Hong Kong's skyline

During the 2012 campaign for the position of chief executive of Hong Kong, Henry Tang, the wealthy opponent of CY Leung, the winning candidate, delivered a message to the people of the Chinese special administrative region. They should stop complaining about the high price of residential property and instead aspire to be like Li Ka-shing, Hong Kong’s most prominent tycoon, he said.

The message did not go over well. One of the local newspapers promptly did a survey of young people to establish whether they indeed aspired to emulate Mr Li, whose net worth is almost $35bn, making him the 13th richest man in the world, according to Forbes. By an overwhelming margin, the reply was negative. Instead, they said they aspired to emulate one R Singh. The then obscure Mr Singh, it turned out, was a Punjabi truck driver who had just won the lottery. Since that time, the antipathy for the tycoons has only grown as property prices have continued to rise and are way beyond affordable for even relatively well-off residents of the city. The government controls the supply of land for development, auctioning parcels at its own discretion.

Now the mass discontent with the system that results in high prices has combined with annoyance at the increasingly palpable influence of Beijing and the influx of mainland money. The conjunction of these sources of frustration has led to ever more vocal opposition in Hong Kong to the governments on both sides of the border.

The perennial imbalance between supply and demand serves the interest of the Hong Kong government which depends on land sales for a big part of its revenue. It also serves the interests of an increasingly narrow band of tycoons since it guarantees upward pressure on prices. Because the size of the plots involved grows ever larger, only the tycoons with the biggest balance sheets can play. You know you have a problem when even second-tier tycoons feel disenfranchised.

It wasn’t expected to be quite like this when Hong Kong said goodbye to its British administrators in 1997.

True there was ambivalence. After all, most Hong Kong people are the children and grandchildren of those who chose to flee mainland China after the communist victory in 1949. During the year of the handover, many locals left, at least long enough to secure Canadian, Australian or US passports if they couldn’t obtain British ones.

But the British didn’t do their best to secure a democratic future for Hong Kong. There was much resentment over how many Brits were the beneficiaries of a system that wasn’t blind to background, best expressed in the acronym Filth – failed in London, try Hong Kong.

Still, Hong Kong expected that the “return to the Motherland” would bring massive new opportunities to make money. The local language, Cantonese, they thought, would become the business language of the mainland. It hasn’t worked out that way. Instead, the mainland Chinese, including those resident in Hong Kong, have prospered disproportionately more.

The expected reverse takeover of the mainland by Hong Kong never happened. Rather than returning to the motherland, the motherland is coming to Hong Kong. Mainlanders, many of whom wish to stash their bolt-hole money in Hong Kong, are aggravating the dizzying prices at which property changes hands. They are taking more of everything from powdered milk to hospital beds.

Contrary to its image, Hong Kong has never been a bastion of free competition but instead a series of monopolies and duopolies. A recent scandal involving one of the biggest property companies and its relationship with a former chief secretary, which doesn’t involve the mainland at all, contributes to the feeling the system exists to enrich the few at the expense of the many.

The problem is that Beijing doesn’t do enough in some spheres while simultaneously doing too much in others. It has left the status quo in place economically, while being too intrusive in sensitive areas such as education and the media.

Indirect elections mean that it took only 689 votes for Mr Leung to secure his seat. That combination is the worst of all possible outcomes. That combination will also continue to fuel discontent and its expression, whether in a constructive fashion or otherwise.

Hong Kong people have never really been in control of their own fate but they are being reminded of that sad fact in more explicit ways.


Copyright The Financial Times Limited 2022. All rights reserved.
Reuse this content (opens in new window) CommentsJump to comments section

Follow the topics in this article