Perhaps more than any other place in Asia, Hong Kong’s energy comes from a powerful relationship with the present. The past is always being obliterated and the future is something you worry about when you get there. After several years living in the city, it can be difficult to remember how certain neighbourhoods first appeared; buildings are torn down and new ones go up in the space of months.

This disorientation becomes a way of life. If you find a good shop or restaurant, it’s important to ask for a business card – finding it again by memory, amid the camouflage of neon lights, can prove almost impossible. You learn to feed your spending impulses immediately: chances are that a store will have closed down or changed hands by the time you make it back.

But if you really want a study in “the power of now”, ride the lifts at Chungking Mansions.

Built in 1961, the building is one of the world’s favourite flophouses. A jumping-off point on the hippy trail during the 1960s and 1970s, it became a staple entry in most dog-eared travel guides. Its five connected blocks (A-E) sit clustered like a gigantic decaying tooth on some of the most expensive real estate in the world – the southern end of Hong Kong’s ritzy Nathan Road. The complex is a stone’s throw away from the Peninsula Hotel and its guesthouses are close to 30 times cheaper than that hotel’s most modest rooms. Barnacled with window-mounted air-conditioning units, hung with the grimy signs of defunct businesses, and haphazardly renovated, the building is pushed to the very limits of its capacity – electrically, mechanically and in terms of density.

Old China hands will tell you that Chungking Mansions has lost much of its edgy charm since its lifts were refitted five years ago, a nostalgia that seems more like a death wish when you see what the current elevators have to cope with. At 6pm on a Saturday afternoon, the queues stretch back down Chungking’s fluorescent-lit tunnels. There are Indian touts and their Filipina girlfriends, exhausted backpackers, serene middle-aged American couples, don’t-mess-with-me Russians and African women in voluminous printed dresses. They could be extras from Blade Runner forced into a fire drill.

At the end of the queue waits an interminable lift journey. The building has 17 floors and the elevators invariably stop at each floor on the way up and down. By the time it has creaked to the top and back, the lift looks like it might die: 10 people cram into a space meant for seven and the overload alarm lets out a mournful electronic bleat. Whereupon a portly Bangladeshi bustles through the doors and wedges himself inside as if he’s performing a star jump. The alarm might now be shrieking like a gibbon – but the lift can evidently be tricked into taking more than its legal load.

In these elevators, the future lasts only as long as the ride to the floor you want. After that, the overloading is someone else’s problem – until, of course, you want to go back down again.

There are 980 rooms honeycombed throughout Chungking – which means “great (or repeated) good luck” – some of them just big enough for a double bed. The guesthouses are cheap – little more than £10 a night for the most basic – but the shower usually drains directly into the toilet and the decor stretches to large white bathroom tiles on the floors, walls – everywhere. You’d be more comfortable sleeping in your own bathroom.

On any given day, the complex is estimated to be home to 4,000 residents with as many as 10,000 others milling around the scores of tailors and cheap electronic goods shops. It used to be something of a no-go area, a stalking ground for prostitutes, smugglers and drug traffickers, but has since reinvented itself as a chic, if grimy, staging post for holidaymakers to Asia. But gentrification remains a long way off: in Chungking, middle-aged budget travellers rub shoulders with Pakistani and Bangladeshi immigrants and African traders. There’s a feeling that you’re not in Hong Kong any more but some kind of globalised souk.

A walk up one flight of stairs from the ground floor to the mezzanine level reveals one of the sinews of trade between China and Africa – that of the lively business in mobile phones. Chungking Mansions supplies up to a fifth of all the mobile-phone handsets in sub-Saharan Africa. As such, it’s a study in how a low-end, globalised economy works, a Petri dish without equal.

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Hong Kong’s trade with Africa gives off a peculiar sound – of packing tape being torn off a reel, and at Chungking Mansions the noise goes on deep into the night. Lagos … rip, rip. Nairobi … rip, rip. Abidjan … rip, rip. Hundreds of boxes are trussed up in China’s ubiquitous woven ­plastic fabric, called simply “red-white-blue”, and destinations scrawled on the side in black marker pen.

“Hey, Obama!” A Pakistani mobile phone trader, standing amid a drift of discarded mobile phone boxes, calls out to a passing Nigerian trader.

“Yes, Osama?” he replies.

“Yeah, Osama and Obama,” the phone trader shoots a wry smile. “Together we’re going to change the world!”

