Post-hibernation catch-up

After a good 10 days’ retreat from seasonable boisterous throngs – grinning givers of glad tidings, mindless bearers of gifts, unconvincingly cheerful midnight revelers and massed photographers of fireworks – it is safe to come out: 2014 is here. And some interesting things have been going on.

The Hong Kong government gives up trying to squeeze a hefty land premium out of property developers for a particular site and asks them to propose their own. The newspapers’ angle is that this shows Chief Executive CY Leung’s housing targets are under threat. This may be so, but it’s not the real story. The real issue is this absurdity: the government says it wants to increase the supply of affordable homes but at the same time insists on maximizing its revenues from this up-front land development tax.

Let’s strip out several factors from the equation, like the global liquidity-driven asset-price bubble, construction costs distorted by white-elephant infrastructure projects and the local property cartel’s profit margins. What you are left with is ‘the unaffordable price of housing equals the high level of land premium’. If the government wants affordable housing, all it has to do is tax housing less (or differently), which it can easily do given its bulging budget surpluses and fiscal reserves.

Obviously, there are all sorts of vested interests and insurmountable ‘lack of consensus’ barriers to correcting this extreme illogicality (though nothing a few firing squads couldn’t fix), but on paper it’s that simple. Do you want a) affordable homes or b) ever-growing government reserves? (tick one only).

If developers are invited to offer land premiums, there is a theoretical possibility that they will collude behind the scenes to jointly bid low, in effect, and share the spoils in due course. Of course, in practice, the highly respected half-dozen families who control real estate would never do such a thing, would they?

Which brings us rather neatly to tycoon Li Ka-shing’s Cheung Kong Infrastructure, which, to the horror of thin-skinned Brits, makes mouth-wateringly high profits while paying very low tax rates in the power-cut-stricken UK. Hongkongers are also shocked, as they witness the South China Morning Post digging around the publicly available data and reporting that CKI enjoys an enviable degree of tax efficiency right here in the Big Lychee (and in Australia, while we’re at it).

There have been times when such forthright non-glowing coverage of the Li empire would, quite possibly, not appear in the first place. The conglomerates concerned comprise a big source of media ad revenues, and their proprietor is the tycoon to whom lesser magnates, whether or not they run shoe-shining newspapers, all defer. Maybe this article just slipped through the editorial net during the holidays (keep an eye out in case reporter Toh Han Shih falls from a window). In which case, expect some highly flattering stories about Cheung Kong and Hutchison before long. But maybe this is another of those tantalizing signs of the fading of an old order that has outlived its usefulness to our ultimate masters.

Beijing’s frustration with Hong Kong’s tycoons is presumably behind the recent suggestion that Mainland officials now blame disunity in the pro-establishment camp – not the pro-democrats – for the Big Lychee’s problematic/farcical governance. It is a telling example of Chinese leaders’ warped perceptions of the world beyond Zhongnanhai. Hong Kong’s problems will be solved if particular groups of shoe-shiners with grudges shut up and get on board with the local administration. As if the same Beijing-appointed administration’s crap policies (housing plus your top 10 other favourites) have nothing to do with it. All you have to do is appoint a government that puts the overall public interest first: it will win broad community support, and you won’t have to scrabble around trying to assemble a motley United Front of grasping billionaires and grubby Communist stalwarts. But of course that would be putting the led in charge of the leaders.

Which brings us to the pro-democrats’ annual January 1 march (not to be confused with their annual July 1, June 4, October 1 or other events), which was or wasn’t a test-run for Occupy Central. And which does or does not presage a long, hot 2014 as Hong Kong tries to introduce a version of universal suffrage that fits tidily into a paranoid one-party Communist state. The Standard takes the pro-dems’ mock-referendum on political reform surprisingly seriously, while its usually strident ‘Mary Ma’ editorial sounds half-sympathetic about the relatively low turnout at the demo, and even breaks with the United Front line that Occupy Central will mean the end of civilization. As with the SCMP’s coverage of KS Li, maybe it’s the hangovers, or maybe Beijing’s locally based spin-doctors have made some interesting New Year’s resolutions.

Typo of the Day suggests hangovers…

This entry was posted in Blog. Bookmark the permalink.

10 Responses to Post-hibernation catch-up

  1. PropertyDeveloper says:

    Welcome back!

    So they can’t even reach a 20,000 unit target without bending the rules and scraping the barrel? Bring back CW Tung and 85,000 a year!

  2. maugrim says:

    I think our bright eyed and bushy tailed pro-dems forget the maxim that sometimes. ‘less is more’.

  3. Sid says:

    Yes, but often more is less.

  4. Gin Soaked Boy says:

    After the build up to the march, including wheeling Anson CHAN out to encourage the masses, I’d anticipated a huge turnout. It was a glorious day, sunny and bright, yet the people of Hong Kong opted to stay away in their thousands. The HKU team counting the turnout estimated 13,000 people, just under half of what the organizer claimed. A bit of protest fatigue creeping in or was there something good on the TV?

  5. Pornstar Wong says:

    I’m surprised you didn’t touch on the PLA barracks break-in — ultimate proof of “Hong Kong con cajones”. The SCMP picture was very good. An ultra-puny guy with a colonial flag, a fat man in a red turtleneck sweater plus a group of confused PLA soldiers in battledress. It just sums up the difficulties facing Beijing and CY. Short of adopting North Korean policies (where the perpetrators could be labelled “factionalist filth” and executed), Hong Kong just can’t legislate against this kind of thing. Beijing humiliated annoyed and, with the perps being from a small group (Hongkongers come First), deniability from the pan-dems. It managed to pile more pressure on CY even though the Jan 1 turnout was poor. They also had the nerve to say this:
    “Four brave warriors have been arrested … other members were on their way to rescue them from the police”. It also promised unspecified “revenge”.

  6. reductio says:

    I have it on good authority that the Hongkongers Come First group has plans to insert operatives into the MTR at strategic points (TST, Admirality I would guess) and steal the little wheels from mainland tourist suitcases, thus rendering both cases and tourists inoperative. This will be followed up by a massive psy-ops campaign with rumours that face-whitening products actually turn you brown. Onwards brave warriors!

  7. Pornstar Wong says:

    To be honest, actions by Hongkongers Come First almost qualify as performance art. I suppose that would be a good, if slightly implausible, defence.

  8. Pornstar Wong says:

    Actually, I think it’s a crew neck sweater – not a turtleneck.

  9. PCC says:

    Welcome back, Alvin Siddow.

  10. Pornstar Wong says:

    These guys have made the Global Times. LOL. Could this be the beat of a butterly’s wing that sets off the thunder storm?

Comments are closed.