Hong Kong: A Unique Transition in Continuous Tense
Macro-trends of globalisation and quantum leaps in information technology have reshaped the entire world. One of the world’s most globalised cities, Hong Kong is no exception to the global forces of transition in the last two decades. The former British colony turned Chinese Special Administrative Region, nonetheless, has been experiencing a unique transition in human history. The freest ethnically Chinese market economy, long ruled by a western democracy, was returned to the most populous communist-authoritarian regime that is rising as a world power.
The unprecedented political transition put Hong Kong under the international limelight from the 1980s to 1 July 1997. Since the official change of sovereignty, the Chinese capitalist city has only occasionally caught the world’s attention. Yet, the real transition of Hong Kong actually began in 1997. Hong Kong has been promised a high degree of autonomy under “One Country, Two Systems.” Within its border, the legal systems, cultures and values are very different from the rest of China. The border, however, has become blurred figuratively in the last two decades.
Underneath the continuing transition is the unsettled community mood despite the city’s richness and success. Hong Kong’s average GDP per capita in 2016 was close to US$43,000, ranked 15th in the world, higher than economic leaders such as Germany and Japan. Hong Kong’s stock market is often compared to those of New York, London and Tokyo. The Special Administrative Region Government, probably envied by many governments, has not seen a budgetary deficit since 2004. Hong Kong people live the longest life on average (men: 81.32 years old and women: 87.34 years old), surpassing the Japanese average life expectancy since 2016. Yet, we are some of the unhappiest people. In Gallup’s regular polls on happiness of about 150 countries, Hong Kong has been consistently ranked in the lower half. The rise of suicide rates after 1997, in particular among young people, is alarming.1
Certain social and economic statistics help put the apparent incongruity into perspective.
Demographic changes have been drastic. Since 1997, the number of immigrants from the mainland has grown by about 1.5 million2, thanks to an immigration policy that the Hong Kong Government has no control over. In 2016, 20 percent of the city’s 7.3 million residents3 immigrated from the mainland after the political handover. Massive inflows of migrants happen in other parts of the world. Many societies are experiencing pressures on social resource allocation and cultural conflicts arising from an influx of foreign immigrants, similar to what is happening here. Yet, in Hong Kong recent immigrants from the Motherland, who are brought up in a very different cultural environment and political system, cannot be regarded as ‘‘foreigners’’. Policy adjustment to tackle the issue is almost impossible in political terms.
Shifts in economic power have been dramatic in the last two decades as well. As Chinese businesses, state-owned or otherwise, accumulate wealth rather rapidly, mainland capital has been flowing continuously into Hong Kong, the freest financial market in China. In 1999, of the 50 Hang Seng Index constituent stocks, 38 were from Hong Kong and 10 from the mainland.4 Today, there are more mainland companies (26) than Hong Kong ones (21) in the Hang Seng Index.5 Reallocation of economic power is significant.
Meanwhile, the gap between rich and poor in Hong Kong has become one of the widest in the world. With a Gini coefficient standing at (or sometimes close to) 0.54 for the last decade6, Hong Kong’s polarised wealth gap is worse than most other capitalistic economies such as the US (0.39), Japan (0.33) or Singapore (0.46).7 Hong Kong’s income inequality is even more serious than the mainland’s.8 A widening wealth gap reflects the impact of redistribution of wealth and implies a decline of economic well-being experienced by a large proportion of people.
Local people have been particularly hard hit by barely affordable housing, especially in the last ten years. The Hong Kong property price to income ratio rose from less than 20 in 2011 to 38.6 in mid-2017.9 The ratio is far higher than in other global cities such as New York (10.3), Tokyo (17.5) and Singapore (22.2).10 Rapid rises in property prices have deepened the division between the haves and have-nots. Those endowed with properties and assets (especially from early years) accumulate wealth almost effortlessly. Many income earners (even young professionals), however, cannot even afford a decent shelter after years of hard work and study.
The modern-day have-nots are not limited to those who did not have a chance of education due to wars, civil wars and other hardships in the past. Nowadays, many have-nots are highly educated. In 1998, only about 10 percent of those people aged 15 and above had received a university education. By 2016, the ratio of first degree graduates increased to 24 percent.11 The young to middle-aged generations are much more educated than in the past. A better educated population rightly has higher expectations about how our community should be run.