Gordon Mathews, professor of anthropology at the Chinese University of Hong Kong, has made the study of this building his major work. For the past two and a half years, he’s spent a day a week here, and while at first he was drawn by Chungking’s various tribes, he has since begun to focus on the intricate skein of economic relationships largely established through the trade of handsets. “There is a dizzying variety of phones,” he says, drawing breath to list them. “There are new European and Japanese phones. There are 14-day phones, which are warehoused European models – last year’s model with a 14-day guarantee. There are used phones, which are simply used. There are refab phones which have been redone by factories in China, often not as good [as the originals] because their motherboards have been replaced. There are A-grade fakes, B-grade fakes and C-grade fakes.”

The prices of these refitted phones are based entirely on what the market can bear; a novice trader who expresses any sort of surprise over a new model can expect to be charged a premium; a seasoned trader will know the market in Chungking Mansions as well as the market back in Gabon.

“The traders speak in this interesting code,” says Mathews. “No one ever mentions the word ‘fake’.”

There are often no direct markers such as serial numbers on the phones and even the vendors themselves claim they have little idea how many they sell. A Chinese trader, who only gave his name as Sam, said he was “too busy” to know how many handsets he traded. The most popular model in Africa at the moment, he says, is one with a “voice changer”. Flick a switch and it makes a man sound like a woman and a woman sound like a man.

What possible use could that have? “For…”, and here Sam says something that sounds like a cross between “fun” and “fraud”, leaving you with the perplexing feeling that, in the world of Chungking Mansions, the two are interchangeable.

Mathews says that by speaking to various traders at the complex, he has arrived at an estimate of the number of Africa’s handsets supplied by Chungking Mansions’ 90 handset dealerships. He says at least 10 million units are sold from the building a year; because a good proportion of sub-Saharan Africa’s estimated 126 million subscribers have one phone but more than one SIM card, Mathews estimates that Chungking could be supplying 15-20 per cent of those handsets.

Some countries take more phones than others. In Kenya, about 70 per cent of the handsets come from Chungking Mansions. Mathews leans across the table to check the figure with a rangy Kenyan in his mid-20s sitting down to a curry. “It’s more,” says the trader. “In Kenya, it’s more like 80 per cent of phones come through Chungking Mansions.” He says he has made eight trips to the building this year and likes it because it’s “convenient and safe”. Like businessmen everywhere, he prefers doing trade in a good regulatory system with the rule of law: as haphazard as Chungking might appear, Hong Kong does offer that.

As far as transportation goes, the traders are so numerous and the consignments so light that their cargo reverses standard economic logic. The container ship may be the symbol of globalisation in the 21st century, hauling vast quantities of wine, food and furniture from continent to continent for a fraction of the cost it would take by other means. But at the Chungking end of the economic chain, it is air transportation, perversely, that makes mobile phones in Africa so cheap. 

Arrive at Chungking Mansions with little more than the clothes on your back and cash in your pocket, and a 20kg baggage allowance might seem an almost absurd gesture of largesse on the part of the airlines. With most handsets weighing between 50g and 80g, about 250 mobile phones can go in the hold and another 120 in hand luggage. Add to that the extra baggage allowance permitted with frequent flyer points and the margins on transportation are further decreased. All over the building, traders can be seen stuffing sports bags until the zips are near ­bursting.

. . .

China has made much in the past two years of its special relationship with Africa, in part because it hopes strong ties will help secure it access to the continent’s natural resources. But as with all colonial plays, it’s hard to know who is colonising whom. Beijing may have a strong presence in Zambia, but Africans are in their own way carving up southern China. In the handset trade, the anglophone Africans have taken Hong Kong and the francophones nearby Guangdong ­province.

“Strangely, it’s one of the reasons the Triad gangs have made little headway here in Chungking Mansions,” says Mathews, referring to the organised crime network. “They’d have to speak English and they’re not comfortable with that.”

Although Guangdong offers fortunes of its own, Hong Kong remains the preferred centre for handset dealers. “You can make a lot of money there but there are no good laws in China. I am afraid of China,” says 29-year-old Kingsley Igbom, whose minimum consignment is 5,000 phones a trip. “They think Nigerians are bad and won’t give them visas – the conditions there are simply not conducive,” he adds. “They’ll sell me the handset but then won’t allow me to ship them with the battery. I mean, what is that? What good is a handset to me without the battery? The thing about Chungking Mansions is that it’s more expensive but it’s better organised.”

Igbom says that all Chungking traders need is money, and everything else – from the handsets to the packing to the weighing to the dispatching – is done for them.

