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Gap between rich and poor in Hong Kong widens despite economic boom
By Channel NewsAsia's Hong Kong Bureau Chief Roland Lim | Posted: 27 June 2007 2254 hrs
Hong Kong may be riding an economic boom, but not everyone has been able to cash in and the gap between the rich and poor is now at its widest.
Continuing the countdown to the tenth anniversary of the Handover, our correspondent asks the people whether they're better off a decade after they reverted to Chinese rule.
Take a walk down Central Hong Kong, and one has a one-in-ten chance of bumping into a homegrown millionaire, in Hong Kong dollar terms, that is.
The city's gross domestic product per capita exceeds that of Europe's four big economies, and even Japan's.
Not surprisingly, bankers, fund managers and lawyers are in high demand here.
But with the fast growth of the local economy, Hong Kong society is increasingly divided into the haves and the have-nots.
58-year-old Chung Kwai Keung is among those who've yet to benefit from the boom.
He is an executive committee member of the Hong Kong Confederation of Trade Unions.
Mr Chung said: "My father used to tell me, "You can survive as long as you have a cotton coat to wear, even if it's torn." Sadly, that cotton coat can no longer be worn. Perhaps it's because I'm growing old that I'm now a security guard."
In the 1980s, Mr Chung helped set up a plastic moulding factory in neighbouring Guangzhou, earning US$20,000 a month.
After his business fell on hard times, he returned to Hong Kong just before Britain returned the city to China in July 1997.
He could only find work as a repairman and plasterer, earning about US$800 a month.
Mr Chung said: "I believe my situation was related to the Handover. After July 1st, government leaders focused on developing the commercial sector and paid less attention to the working class."
Mr Chung's concerns about life under Chinese rule were shared by many, including those in the middle class.
Keith Law's apprehensions prompted him to consider moving his family to Singapore in the early '90s.
But the father of two decided to stay put, and ten years after the Handover, he is much more optimistic.
Keith Law, Sales & Marketing Director, CCT Telecom, said: "I have much more confidence in the job market and I worry less about losing my job. I bought this flat during the SARS outbreak when there were few buyers and the price was low. I've learnt that one should be well prepared and ready to grasp opportunities that are available. The price of my property has risen by 40 to 50 percent."
Unlike Mr Law, many Hong Kongers were caught in a property slump after the Handover.
The Tung Chee-hwa administration decided to release 85,000 new flats annually in an effort to provide affordable housing for more people.
That, coupled with the Asian Financial Crisis - the same year, pounded death nails into the property market, which plunged 70 percent.
Mr Law said: "A friend of mine bought a flat that cost about HK$3 million. The price fell by 50 percent the day after he bought it! A little later, the price went down by another 20 percent. Within two weeks, he lost close to HK$1 million!"
At its peak, the number of households in negative equity - mortgage holders owing more than their properties are worth - reached 110,000.
But this year, the figure's down to just 10,000, a clear indication that the Hong Kong economy has bounced back.
However, what cannot be ignored is the growing disparity between rich and poor.
The richest households earned on average US$10,000 per month last year, compared to US$300 for the poorest.
And while it may be a growing trend for developed economies like Hong Kong, many critics have been quick to point out that there should be legislation for minimum wage here as well as a universal retirement fund for the elderly. - CNA/ch
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