, after all, part of China. Singapore is a sovereign nation to itself. For years, Hong Kong has benefited as China has opened up its vast market, but being part of China means that it can be swayed by the central government in Beijing, which is often at odds with the West, both politically and ideologically.

Unlike the stock exchanges, international dispute resolution is an area where Hong Kong and Singapore have really been neck and neck. The Hong Kong International Arbitration Center, which has a longer history, has been handling more cases than its younger rival, the Singapore International Arbitration Center. But the growth in case load for the HKIAC has been flat over the past decade—the institution handled 503 new disputes in 2019, after handling 502 cases in 2011. Meanwhile, the SIAC has grown exponentially, going from 188 to 479 cases in that same span. And disputes handled by the SIAC have consistently had higher values. Last year, the SIAC handled $8.09 billion in total disputes, while the HKIAC handled $4.7 billion.

Now, as Hong Kong's judicial independence is increasingly in question, it casts a shadow over the future of the HKIAC. Singapore, too, has issues with judicial independence. In the World Economic Forum's 2019 global competitive index, both jurisdictions saw a decline in their judicial independence scores. Hong Kong ranked eighth and Singapore was 14th, out of 141 countries. Singapore, though, is seen as neutral when it comes to China.

And as Hong Kong is engulfed in yet another political crisis involving its relations with Beijing, neutrality with China may be the one factor that puts Singapore ahead.