24 February, 2011

Hong Kong: a city without character

If our business elites continue to pin their hopes on Beijing's subsidizing policies, Hong Kong stands no chance in this competition in the long run.
(Originally published on EJ Insight on Feb 21, 2011

Hong Kong: A city without character
By L K Shiu

If someone were to write a book on the “Rise and Fall of Hong Kong” in the near future, the call for national planning would no doubt constitute an important chapter.

When the Basic Law was promulgated in 1990, China was all too eager to reassure the Hong Kong population that “socialist system and policies shall not be practiced in the Hong Kong Special Administrative Region” (Article 5). In fact, the whole mini-constitution is to uphold a high degree of autonomy of the SAR, economic autonomy being the key. State planning of the economy is a core and distinct feature of socialist ideology and has been long feared. This city prides itself on its laissez-faire tradition and every year when the U.S. Heritage Foundation, or its likes, publishes its annual index on economic freedom, the government feels compelled to take close heed.

But now we see concerns or even anxiety in Hong Kong, not over the loss of autonomy, but rather being left out of the state economic planning exercise. There could not have been more abrupt changes in men’s worldview in 20 years. More interesting is the fact that such anxiety is perhaps all the more felt by elites in the business sector – the purported arch-enemy of socialism.

For sure, signs of change were noticeable long ago. In 2006, the Chief Executive, setting out the future economic direction in his Policy Address, happily made reference to the National 11th Five-Year Plan which states that “support will be given to Hong Kong’s development on such fronts as financial services, logistics, tourism and information services, and the maintenance of Hong Kong’s status as an international center of financial services, trade and shipping.” By and large, Donald Tsang's major initiatives since then had been in line with the tone laid down in the Eleventh Five-Year Plan.

Tsang’s actions echoed the local elites' anxiety about being marginalized in the competition against Shanghai. This is understandable but the call for Hong Kong to be gradually subsumed under China’s national five-year plan is misplaced for several reasons. I shall mention only two here.

First, state planning in any country is a matter of power play. Bureaus and departments, provinces and cities, and cliques or parties behind them, vie for resources and favors in state planning. Has the Hong Kong SAR any advantage in this? No. The city has no connection to the intricate power web of the mainland and its elites have little intimate operating knowledge of its politics. Whereas the former Chief Executive is one of the vice-chairpersons in the Chinese People’s Political Consultative Conference, the role is understood to be ceremonial. Hong Kong does not (and will not) have its own political spokesman in the Politburo, as Shanghai or Beijing does. Its political influence is not even comparable to a mid-sized city of China.

Second, any state planning involves the redistribution of resources and assigning rights and responsibilities for national development, in particular in a highly centralized country like China. In the past, many provinces or cities had foregone part of their economic benefits to meet other policy goals such as maintaining social stability or a clean environment. In contrast, the calls by Hong Kong elites over the years have given rise to an impression that they are merely seeking more and more concessions from the Central People’s Government. There is no free lunch and the brawl between Hong Kong tour guides and mainland tourists, widely reported and sensationalized in state media, is an alarm to this city that its incessant demands are inviting contempt. Its long-maintained role-model image is shattering. The jealousy of other mainland cities will one day come to this question: why do we have to give preferential treatment to this rich cousin who’s not paying any national taxes or shouldering any national responsibilities?

If our business elites continue to pin their hopes on Beijing's subsidizing policies, Hong Kong stands no chance in this competition in the long run. If we do not believe that a subsidized industry can thrive on its own, little shall convince us that a subsidized city can stand on its own feet. I am less concerned, therefore, that Hong Kong will lose out because of the competition from Shanghai, but rather that it chooses to compete on a disadvantaged battleground. We risk not only losing our role-model status but the very character that defines this unique city of China.

04 February, 2011

Hong Kong's Housing Policy (by Mrs. Rachel Cartland)

(Note: This is a piece written by Rachel Cartland, retired civil servant and formerly Assistant Director at the Social Welfare Department of HKSAR. I think her views are rare amongst the establishment and hence, valuable. Particularly noteworthy is the observation on the difficulties faced by young people.)

