Letter published in the Financial Times
A Recipe for Intergenerational Strife
Your editorial, ‘a Hong Kong crackdown would be a tragic error’ (August 15) reaches the right conclusion but it does not propose viable means to achieve it.
In the UK, the ratio between median cost of accommodation and median annual income is 4.8. Over the past fifteen years, this unaffordability has led to 1m more young people living at home with their parents, with a significant loss of personal independence. In Hong Kong, the ratio is a staggering 20.9, an outlier that is far above any other modern economy. The Gini coefficient in Hong Kong, a measure of wealth inequality, is similarly the highest in the developed world. The impossible price of property has arisen through a policy started by the Bristish of allocating, piece by piece, tiny parcels of land to a small, overwhelmingly powerful group of property tycoons. The result is ‘regulatory capture’ and a crazy structure of expensive, fantastically cramped apartments; a recipe for intergenerational strife.
I have just cycled hundreds of miles through rural Shaanxi in cenral China. Every 20 miles, there is a county town. In the outskirts, distinctive apartment blocks are being built to rehouse remote rural communities as part of the campaign to eliminate poverty and address economic imbalances in society.
The Hong Kong protestors rightly want a say in the way society is run. Conciliation must address the root causes rather than just the symptoms and bridge the gulf between the two sides. Meanwhile, Beijing has shown every sign that it wants the problems to be solved by the Hong Kong people themselves.
Hong Kong has almost US$2 trillion in public reserves, an astronomical sum for a territory with 7m people. If, through some consultative process, the government mobilised part of these vast resources to provide more affordable housing and better public goods, it would merely be choosing a path that China has already taken. That way, the people of Hong Kong might avoid a catastrophe, maintain their independence and start to heal divisions by focusing on a more equal future.
16 August, 2019
As we all know, the ‘consultative process’ did not happen, but on 15 March, 2021, the Wall Street Journal reported that top level officials in Hong Kong were undertaking a root and branch review of housing policy in response to Beijing demands that they address the wealth gap.