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Dear Malaysian Chinese: Is Singapore Truly Better?

Hi there, Happy Merdeka, MJ here.

Whenever I chat with my fellow Malaysian Chinese about MY vs SG, a good 8/10 times they will consider SG a better place to live/work.

The reasons are the usual suspects:

"Stable politics" "Higher pay"
"3 vs 1" "Better English"

Boomers and millennials hardly ever agree, but this is a glaring exception in my experience. Particularly true when it comes to matters of wealth generation and money.

I've never really thought hard about this until recently. I've been to and stayed in both countries but never really dig deeper into a fact-based, data-driven comparison. Until now.

If you know me or the FIRL team well, you know we do not regard slogans like "3 vs 1" as replacements for sound research and arguments. Generally, we are always skeptical of popular beliefs, except for things like 'don't kill and steal' of course.

With this, let's take a look at what the facts say.


It is a finished debate among many that Singapore is the place to be if you want to create more wealth and income. On the surface, this is true.

The best, but not perfect measure of economic productivity of a country is GDP per capita(GDPPC). Lee Kuan Yew, the founder of modern Singapore, finds this to be one of his most-used metrics to size up his favorite island, which I agree with.

GDP is the 'stuff' the country makes in USD terms, and per-capita signifies how much 'stuff' each person in the country makes. The 'per-capita' is important because size does not always matter; Economic effectiveness per person in the country matters more. Any good businessman would prefer to build a business where the income generated per employee is 20k vs 10k. Another way of thinking about GDPPC is the amount of income a citizen generates in a year. In this department, there's no doubt as to who wins.

As of this writing, Singapore's GDPPC is a whopping ~65k USD, but Malaysia's is just ~11.5k USD. However, if you are paying attention, I am writing this to someone who is Malaysian Chinese. With this, some adjustments are in order.

It is an uncontested fact that the Chinese are the most economically productive ethnic group in Malaysia, this is not a chauvinistically driven conclusion. In fact, the whole point of the NEP and NDP was to boost the economic equity of the majority in this country(Bumiputera) to around 30% from 2.4% in 1971. Who dominated the other 97.6%? The Chinese.

Today, the NEP has done well to boost Bumiputera contribution to 16-20% of the nation's economy. A good 9X since 1971 and moving in the right direction. This implies that non-bumiputeras still dominate around 80-84% of the economy, with the Chinese leading the pack.

It is hard to gauge how much of that 80-84% is Chinese contributed, but 'massive' is an understatement. A quick look at the 50 richest people in Malaysia will tell you that 86% of them are Chinese. My conservative estimate of the Chinese contribution to the Malaysian economy is 70% today.

**IMPORTANT: This does not mean that others do not contribute well to the economy. In fact, they all do, in awesome ways as well. Also, as they say: Money is not everything. None of what I say is in any way, shape, or form implying that the Chinese are superior beings. If anything, our shortcomings as a group are not very hidden.**

I will spare you the math, but based on the latest GDP estimates and population numbers, the average Chinese Malaysian has a GDPPC of ~33k USD. This closes the gap and definitely puts us in the top tiers of global GDPPCs. However, Singapore's is still 2X higher. End of story? Not quite.

SG and MY should not be compared in such a blunt way. Although on paper SG is a country, it operates more like a city.'s a city-state!

What I am trying to say is comparing KL and SG(both cities) is a lot more apt, instead of the entire MY. With this, what does the GDPPC look like?

With the Chinese being slightly over a third of KL's population and the city having a GDP of ~RM 260 bil today by my estimate, their GDPPC is a stunning ~70k USD.

I know, it's hard for a lot of us to believe that the average Malaysian Chinese in KL actually makes more than the average Singaporean. But the facts are the facts.

Before I move on, know that these are averages - it doesn't mean that if you pick a random Chinese in KL you will discover that he earns 70k USD a year.

** VERY IMPORTANT: According to The Edge, the average Malaysian Chinese household income is 40% higher than Bumiputeras and 20% higher than Indians. This difference does not seem as big when referring to GDPCC numbers. However, do note that GDP is not just household income but also business/corporate income. Total household income in Malaysia only accounts for 45% of GDP. In other words, the remaining 55% of the income/wealth generated in the country is located within the successful businessmen in Malaysia, most of whom, as we've seen in the Forbes rich list, is Chinese. Also important to note is much of the wealth generated by business people comes in the form of business valuations like the stock market or private equity, not income. Although I don't have the numbers, this strongly suggests that Chinese wealth might be way higher than the reported numbers. **


When you look at the numbers below, what can you conclude intuitively?

GDPPC of the average

Japanese: ~40k USD

Malaysian Chinese: ~33k USD

South Korean: ~31k USD

Taiwanese: ~25k USD

I won't be sure of your interpretations, but when I arranged these numbers, I noticed that of the 4, the Malaysian Chinese probably has the lowest cost of living, which makes the USD in Malaysia feel a lot bigger. This leads me to the next version of GDPPC.

GDP Per Capita (PPP). PPP = Purchasing Power Parity.

