I bet Andy Xie can pay his rent with no problem

South China Morning Post columnist Michael Chugani says he thinks Hong Kong’s pro-democrats are more to blame for unaffordable housing than Chief Executive-of-six-months CY Leung. They could, he points out, have used the years they spent fruitlessly demanding universal suffrage lobbying for livelihood issues people care about. He says his landlord absorbs nearly half his income, which suggests that he is, sadly, seriously under-achieving career-wise, or that his choice of living accommodation is overly lavish and he should downsize to something more modest. Or a bit of both, of course.

(On the subject of columnists or any other people who possibly need to augment their earnings, I was recently reliably informed that competition among paper/cardboard scavengers has intensified. And what do I see over the weekend other than positive proof: an elderly lady painstakingly pulling advice slips out of the ATM waste bin outside HSBC on Lyndhurst Terrace, Central. It took her even longer than the people who make you wait to get cash while they shuffle funds around multiple accounts with different cards.)

Across the page, economist Andy Xie maintains his maverick reputation by approving of CY Leung’s recent policy address. Xie is famous for being sacked when employer Morgan Stanley grovelled to the Singapore government after he mass-emailed comments about the Lion City’s role as a money laundering centre for corrupt Indonesians. In that same email, he mentioned how most Singaporeans have seen little if any increase in living standards despite years of economic growth (as Punggol East voters were no doubt aware on Saturday). In today’s SCMP, he says much the same about our own little ex-colonial paradise ‘financial services hub’.

Xie is a fan of CY’s plans to reclaim, baby, reclaim. (Given the almost grotesque bureaucratic and political, let alone environmental, barriers to sourcing extra land onshore, many observers see reclamation as the only realistic way – other than invading Shenzhen – of creating more space for Hong Kong. The policy address gave the impression that CLK Airport-style artificial islands would be off the Western New Territories coast; looking at a map, you could shove them in south of Tuen Mun or off the Hong Kong coast on Shenzhen Bay.) His thesis is that Hong Kong is headed for serious social and political problems if it does not give people a better quality of life, notably bigger, yet affordable, homes. Only this will compensate for the stagnation of incomes by both cutting costs and making life more enjoyable. This is also in line with CY’s comments in the past, warning that people will simply quit Hong Kong if it does not significantly increase residential square feet per person in the next 20 years.

Xie’s conclusion is that this would keep Hong Kong stable, and that the alternative is ‘the downfall of the plutocracy’ – but surely the big-homes-on-reclamations plan implies the end of the property hegemony, too.

Cynics doubt CY’s commitment to change, and Xie’s article opens with a scanario that many of us deep down assume will in fact happen.

Hong Kong’s current property bubble is the result of much-vaunted expectations that US quantitative easing* will debase the US/HK dollar massively. But the anti-Keynsians and gold freaks seem to be overstating their case. The purchasing power of the dreaded ‘fiat money’ is holding up quite well in terms of, say, commodity prices and other assets and currencies. Hong Kong’s retail price increases seem to be largely RMB/Mainland-influenced. Our property prices are doubling to compensate for a halving of the US dollar that maybe isn’t going to happen.

So… The crash happens, prices halve, the landed middle class freak out and wet themselves a la 1998, CY Leung and team go into Donald Tsang-style push-prices-up-at-all-costs mode, and the whole rigomarol starts again faster than you can say ‘buying opportunity’… 

*A little friendly word to RTHK Radio 3: your morning business news announcer does not need to interrupt interviewees constantly to request definitions of ‘quantitative easing’, ‘gini coefficient’, ‘A shares’ and other simple terms that everyone understands.

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26 Responses to I bet Andy Xie can pay his rent with no problem

  1. Bela Bated says:

    What’s with this afternoon updating lark? People expect to read you over lunch, not at tea time. Are you slowly becoming like most Hong Kong bloggers?

    That Big Lychee High Tea Menu In Full

    Fresh iTuna Salad

    Cheesed-Off Sandwiches

    Shot Dogs

    Indonesian Crumpet

    HSBC Profiteroles

  2. Old Timer says:

    Chugani’s rent woes come only second to the fact that he used to work in Washington DC when it comes to frequently mentioning his personal life on Newsline. Did anyone notice him inadvertently waving his notes around for all to see, in 24pt type, while “interviewing” CY last night?

