Out of duty and habit, Hong Kong’s chattering classes pick over the 2014 Policy Address. Some people calling themselves the middle class apparently burst into tears like big cry-babies because they don’t get mentioned, let alone any handouts.
More seriously, there’s the HK$3 billion subsidy for the working poor. On the one hand it’s just a Band-Aid; on the other hand it’s more than anything CY Leung’s predecessors could be bothered to do. You could say this for lots of these measures; intensive language teaching for ‘ethnic minorities’, for example, and broader transport subsidies for the disadvantaged, and above-inflation hikes in kindergarten and elderly healthcare vouchers. After Donald Tsang’s policy of ‘Screw everyone except civil servants and my tycoon buddies’, this is at least visibly different.
Two interesting points come from the South China Morning Post. First, CY omitted any mention of labour importation. The policy address is more about PR than full disclosure, so it could be that officials are just hiding plans to ship a million Bangladeshi half-slaves into town. But the way CY’s other policies at least slightly deviate from the previous administration’s pro-plutocrat approach suggests that the old-guard establishment ‘business community’ are right to hate him.
Is low pay a drag on overall prosperity or a stimulus to economic growth? Sir Bow-Tie and his cohorts were in no doubt as to the answer. The tycoons artificially suppress competition among themselves, but they certainly want to stimulate it among people looking for employment. CY may take a different (and economically/intellectually/morally consistent) view: scarcity of cheap labour should equal higher wages for the lower-paid, which equals a narrowing of the gap between rich and poor.
Second, in embarking on a ‘home-building binge’, CY could go down in history as the first man to cause not one but two massive property market crashes in Hong Kong. The tortuously long time-lag between finding sites on which to plan housing and handing over keys to occupiers could render all this meaningless. It could be that the higher plot ratios, let alone the mysterious ‘East Lantau Metropolis’, won’t happen. Interest rates, a Mainland downturn, a shift in migration patterns, invasion from outer space – anything could happen to bring property prices down in the intervening years. As CY, of all people, knows full well.
(As an aside, a quick trivia quiz: Where in Hong Kong can you buy a 600-sq-ft apartment for less than HK$1,000 (yes, a thousand bucks) per square foot and a 1,200-sq-ft flat for around HK$2-2.5 million? In other words, for something roughly like 10% to 30% of what you would pay nearly anywhere else in town? Not a trick question. Answer below.)
The Policy Address remains, as ever, a work by and for sufferers of bathophobia (a fear, as we all of course know, of things deep). We are left with no clue as to where Hong Kong is headed, or who or what the city is actually for. If you put a mammal into a cage that is too small, it goes mad and ends up repeating the same inane behavior endlessly. Our policymakers are like that: cram more tourists in; act surprised when a lack of space reduces most people’s economic opportunities; attempt to rectify by cramming even more tourists in; repeat over and over.
Luckily, as perhaps with housing, the economic cycle or outbreaks of disease and riots will stop this cycle at some point (the artificial arbitrage gap between Mainland and Hong Kong retail markets will sort itself out one day, say when China cuts import taxes). Meanwhile, CY announces a visionary new Megalopolis on reclaimed land off East Lantau. Certain landed/tourism interests are pushing this for obvious reasons, with support from bureaucrats trying to find someone to use the white-elephant bridge to Zhuhai when it opens. To start the reclamation, the South China Morning Post dredges up an unnamed ‘real estate advisor’, whatever that is, who opines that the project ‘could house outlet malls’. Sure – it could house 100-ft statues of Chairman Mao carved out of dried dingo droppings if you want. It all sounds a bit not-going-to-happen-and-he-knows-it.
Answer to exciting trivia quiz: ideal for commuters who like a challenge, or for extreme recluses and people wanted by the police – and there are (predictably) some costs in terms of management fees and inconveniences in terms of shopping – but here’s perhaps the cheapest private housing in Hong Kong. Even the parking-space speculators haven’t been temped.