Behind Hong Kong's chaos lie deep-seated social problems

Xinhua
"To come out of the current economic difficulty, Hong Kong needs to be linked with the Chinese mainland much closer and more effectively."
Xinhua
Behind Hong Kong's chaos lie deep-seated social problems
Xinhua

Chief Executive of China's Hong Kong Special Administrative Region Carrie Lam speaks during a media session in Hong Kong, south China on September 5, 2019.

Kwong loves the pure adrenaline rush he gets when he takes his motorcycle out on the weekends to light up his lackluster life.

The 35-year-old lives with his parents in an old and cramped apartment in the New Territories of Hong Kong. He has a girlfriend but is hesitant to get married and start a family.

"The rent is so high, and there is no way I can afford an apartment," said Kwong, who earns 15,000 HK dollars (US$1,950) a month. Renting a 30-square meter one-bedroom apartment would cost him about two-thirds of his salary.

"Future? I don't think much about it, just passing each day as it is," he said.

Kwong's words reflect the grievances among many people in Hong Kong, particularly the young. Many vented their discontent in prolonged streets protests that have rocked Hong Kong since June.

The demonstrations, which started over two planned amendments to Hong Kong's ordinances concerning fugitive offenders, widened and turned violent over the past months.

"After more than two months of social unrest, it is obvious to many that discontentment extends far beyond the bill," said Carrie Lam, chief executive of the Hong Kong Special Administrative Region, referring to the now-withdrawn amendments.

To Lam, the discontent covers political, economic and social issues, including the often-mentioned problems relating to housing and land supply, income distribution, social justice and mobility and opportunities, for the public to be fully engaged in the HKSAR government's decision-making.

"We can discuss all these issues in our new dialogue platform," she said.

Unaffordable houses

For nine straight years, housing in Hong Kong has been ranked as the least affordable in the world. Homes in the city got further out of reach for most residents, according to Demographia, an urban planning policy consultancy. The city's median property price climbed to 7.16 million HK dollars in 2019, or 20.9 times the median household income in 2018, up from 19.4 times from a year earlier.

In the latest case of house transaction, an apartment of 353 square feet (about 33 square meters) at Mong Kok in central Kowloon was sold at 5.2 million HK dollars in September, according to the registered data from Centaline Property Agency Limited.

For those fortunate enough to have bought an apartment, many have to spend a large part of their monthly income on a mortgage. For those who have not bought any property yet, it is common to spend more than 10,000 HK dollars in rent, while saving every penny up for a multi-million HK dollar down payment.

From 2004 to 2018, the property price increased by 4.4 fold, while income stagnated, statistics show. From 2008 to 2017, average real wage growth in Hong Kong was merely 0.1 percent, according to a global wage report by the International Labor Organization. Homeownership dropped from 53 percent to 48.9 percent from 2003 to 2018.

Behind Hong Kong's chaos lie deep-seated social problems
Xinhua

HKSAR Chief Executive Carrie Lam visits a transitional housing project of the Lok Sin Tong Benevolent Society Kowloon in Hong Kong, south China on August 9, 2019.

Efforts of the HKSAR government to increase land supply to stem home prices from soaring also went futile amid endless quarrels. Of Hong Kong's total 1,100 square kilometers of land area, only 24.3 percent has been developed, with land for residential use accounting for a mere 6.9 percent, according to data from the HKSAR government.

Social worker Jack Wong, 29, lives in an apartment bought by his parents. "I'm lucky. Most of my friends still have to share apartments with their parents. My cousin has been married for seven years, but he is still saving for his down payment, so he has to live at his parents' house," he said.

"The older generation changed from having nothing to having something. We, the younger generation, thought we had something, but it turns out we have nothing," he said.

Middle class' anxiety

While young people complain about having few opportunities for upward mobility, Hong Kong's middle class, which should have long been stalwarts of the society, are under great economic pressure and in fear of falling behind.

It is not easy to be middle class in Hong Kong, one of the world's most expensive cities. To join the rank, a household needs to earn at least 55,000 HK dollars, or 7,000 U.S. dollars, a month, according to Paul Yip Siu-fai, a senior lecturer at the University of Hong Kong. About 10 percent of the households in the city are up to the rank.

Earning that much can be counted as rich in many parts of the world. But in Hong Kong, the money is still tight if you have a child to raise and elderly to support.

Housing is the biggest burden for the average middle-class resident. The cost of having a child is another headache in Hong Kong, where pricey extra-curricular activities and private tutoring are considered necessary to win in the fierce competition.

Fears of descending to the low-income group are real for the middle class. Many think they belong to the middle class only in education and cultural identity, but their living conditions are not much better than the impoverished, said Anthony Cheung Bing-leung, former secretary for transport and housing of the HKSAR government.

Behind Hong Kong's chaos lie deep-seated social problems
Xinhua

A light show is on at Victoria Harbour in Hong Kong, south China on December 1, 2017.