Hong Kong has much to be proud of in its housing policy. The massive building of public housing which began in the 1950s and accelerated during the MacLehose governorship of the 1970s transformed Hong Kong from a city of squatters living in squalid and dangerous conditions to one in which, even if it requires a wait of some years, all those who need public housing can be allocated accommodation that puts a roof over their heads in a flat that is decently maintained and at an affordable rent. The history that began with a hurried attempt to resettle those displaced after a massive fire in a squatter has culminated in the Hong Kong public housing sector being one of the world’s largest with about 30% of the population living in public housing.

However, nothing is worth leaving unexamined. “If it ain’t broke, don’t fix it” is a good motto but that doesn’t mean that there shouldn’t be a check up from time to time. And a check up of the Hong Kong housing situation will certainly reveal areas that need attention. The sprawling housing estates built in the New Towns were part and parcel of a planning philosophy that envisaged fully self-contained developments that would include not just all the necessary civic facilities but also factories to provide conveniently located employment for the residents. Hong Kong has subsequently transformed into an economy where employment opportunities are in the service industries and consequently in the Central Business District, to which transport costs can be prohibitive for those on low wages. An indirect incentive is thus created to remain as an unemployed person receiving social security (CSSA) since the payments under the Scheme will normally be sufficient to cover public housing rental in an outlying district. Furthermore, the provision of welfare facilities within the estates has been undermined by the effects of the Link REIT and its commercial approach to the common areas in the estates so that there is less space available for other uses. It would seem that a very thorough review is overdue to consider where and why rental public housing is provided and whether there might not be better ways of offering housing support, including perhaps cash benefits allowing citizens who are poor enough to otherwise be homeless to rent in the private sector.

The inadequacies of private sector housing present another set of problems and these are worsening as the low standards of construction in areas like Tai Kok Tsui, To Kwa Wan and Kwun Tong become more and more apparent as buildings age, presenting a very real danger to their inhabitants because of the risk of collapse. The flats in such buildings are small but even smaller are those in the infamous “cage homes”, where the elderly and young families are living in conditions that cannot possibly be considered acceptable. I thought that almost ten years in the Social Welfare Department had given me quite a good knowledge of Hong Kong’s welfare issues but I was shocked to realise how many elderly are still marooned in bad quality accommodation in ever gentrifying Wanchai where the lack of lifts present a particular challenge to the old and frail. Living in a “cage apartment” is not cheap either when the rent is worked out on a per square foot basis and may, ironically enough, constitute, some of the more expensive accommodation in Hong Kong. Scattered through old urban areas like Wanchai, Central, Western, Sham Shui Po and Yaumati, these homes are a hidden blight upon our concept of ours as a modern community with a reasonable minimum standard of provision for all. I have recently read about a fascinating new charity called “Giving Bread” which does just that, simply distributing bread to the needy in Hong Kong, including in cage homes. I can see a special value in this because through the volunteers involved in the distribution the realities of cage home living become less likely to be overlooked and forgotten. It will only be thus that enough resolve is generated to tackle the situation, which might require some really innovative thinking. The “attraction“ of these cage homes may include closeness to places of work or, for the elderly, the possibility of staying in a familiar environment and so the solutions might include building some special small scale public housing within existing old urban areas.

Apart from the really poor, there are very many citizens who now find putting a roof over their heads a tremendous psychological burden. Well educated young people aspiring to a middle class lifestyle now calculate that they will find it almost impossible to buy a home of their own. Does this matter enough to justify Government intervention? I am a genuine believer in the benefits of small Government as I believe that human beings are happier if they have freedom to live their lives as they wish, including freedom to decide how to spend the money that they have earned by their own efforts. It seems, however, that the present property prices restrict freedom in a harsh way. Young people who would like to follow some idiosyncratic career path that would make good use of their particular talents and make an excitingly original contribution to society feel instead an overwhelming pressure to do something more conventional and better paid so that they can meet the expectation that they will be able to do the Hong Kong basic thing of “buying a flat”. From time to time, concern is expressed that our younger generation is insufficiently enterprising and entrepreneurial. Oddly enough, planned availability of a stock of modest homes for purchase might prove an indirect solution to this.

This short piece has raised many questions and suggested only tentative answers. I hope though that it has sufficiently made the case that Hong Kong’s housing policy is full of questions which should be urgently and thoroughly looked at in order to achieve improvements needed in the light of changing circumstances.