  3. Sir Crispin says:

    The more things change, the more they stay the same.

  4. Joe Blow says:

    ‘gini coefficient’ sounds like the name of a Wanchai stripper.

    btw, what are A shares ?

  5. Property Developer says:

    Chugani is in the same trap as Kammerer: both decent, well-meaning fellows, but scared out of their wits at the idea of losing what we in the trade call mauvaise conscience, so they seek safe social issues that won’t get them labelled as troublemakers. Can’t see either of them lasting much longer.

    Andy Xie is the opposite, with a chip on his shoulders that makes him tear into the conventional wisdom and constantly predict economic armageddon. At least he’s not afraid to comment on China, which probably makes him a much more lucid writer than most.

    I was planning to include the most prolific Hemlockian responders in the above characterisations, but panicked at the last moment.

  6. urban says:

    Another friendly reminder to Radio 3 (or its staff, at least): In the petiton published today regarding the proposed amendments to the Companies Ordinance and the availability of details of directors, is a coincidence that many Radio 3 staff names are incorrectly spelt? Or is it something more sinister?

  7. Stephen says:

    So… The crash happens, prices halve, the landed middle class freak out and wet themselves a la 1998, CY Leung and team go into Donald Tsang-style push-prices-up-at-all-costs mode, and the whole rigomarol starts again faster than you can say ‘buying opportunity’ …

    For a property crash in HK to happen it usually needs an external event not some punitive legislative tax. And whilst the current “let’s make more land available and build baby build is a rerun of 1997 / 98” it was not this that caused the ’98 crash.

  8. Jeff says:

    Your comments on Chugani are out of line. There are thousands of people and families in HK suffering from huge rent increases right now, and for the past 2 years.

    Huge rents are also pushing the price goods in every store and restaurant in Hong Kong.

    Combined with absurd school fees, middle class hard working people that missed the chance to buy in 2003-6 are in real trouble.

    And don;t say ‘Go Home then’. I have almost zero professional connection with my country of birth, and have contributed 18 years of hard work and taxes to this city.

    I chose to come here, and no place is perfect. But what is happening to myself and my peers who do not own property in Hong Kong right now is indefensible, and grossly unjust.

    Reasonable Rent controls are EXACTLY what this city needs now, and will always need, from now on. This is not the MacLehose years, circumstances have changed, permanently.

    Sure I”l pay your mortgage if I rent your place. But why should you expect huge profit after that? I’m paying for your growth in equity, and with almost no rights on termination of lease or upkeep of flat.

    If you are not a property owner, forgive me, but your comments were clearly the typical callous ‘I got mine Jack’ type of home owners in Hong Kong these days. Grotesque indeed.

    No I am not jealous, I do not resent you. And you do face the risk of loss of value. Not that this has happened for the last ten years. But have some thought toward others.

    I thoroughly enjoy your blog, and your intelligence, and I would expect a little more liberality from you on this topic.

  9. Failed Alchemist says:

    Chugani is spot on. Although the pseudo-Che calls CY a commie but why the heck doesn’t the DAB and FTU love the guy. Distrust can be seen on their faces. Ms. Star seems to be a mole within. But the worst comes from the pan-democrats. Why didn’t they rack the Duck? Two terms, not a pip but they are willing to pillor CY from the onset.

    Then we have group after group of well-minded citizens, concern groups, stupid politicians who have miles after miles of shopping list as if CY looks like Santa.

    Politicians (including the pro-BJ) are becoming disconnect to the realities of what HK needs. Yes, from Newsline, it seems CY doesn’t want to pass the small committee gauntlet but rather take his cause to the people in 2017. So pan-democrats, it looks like he is ahead of you guys for the CE elections while you barter & bicker of 5 super seats, then lose the family treasure. What a laughing stock. Therefore, Michael is correct that they let things slip while talking about big issues like universal sufferage and letting the Duck get off too lightly.