Civil servants and teachers, who earn much more than the average income, are traditionally considered middle class. But Cheung found out in a survey that many of them could not afford to have their own apartment, with some even living in the narrow rooms of partitioned apartments.

"We don't belong to the low-income group, but we could just rent an apartment now," said Lee, a teacher at a secondary school in Hong Kong.

Lee and her husband earned nearly 1.3 million HK dollars a year, but a 50-square meter apartment is the best they could rent now for a five-member family. She preferred not to give her full name as she feels her situation is embarrassing.

"We want to save more money to buy a house near prestigious elementary schools for our kids," Lee said. "If our kids can't go to a good school, it'll be very tough in the future."

Changing economic structure

In the 1970s, nearly half of Hong Kong's labor force were industrial workers when manufacturing thrived in Hong Kong. During the 1980s, Hong Kong's finance, shipping, trade and logistics and service industries started to boom.

Since then, the economic landscape began to change amid subsequent industrial upgrading.

Behind Hong Kong's chaos lie deep-seated social problems
Xinhua

A woman walks near the Harbour City in Hong Kong, south China on August 27, 2019. 

Due to the hollowing out of the manufacturing industry, the wealth gap in Hong Kong widened and the class division worsened. Despite the prosperity of finance, trade and tourism in recent years, more than 1.37 million people are living below the poverty line in Hong Kong, home to more than 7 million.

Working career options are now limited, leaving little hope for the youngsters to move up the social ranks.

As a result, Hong Kong's social class has largely been solidified in the 21st century, with the richest people dominated by property developers and their families.

The Gini coefficient, which measures the inequality of income distribution, reached a new high of 0.539 in 2016, far above the warning level of 0.4, according to data by the HKSAR government's Census and Statistics Department. The greater the number toward one, the more inequal in income distribution.

Though the HKSAR government tried to narrow the wealth gap, many people in Hong Kong said they are not sharing the fruits of economic prosperity, the young and those low-income groups in particular.

Stagnating political barriers

What makes the deep-seated problems in Hong Kong such a hard nut to crack? The reason is complicated, according to observers, partly due to the containment in the current political structure that leads to governance difficulty, partly due to a doctrinaire implementation of the principle of "small government, big market," or laisser faire, and most importantly due to the opposition's "say no for none's sake" that stirs political confrontation and sends Hong Kong into a dilemma of discussions without decisions, or making decisions without execution.

Over the past 22 years, the successive HKSAR governments have tried many times to tackle these problems by rolling out affordable housing programs and narrowing the rich-poor gap.

For example, to make houses more affordable, Tung Chee-hwa, the first HKSAR chief executive, proposed in 1997 to build at least 85,000 flats every year in the public and private sectors, raise the homeownership rate to 70 percent in 10 years and reduce the average waiting time for public rental housing to three years.

Such plans, however, went aborted as home prices plunged in Hong Kong amid the Asian financial crisis in 1998.

"Since Hong Kong's return, many economic and livelihood issues would not be as politicized as they are now, should the HKSAR government have introduced more policies and better social security arrangements to address those problems," said Tian Feilong, a law expert of the "one country, two systems" center with the Beijing-based Beihang University.

To carry out major policies or push forward major bills, the HKSAR government needs to garner the support of two-thirds majority at the Legislative Council (LegCo).

The HKSAR government's previous motions, be it economic policies or fiscal appropriations, were impeded by the opposition time and again at the LegCo, regardless of the interests of the majority of Hong Kong residents and the long-term development of the society.

The HKSAR government sought in 2012 to establish the Innovation and Technology Bureau to ride the global wave of innovative startups, diversify its economic structure and bring more opportunities for young people. Such efforts, however, were obstructed by the opposition at the LegCo in defiance of repeated calls by the public. After three years, the proposal to create the bureau was finally passed by the LegCo.

Behind Hong Kong's chaos lie deep-seated social problems
Xinhua

Vehicles run on the Hong Kong-Zhuhai-Macao Bridge on October 24, 2018. 

In another case, a Hong Kong resident, incited by the opposition, appealed in 2010 for a judicial review of the construction plan of the Hong Kong-Zhuhai-Macao Bridge. Though the HKSAR government won the lawsuit after more than a year of court proceedings, 6.5 billion HK dollars of taxpayers' money had been wasted in the increased construction costs of the bridge's Hong Kong section due to the delay.

As time passed, problems remained unsolved, so did public discontent.

Repeated political bickering stalled Hong Kong's social progress amid the sparring, and the opposition created a false target and blamed the Chinese mainland for those deep-seated problems.

Lau Pui-King, an economist in Hong Kong, snubbed the opposition's resistance of or even antagonism to the Chinese mainland, saying such thinking of secluding Hong Kong from the entire country could end nowhere but push the city down an abyss.

"Seclusion brings no development opportunity for Hong Kong," Lau said. "Some youngsters don't understand that Hong Kong would be even worse if it is secluded from the Chinese mainland."

"To come out of the current economic difficulty, Hong Kong needs to be linked with the Chinese mainland much closer and more effectively," she said.

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