In this series I’ve been recounting something of my travels and observations when I visited Hong Kong back at the end of October. This post is a bit different. Just for completeness I set out here a quick history of Hong Kong, since I’d read around the subject before my trip.
Early days of Hong Kong
- Started as humble trading port; the pirates on the seas and the mountainous and infertile inland didn’t bode well for the future
- 1700s – British merchants arrive and sell cheap opium from India, and then start jacking up the prices
- Mid 1800s – Hong Kong Island is ceded to Britain following the First Opium War (1839-42), Southern Kowloon is ceded after the Second Opium War (1856-60), and a few years later the New Territories and islands follow by being leased to Britain for 99 years (until 1997), so the whole of Hong Kong is effectively a British colony (or “crown colony”)
- 1937 Sino-Japanese War – many Chinese flee to Hong Kong
- WW2 – Hong Kong is occupied by Japan, and many inhabitants escape to China
Post war development
- 1947-49 – the Chinese civil war prompts a flood of migrants to enter Hong Kong
- Hong Kong develops textiles thanks to the cheap labour of these immigrants
- 1966-76 – after seizing power in the civil war and setting up the People’s Republic of China (“PRC”) in 1949, Mao has been consolidating power and reshaping the Chinese economy. He now embarks on the dystopian “Cultural Revolution”
- 1960s – terrible working conditions in Hong Kong lead to rioting
- end of 60s – sees an improvement in working conditions with public housing and public works projects
- 1973/74 – the Hong Kong stock market (the Hang Seng) crashes after a speculative boom (and the oil crash), but recovers soon after
- 1989 – Tiananmen Square
A model state?
Hong Kong was a beacon of success to capitalists everywhere. A free market economy with an elected government, low taxation and a financial hub for Asia. With no sales tax and a duty-free port, luxury goods were very cheap too. Tourists would come and spend half their budgets on shopping. It had become a materialistic state with a lot of money sloshing around – hence the flash cars and beautiful residential neighbourhoods on the south side of Hong Kong Island. Public health was also excellent, with the territory boasting the longest life expectancy in the world. But Hong Kong was no panacea.
The dark side
I signed up to a most fascinating guided tour with the title “Hong Kong: The Dark Side of the City Walking Tour”. The blurb ran: “Uncover the dark truth behind the glittering facade of Hong Kong on this Kowloon tour. Join this unique experience that brings you face-to-face with the concealed stories of this vibrant metropolis. The Stark Contrast of Urban Life: Tour a 10-Square-Meter Home Housing a Family. Witness a city that thrives on capitalism & every square inch is precious. See the Realities in a District Struggling with Poverty, Vice, & Gentrification…”. Our guide Michael was excellent, and I’d thoroughly recommend it if you get the chance. Here’s a fuller description:
What is the root cause of this housing crisis when undeveloped land in Hong Kong is still plentiful? The point is that with such low taxes, the government needs to look elsewhere for its source of revenue. It ended up relying on the proceeds from leasing all the land it owned. It was therefore in its interest to keep land prices high and to restrict new developments.
Now in the West, the house price-to-income ratio is around 10 (so 10 years of gross income would buy a house), but in Hong Kong it’s more like 25! This means that on a minimum wage it’s simply impossible to buy or even rent even the smallest private flat. Enterprising landlords respond to this demand by subdividing their flats into even smaller units using flimsy internal walls – and they might even go further and set up bunk beds for individuals to live in. These beds are closed off with grills which can be locked during the day – the so-called notorious “cage housing”. These minuscule living spaces are just large enough to sleep, to store an individual’s clothes and perhaps accommodate a small TV at the foot of the bed. From the outside, you wouldn’t know these flats are subdivided, other than for the number of air conditioning units sticking out. Small paper flyers for this type of accommodation can be found plastered on lamp posts and stairwells.
Transfer to China in 1997
The Chinese and British signed a joint declaration in 1984 to return the whole of Hong Kong to China in 1997 as a “special administrative region” under Chinese control. The agreement was that China would respect Hong Kong’s freedoms and capitalist system for 50 years. Things went well for the first few years after reunification.
Repression from China
China has broken its word and launched a steady assault on Hong Kong’s independence and civil rights. In 2019, a proposed bill to allow China to extradite Hongkongers who were critical of Beijing primed a huge wave of protests on the streets, and the bill was withdrawn. But China got its way one year later with the “National Security Law” by which the Hong Kong authorities must hand over to China any person who poses a threat – or some such vague formulation. Since then, many activists and journalists critical of the regime have been rounded up, newspapers have been closed (like “Apple Daily” whose founder is now facing life in prison), and freedom of the press has ended. The cherished principle of “one country, two systems” has ended.
China naturally dislikes free elections so in 2021 it changed the electoral system in Hong Kong to allow only “patriots” (ie pro-Beijing candidates) to put their names forward.
The world has been looking on helplessly. The UK declared that up to 3 million Hong Kong residents to settle in the UK and apply for citizenship.
Hong Kong today
Proud HongKongese have a long-held suspicion towards the PRC and consider themselves more open-minded, cultivated and cleaner than their mainland brethren. But the latter have been steadily streaming over to HongK ong since 1997, and this together with the permanent traffic of Chinese tourists makes the territory feel more and more Chinese.
Manufacturing in HongKong has already been shifting to the mainland for a while now, and the attractiveness of Hong Kong as a financial hub is now in question. Offices of foreign companies are moving out, to be replaced by Chinese companies subsidised by the Chinese government. And China has been pushing Shanghai as financial hub. The international flavour of HongKong could thus be coming to an end. The fact that well-educated young people are leaving in droves is another nail in Hong Kong’s coffin.
Perhaps it’s the right time to visit the territory before the sun goes down!