GDPPCPPP is very similar to GDPPC, the difference is that it not only measures the amount of dollar a citizen generates but how much he/she can buy with that dollar. Now, I am not going into the issues with PPP(like any metric it is not perfect), but it is true in a broad sense. I'll get into more details later.

Once again, I'll simplify the math for you. Based on the latest numbers, the average MY Chinese will have a GDPPCPPP of ~93k USD vs SG's ~97k USD. Basically, neck and neck!

And if you use KL numbers, that number goes to a stunning ~195k USD! Basically, the average MY Chinese in KL generates 2X more income in GDP and PPP terms vs the average SGporean.

Some of you more sophisticated ones will challenge the idea of PPP and rightly so as it uses a certain basket of goods(manipulatable) to measure how 'stretchable' a dollar is in each country.

So, let's get into some of the key items that should be in a person's basket of goods.


I'd love to get into more than just these 2. Education and healthcare are important things to consider but it deserves a post on its own given its complexity. So, I'll just focus on simpler things like where you stay and the car you drive.


The average house in Singapore is valued at ~390k USD, while for Malaysia it's ~101k USD.

This puts SG's housing affordability at 6X annual income(GDPPC) and for MY Chinese at 3X their annual income! The number is also similar in KL.

It is important to note that in SG, you have massive subsidies for housing. For those familiar - HDB flats. The SG government makes housing affordable for ~80% of Singaporeans by subsidizing land costs. This is why the HDB loses roughly 2 billion SGD every year before getting government grants.

You can confirm this with your construction friends but for any residential building, land cost roughly accounts for between 30-40% of the total purchase value. In other words, the true cost of an average house in SG is not 390k USD, but closer to 510k USD at least. Even with government subsidies, the affordability of housing is still a lot lower than MY. Imagine if the MY government gives each Malaysian RM 120k just to buy a house, that's pretty much what the SG government is giving their own citizens.


Let's use the Toyota Vios 1.5G for example.

In SG, it will cost you ~77k USD, in Malaysia ~21k USD.

Affordability? 1.2X GDPPC vs 0.62. In other words, it only takes half the average income to get the same car in MY vs SG.

Now, of course, you might argue that Singapore has the COE, which is sort of a tax on cars to prevent road congestion on the tiny island. Fair point, but this is not a discussion about whether the COE is good or bad. The end result is all that matters to you and me; In SG, cars are way less affordable.

You might also say that you don't need to get a car since public transport is efficient, which is true. But consider this: While not entirely provable, it is my observation that many in SG still dream of owning cars and in fact see it as a status symbol. So, the desire for a car in SG is very real.

Obviously, there's a lot more to cars than just purchase price; Things like fuel, parking, and tolls contribute too. But this gives you a good comparison.


In my brief look into this, I can safely say, at worst, the average Malaysian Chinese is on equal footing with the average Singaporean when it comes to economic productivity and income.

Even if the income levels are a lot higher in SG(which is not, as I've shown in this post), the crucial question still isn't answered. It's not just how much you make or in what currency you make it, but how much of it you can stretch. If no good investor would analyze a stock based purely on revenue size, neither should any of us for personal income.

Some of you might resist my points and cite other things like politics to make the case for SG, and you might be right. But one thing is for sure, SG's economic elevation over MY as a Chinese is not as clear-cut as many think. In fact, you might lose more if you relocate. You might also argue that averages hide things - which is true. Perhaps a few rich Chinese in MY drags the average up, resulting in a distortion of GDPPC. But this is also true for SG, producing the same difference in the process.

Side note: Notice that an essential like food was not included in my discussion? SG really beats Malaysia out of the water in this department. Food is way cheaper in SG vs MY on a PPP basis, or even on a dollar-to-dollar basis. Chicken rice can cost you 3-4 SGD but in Malaysia, it's 6-8 MYR. Well, to me this is fair. You would expect less tasty food to cost less ;)

The notion that you get better opportunities for wealth growth in SG is not very clear to me on a broad level. If anything, the opposite is true. Of course, you might read this and cite a specific circumstance that SG is better: you are an English translator and SG might pay you 7X the income. Or maybe you can subsidize your expenses by living with a generous uncle. If these are your situations, it is not a bad idea to move. But my point remains: At worst, Malaysia isn't that bad. Realistically, Malaysia has the edge. At best, Malaysia is far superior and we should be grateful.

And if you're Malaysian Chinese and wonder why you don't earn 33k USD a year, is Malaysia really the problem?

Hope you learned plenty by reading this.

I anticipate a healthy debate and objections. Come tell me why I'm wrong in the comments!

The information in this post is accurate as of the posting date. These are just the opinions of the FIRL Guys and do not in any way represent investment advice or stock recommendations, the content in this post is purely educational.

Information in the post might not be applicable to all investors as it does not take into account the financial circumstances, investment goals, and risk tolerance of any specific investors. Risk is inherent to all investing, including the permanent loss of capital. Past performance does not equal future results. We are not licensed by Malaysia's Securities Commission as financial/investment advisors. Please speak to a licensed financial advisor before making any financial decisions.

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In short, work in Singapore, live in Johor. Boom! Having your cake and eating it too! Happy Merdeka!

Sep 01, 2021
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