  10. Real Tax Payer says:

    I must say I felt sorry for Chugani today – and it’s not the first time he has mentioned his recent exorbitant rent increase in his recent op-eds. Sounds like he ought to move flat PDQ

    I was lucky in that I bought HK property to live a couple of times at the bottom of troughs ( last time was immediately just after the shit hit the fan in 2008/9 otherwise – like Chugani – I also would be giving a large part of my income to a rapacious landlord )

    But I also once bought an investment apartment. That was in 2000 thinking prices couldn’t go any lower than they were then…. but they did … and I watched with horror as my equity went negative during the abyss of 2003 , meanwhile I had to keep topping up the mortgage payments because the rental value was so low. One sometimes forgets that landlords have to ride the waves up and down as well.

    But rents aside : what Chugani wrote about the pro-dems is absolutely true. I can’t remember a pro-dem ever coming up with a decent election platform other than bleating “give us free elections baa baa blaah”. Certainly they never attacked the Duck on his hopeless governance and so even if I had a free vote they wouldn’t get mine – pathetic wimps that they are. So I agree with Chugani that they are as much to blame for this present mess as the Duck and his ducklings are

    PS : @ Joe Blow – please don’t be rude about my girl friend. Yes she’s a stripper but she does not work in Wanchai

  11. Let's burn rubber baby says:

    Jeff, why didn’t you buy if you have been here for 18 years? Housing was cheap – HK$50,000 down plus second mortgage with the developer paying the interest. And it’s even more expensive in London where the taxes and cost of living are much higher.

  12. Maugrim says:

    Jeff, give it a bone mate, you have misjudged Hemlock by a wide margin. For homework, read his book, ‘we deserve better’.

  13. Pat says:

    It will take a major external shock to crash property prices. With the worst of the credit crises over, apparently, no regional wars imminent, apparently, then all should be well. But you never know. It’s always a punters market in HK. Once a few sheep move, the rest run.

  14. Real Tax Payer says:

    Is there really a book by Hemlock “We deserve better” ?

  15. farm chairs says:

    Jeff –

    All rent controls will do is ensure a greater number of flats remain empty, and drive a chunk of the rental market underground (“key money” anyone?) Remember this is a government that is incapable of enforcing illegally subdivided flats, or guesthouses, or no-smoking regulations; what makes you think landlords won’t find a dozen ways to circumvent rent controls?

    Anyone that thinks rent controls lead to a greater availability of affordable decent accommodation hasn’t tried to rent (or buy) a flat anywhere with rent controls (see: New York, for a start).

  16. Mary Hinge says:

    RTP, regarding: “I can’t remember a pro-dem ever coming up with a decent election platform other than bleating “give us free elections baa baa blaah”. ”

    LONG ANSWER (apologies). Not sure where you have been but, as an example, see Alan Leong’s CE election platform (vs. Donald), 2007. A couple of excerpts here (air pollution and poverty here only, these were two out of six policy planks; universal suffrage was only of of the six).

    Sorry for the poor copy/paste layout:

    POLLUTION: “Polluting emission sources must be attacked on all fronts for effective control.

    My government will:
    1. Focus on Vehicular Emissions
    • Achieve pollution reduction from all sources – trucks, buses, vans, cars etc. through replacing old vehicles and using cleanest fuels.
    • Use demand-side management – road pricing and road use restrictions.
    • Expand railway – take traffic off road.
    • Improve urban planning – reduce street canyon effect and expand pedestrian zones.
    • Stop idling engines – legislate expeditiously.
    2. Reduce Marine Emissions
    a. Require ships to reduce speed in harbour to burn less fuel – thereby emitting less pollution.
    b. Require ships to use clean fuel and emissions abatement technologies – use clean fuels for propulsion and auxiliary engines in harbour; and fit catalytic reactors, scrubbing, slide valves and fuel additives to reduce emissions.
    c. Develop long-term ‘green’ port policy – as is being done in other leading ports.

    POVERTY: “My government’s goals are to care for the vulnerable and disadvantaged, and to strengthen society’s foundation so that more people can better rely on themselves and lead rewarding lives.

    This will be done by:

    Helping families to deal with stress to prevent domestic violence.
    Improving education so youngsters can have strong job-skills and life-skills.
    Creating public sector jobs that also realises other social policies.
    Ensuring the socially disadvantaged and minorities are not discriminated against in education and work opportunities.
    Getting people to work through giving transport subsidies.
    Setting a minimum wage to give dignity to low-income work.
    Dropping the idea of a GST.
    Reviewing health and retirement planning to anticipate Hong Kong ‘s demographic change.
    Formulate a welfare development blueprint and review the subvention system to ensure fair working conditions for social welfare personnel to deliver quality services .
    Using the Commission on Poverty as a multi-stakeholder platform for research, deliberation, debate and engagement.

