Has Hong Kong reached its tipping point as a world centre? The New York Times correspondent suggests the city is now “too crowded and expensive for its own good.”
The case for the defence would be this. One: people have been saying this sort of thing for years. Two: parts of the article are debatable. For example, the shortage of office and school places is especially pronounced in Hong Kong Island, and there are alternatives elsewhere; the ‘full-to-bursting’ airport is a result of low landing fees and thus inefficient runway usage. Third: is the article’s premise even logical? If Hong Kong is past its prime, why are the rents still zooming up? Conversely, aren’t London and New York approaching their tipping points too, as their property prices rise? Could it be that in fact all these cities are taking another step up the productivity/value-added ladder, pushing less profitable activities out to the suburbs or the Shenzhens and New Jerseys? The defence rests its case, and we note how boring and sensible it is.
The case for the prosecution would be much more fun, because it would all come down to this: it’s all Donald Tsang’s fault. Hong Kong’s last Chief Executive, it is now becoming clear, was a far bigger disaster for this city than his hapless predecessor Tung Chee-hwa ever was. Hong Kong is reaching bursting – thus maybe tipping – point because Tsang did three unforgivable things.
First, he deliberately starved the city of land supply, and made no effort to encourage developers to build in accordance with the local population’s needs. Thus we now have a serious shortage of affordable homes, eye-watering rents, blocks of empty luxury apartments and insufficient office space.
Second, he compounded this deliberate shortage by allowing a massive influx of Mainland visitors and money-launderers. This is a Beijing policy, but as Chief Executive he could (surely) have requested that the liberalization of travel permits be more gradual, given the lopsided nature of 1.3 billion people vs a 400-square-mile city. With a shortage of space, the influx simply displaced existing economic activity, further pushing rents up and concentrating the economy in fewer hands.
Third, Sir Bow-Tie lavished outrageous sums of money on pointless infrastructure projects like the Zhuhai Bridge and the high-speed rail to that suburb of Guangzhou we can never remember the name of. As well as wasting our land and money, these schemes are now putting serious strains on supplies of construction personnel and materials for worthwhile developments. With the bills now coming due, they also threaten to put the government’s budget into deficit for a while. That’s not a problem given the vast reserves, but deficit spending during an already over-heated time like this is what economists call ‘pro-cyclical’, or as the rest of us would put it, ‘stupid’.
The rights and wrongs of the New York Times article don’t really matter. We are being crushed on the sidewalks and trains, choked by rents and prices, squeezed out of schools and hospitals, and we need a scapegoat – no, a real, live perpetrator – and now we have one.
Why did Donald Tsang do it? What was his motive for committing this despicable and malicious crime of cramming Hong Kong into a pressure cooker and turning the heat right up? Who benefited from each of his sins? With land supply it was developers; with Mainlanders it was landlords (developers); with infrastructure it was construction interests (developers plus some civil engineers). Here is another question. To whose homes (I am reliably informed) did Donald Tsang in office often go late at night to play cards, being allowed to win? No prizes for guessing. (I don’t know which ones.)
The obedient masochists of the CY Leung administration refrain from pointing the finger at the instigator of their and our problems, and refuse even to defend themselves as pro-Donald tycoons, media and stooges beat them up over their latest little contrived scandal in the form of Franklin Lam. Instead, we are surely owed a Gu Xilai-style show trial.
Meanwhile, Hong Kong displays its pragmatism, realism, grit and perhaps sense of satire for all the world to see by announcing its favourite brand (and, I shouldn’t wonder, maybe one day its only one).