At the moment, his biggest headache is securing his next consignment. It’s not long into the financial crisis, but, while the trading is still frenzied, everyone in the building – from the packers to the traders to the shopkeepers – already owes everyone else money. In many cases, substantial amounts. And since the business is so public, so is the pleading.

A south Asian packer sidles up to Igbom and a conversation ensues, ending with the sentence, “Look, you will get it,” a kind of debtor’s mating cry that can be heard all over the building.

Igbom runs a seven-man operation importing cheap Chinese handsets to Nigeria and signs his boxes “For God”. “I am a Christian and he is my boss,” he says. He also wraps his boxes in chicken wire “for security”, to deter casual blades when the consignment goes through customs in Africa. The boxes are taken to a dispatch room in the bowels of the building and collected down a side alley through a small door.

Right now, the ruinous rate of exchange between African currencies and the US dollar is a bigger threat than bent customs officials. In Chungking, most trade is in either Hong Kong or US dollars. “In one week, the Naira [the Nigerian currency] has gone from 118.4 to the US dollar to 145, but that’s not the problem,” Igbom explains. “The problem is availability. In Nigeria, you can’t even get US dollars any more.”

If the global outlook for corporate giants is grim, for highly exposed traders such as Igbom, it’s financial Armageddon. For him, there’s no fat, and this year he may sit out the financial crisis and resort to subsistence farming. His only hope is that Nigeria’s telecommunications boom – which only started in 2001 when the state-run monopoly was broken – will see him through the slump. With 10 million new subscribers a year and mobile phone penetration rising from 0.73 per cent in 2001 to 32.79 per cent in March 2008, according to figures from the Nigerian Communications Commission, it may not be a vain hope.

For Igbom’s supplier, Umar Hayat at Nile International, the situation is calamitous. His family, which originally comes from outside Peshawar in Pakistan, has lived in Hong Kong since 1966 and they source their own Neox-brand phones from China. He says they’re now looking at a worse year than 2003, when business was hit by the Sars epidemic.

“Credit? Credit?” Hayat says, incredulous at being asked if that’s a problem for his business. “We are crying from credit! Come around here and have a look at this.” He motions to an Excel spreadsheet on his computer screen. “We have almost HK$2m owing over the past few weeks alone. Here, look, this is just what I’m working on at the moment. This column is Hong Kong dollars – that’s more than 740,000 in Hong Kong – and that other column is 79,000 in US dollars.

“We don’t know when we’ll get paid. We’ll get paid when they make a profit,” he says, looking out at the African traders packing boxes. At what stage will he stop giving credit? “In this business, you can’t do business without credit. The margins are terrible now in mobile phones. I’d be better off dealing in vegetables. On each phone we are losing about HK$45.”

Further up the gallery, a local Hong Kong operator who gives his name as “Mr Wong” tells the same story. “We used to sell the lowest models of brand names, but now we can’t sell those any more. We can only sell China brands” – code for the fakes that come out of the mainland. He adds: “The traders are all asking for credit now, and they’re asking for it for longer.”

Just at that moment, an African trader skips past, making an I’ll-be-right-back gesture and flashing a cheeky smile. “Have you got something to give me this time,” Mr Wong calls after him. He turns to me and rolls his eyes. “It’s a money problem.”

That 90 identical businesses can still survive cheek by jowl in the same building, and under these testing conditions, is a tribute to the obvious synergies that come with their proximity, but it’s still a cut-throat world. “I tell you this,” says Igbom. “People in Chungking Mansions are tricky. If you hear of a good price for handsets, you buy, you keep your mouth shut and then you go.”

. . .

In the same building but occupying a different universe, 24-year-old German economics student, Toby Schwigon, is on the last leg of a study tour through mainland China. He’s getting a gentle lesson in Chungking’s sometimes skewed market forces: even though he is staying at possibly the cheapest guesthouse in the building, it doesn’t quite represent value for money.

“I think the price/value ratio really goes down as soon as you follow a tout, but I’d only just arrived in Hong Kong,” he says. “I was tired and I thought, what the hell. I’m sure a lot of people get caught like this.”

While he admits that his hometown of Munich sets a high benchmark for cleanliness and order, his accommodation here, at Chungking’s “Disney Deluxe” guesthouse, is in a different league entirely.

“Yeah, the Disney Deluxe,” Schwigon says, picking his way through a plate of curry. “It’s not exactly the Magic Kingdom.”

Peter Shadbolt is a news editor with the FT in Hong Kong