Discontent in Hong Kong has been running high. Dubbed as a “city of protest,”12 the number of demonstrations increased from dozens to hundreds every year. After 1997, Hong Kong was under the international spotlight in two particularly prominent cases of dissent. In 2003, tens and thousands of people expressed their anger over the potential passage of a national security law that was feared to curb freedoms. In 2014, the central business district was occupied by defiant protestors for 79 days in response to Beijing-led changes to Hong Kong’s electoral system.
During the political transition in the 1980s and 1990s, the worst fears of Hong Kong people included direct rule by the Communist regime, a roll-back of freedoms, confiscation of wealth and drastic change of lifestyles. None of these happened on 1 July 1997.
Twenty years have now passed. The Special Administrative Region continues to be prosperous. However, many local people have found themselves leading a harder life in a more crowded place and less happy. Speech freedoms are challenged by an invisible hand of self-censorship when almost all newspapers and electronic media are directly or indirectly related to the mainland capital. Political activists and pro-democracy legislators are purged. Direct intervention from Beijing and its representatives in the city’s governance is now obvious and pervasive. The Chinese Foreign Ministry declared the Sino-British Joint Declaration, that promised to preserve Hong Kong’s system and freedoms for 50 years, a “historical document that no longer has any realistic meaning.”13 Hong Kong, once the freest port, has denied entry to a number of foreign peaceful critics of the Chinese Government.
The Hong Kong transition is continuing. The broad direction is clear – toward integration with the mainland politically, economically and socially. However, the endpoint in this transition is still fluid since many Hong Kong people are not resigning to their ‘‘fate’’. There are tensions between the ‘‘two systems’’, between the forces for integration and the struggle for autonomy, between sharing national pride and upholding universal values. Will Hong Kong become just another Chinese city? Or will we be able to preserve the city’s unique qualities? The search for a new identity will be long and difficult.
1 RTHK, “Student suicide rate remains ‘alarmingly high’ ”, May 25, 2017, http://news.rthk.hk/rthk/en/component/k2/1332415-20170525.htm.; The Hong Kong Jockey Club Centre for Suicide Research and Prevention, “Suicide rates in Hong Kong”, The University of Hong Kong, https://csrp.hku.hk/wp-content/uploads/2017/09/2017WSPD_slide.pdf.pdf.
2 Mark O’Neill, “1.5 million mainland migrants change Hong Kong,” EJ Insight, June 19, 2017.
4 Hong Kong Exchange Limited (1999). HKEx Fact Book 1999. Hong Kong. http://www.hkex.com.hk/market-data/statistics/consolidated-reports/hkex-fact-book?sc_lang=en.
5 Hong Seng Index. https://www.hsi.com.hk/HSI-Net/.
6 Social Indicators of Hong Kong. https://www.socialindicators.org.hk/en/indicators/economy/11.6.
7 OECD Income Distribution Database. http://www.oecd.org/social/income-distribution-database.htm.
8 Gabriel Wildau and Tom Mitchell, “China income inequality among world’s worst”, Financial Times, January 14, 2016, https://www.ft.com/content/3c521faa-baa6-11e5-a7cc-280dfe875e28.
9 Numbeo Property Price Index. https://www.numbeo.com/property-investment/rankings_by_country.jsp.
11 Education Bureau, “Distribution of Educational Attainment of Population Aged 15 and Over”, http://www.edb.gov.hk/en/about-edb/publications-stat/figures/educational-attainment.html.
12 Anthony Dapiran, City of Protest: A Recent History of Dissent in Hong Kong (Hong Kong: Penguin, 2017).
13 Joyce Ng, “Sino-British Joint Declaration on Hong Kong ‘no longer has any realistic meaning’, Chinese Foreign Ministry says.” South China Morning Post, 1 July 2017, http://www.scmp.com/news/hong-kong/politics/article/2100779/sino-british-joint-declaration-hong-kong-no-longer-has-any.
Dr Rikkie Yeung
Project Manager of the Centre for Civil Society and Governance, The University of Hong Kong, and a public policy consultant. She also teaches in the Master of Public Administration Programme and leads in other research projects in the Faculty of Social Sciences of the same University. Dr. Yeung previously worked in the Hong Kong Government, the banking sector, and non-governmental organisations.