Correct me if wrong -
There is NO capital in HK. HK is like the receptionist desk of a Hotel. Albeit a very beautiful seductress of a receptionist to whom many customers would flock to. It is not as if HK people invest in Alibaba. It is the corporations and individuals from around the world that chooses to invest through the HKSE. The HKSE collects a charge over the handling of the investments. The HK people benefit from the brokerage and what not. They are confident of HK's judicial and laws that they know they have some security. There is less scrutiny of the origins too.
Why can't signapore be an alternative. Better yet, why not make Shanghai the ideal one? Human Resource seems to be the one major factor. Or going by my very flawed comparison- the receptionist isn't attractive enough.
Well, it is more complex than just a front reception analogy. I'm afraid!
As solarez said, Hong Kong has wealth, tied up in the form of real estate. This is monies that was earned, and it's considered savings.
Hong Kong also have the "rule of law". (I hate this words, as implies others don't have the rule of law, which obviously not true)! The rule of law they on about is the western style, which means foreign companies can operate in an environment they understand and "trust"! So they can invest with confidence! In finance. CONFIDENCE is everything! Take us for example, would we be carrying those greenbacks in our pockets if we don't have confidence in their purchase power!
This confidence reduces dramatically when investors are looking at Shanghai or scehzen.
Meanwhile, Singapore can supplied that confident. BUT Singapore is not part of China, so it lacks something that Hong Kong has. That is it's part of China, but at the same time not part of China. If you get my meaning!
So CURRENTLY, investors still believe Hong Kong is a best choice location to invest their money as it offered protection like Singapore, unlike Shanghai. But also offered access to the biggest market in the world, unlike Singapore, But like Shanghai!
So it basically Hong Kong has the best of both worlds!