    The key problem is the substantial inequality in our society. Hong Kong has the most uneven distribution of income among the developed economies in the world. Wide and persistent disparities are universally recognised as undesirable socially, economically and politically because it eats at the foundation of achieving a harmonious society. The digital divide contributes to exclusion, and deserves attention . ”

    And so on … if you are interested (an open question), you can put “http://www.competitionforce.hk/air_eng.php” into the wayback machine to see the rest. And marvel at how much of CY is pilfering now.

  17. Bela The Builder says:

    Let them eat congee.

    I’m all right Jack.

    Why aren’t you rich?

    ” If they are so committed to living in this country, why don’t they have a house of their own” (Peter Rachman)

    ” You can always tell when men are old. They talk about property all the time rather than women.” (Eric Berne)

  18. Chimp says:

    And that’s exactly why we don’t want Alan Leong.

    Forex: “Polluting emission sources must be attacked on all fronts for effective control.”

    And he then goes on to avoid mentioning the major polluters. QED, he does not advocate effective action on pollution. Amazed he didn’t advocate plastic bag taxes as an air quality mitigation factor.

    Bloody lawyers, and even worse, politicians. We hates them, we does, my precious.

  19. Real Tax Payer says:

    @ Mary Hinge

    I grant you that Alan Leong did say some very sensible things when he was running for CE … note CE, not LEGCO ( but then also so did the duck “I’ll get the job done quack quack* ” )

    Also Alan Leong is a person I respect.

    But sadly he’s the exception that proves the rule. If only all the pro-dems would think the same way and then walk the talk .

    If only ………

    ( * Does than make him a quack ducktor ? Anyway that what he turned out to be )

  20. The Regulator says:

    The mud bank beside Lo Wu will be selected as the spot for building. It has transport and water and the land-owners will make a fortune: these being the criteria.

  21. smog says:


    Yes, surely you knew that. And an excellent read it is too:

    We Deserve Better by Hemlock

  22. Walter De Havilland says:

    What a bumper day for comments. Sorry, I arrived late. I’m doing some serious reflection this evening, because within the matter of several weeks I have found myself agreeing with LAU Nai-keung and Michael (chip on each shoulder) Chugani.

    Either they are forming their views having visited this site or we have convergence. A worrying prospect.

  23. Failed Alchemist says:

    Alan Leong – Imagination running wild. Tweed jacket, nice scarf, hair flowing (sorry, not so much hair) in an open Aston Villa convertable… James Bond? Roger Moore? Wakakakaka….

  24. Ignorant listener says:

    I appreciate the RTHK guy asking the interviewee to explain things they’re talking about. While I’m interested in the topics, I will get lost if they talk about “gini coefficient” without explanation.

  25. colonelkurtz says:

    I’ve met most of the pro-democracy politicians several times. Alan Leong’s an arrogant arsehole who condescends to everyone. Ronnie Tong too. Both typical examples of self-satisfied but mediocre HK barristers (this applies to both foreign and local barristers). Emily Leung is exactly like she is like on TV – a screeching one note harridan. It’s a pity the occasional good point she makes is undermined by her repellent delivery. From seeing her up close in Legco for several years, for a self-professed lawyer, Margaret Ng frequently revealed she knew nothing of the law and revelled in making small minded (and frequently wrong) gramatical corrections of everyone else. I can’t see any of them connecting with a real electorate if there was a real choice. Audrey Eu, Albert Ho and Sin Chung Kai were the only decent minded, modest ones. Long Hair is decent enough and smart but views everything through a narrow prism of street protest. I’ve never met Wong Yuk Man, but he seems a typical nasty “shock-jock” from the media coverage, both pro and anti-democracy.

  26. Andrew Wood says:

    I’m the RTHK Hong Kong Today business presenter, Andrew Wood.

    Thank you BigLychee, Joe Blow and Ignorant Listener for your comments.

    I’d love to hear more from you — or any listener — on what you think about the the business slots at 6:50am, 7:20am and 7:50am.

    Send me an email: wooda {-at-} rthk.hk

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