Hong Kong has been affirmed as a cozy club for the uber-wealthy, shortly after being named the world’s shiniest beacon of economic freedom yet again by the Heritage Foundation. Wealth-X has rated the territory the newest, largest congregation of “ultra-high net worth” (UHNW) individuals – each with at least US$30 million in assets. The illustration (above) is described as the wealthiest neighborhood on earth.
Wealth-X’s 2018 World Ultra Wealth Report announces almost gleefully: “In 2017, the financial center of Hong Kong posted rapid growth in its ultra-wealthy population to overtake the New York metropolitan (metro) area as the world’s largest UHNW city. The semi-autonomous region experienced a 31 percent increase, propelling the number of ultra-wealthy individuals to just over the 10,000 mark.”
That goes with the Heritage Foundation’s 2018 Index of Economic Freedom, which once again has ranked the territory at the top of its list, as it has for more than two decades. The US conservative think tank lavishes its praise as follows: “An exceptionally competitive financial and business hub, Hong Kong remains one of the world’s most resilient economies. A high-quality legal framework provides effective protection of property rights and strongly supports the rule of law. There is little tolerance for corruption, and a high degree of transparency enhances government integrity.”
However, as Asia Sentinel has repeatedly pointed out, an informal series of interlocking cartels has stifled competition in the territory for decades – in property, domestic banking, food merchandising, petrol stations, and a long list of other areas. In most circles in which the common consumer moves, there is no competition whatsoever. A competition law, passed in 2016, is shot full of exclusions including a general exclusion for “agreements that ‘enhance overall economic efficiency’” and another allowing the Chief Executive to ”grant specific exemptions on public policy grounds, or in order to avoid a conflict with international obligations that directly or indirectly relate to Hong Kong.”
Freedom House, a US-based NGO that conducts research on democracy, political freedom and human rights, considers Hong Kong only “partly free” in its Freedom in the World 2018 profile. As with Rashomon, the US independent watchdog looks at the same Hong Kong as the free market Heritage Foundation does but sees a different cityscape: “The people of Hong Kong, a special administrative region of China, have traditionally enjoyed substantial civil liberties and the rule of law under their local constitution, the Basic Law. However, the chief executive and half of the Legislative Council are chosen through indirect electoral systems that favor pro-Beijing interests, and the territory’s freedoms and autonomy have come under threat in recent years due to growing political and economic pressure from the mainland.”
The erosion of the kind of freedom Hong Kong used to enjoy has also been creeping up year after year. Reporters Without Borders ranks Hong Kong 70th of 180 governments in its 2018 World Press Freedom Index. Hong Kong was ranked as high as 58th just five years ago, in 2013. Capturing the zeitgeist of Hong Kong, the defender of free press says: “As Hong Kong has become polarized between “pro-Beijing” and “pro-democracy” factions, its media have experienced growing interference by the Chinese authorities. Even if the violence against journalists has almost stopped, they are finding it increasingly difficult to cover subjects involving governance in either Hong Kong and mainland China.”
In 2017, a Hong Kong Census and Statistics Department study reported that the market income Gini coefficient – an index from 0 to 1 with 0 indicating complete income equality and 1 indicating total income inequality – for households hit a record high of 0.54 in 2016, just behind New York among major cities selected for comparative purposes in the report. That was the highest level of economic disparity since the city had started keeping records on income equality almost half a century ago. The 2016 data showed that the richest 10 percent of households – with a median monthly income of HK$112,450 – earned about 44 times more than that of an average of HK$2,560 of the poorest 10 percent.
A few high or low ratings might help raise awareness of public policy issues, but these reports probably won’t change the daily lives of Hong Kong people. Still, information is power. For example, the last time a more comprehensive report related to income inequality in Hong Kong with the potential to stir up some groundswell of interest was released by Civic Exchange, a local NGO, in 2011. Unfortunately, the think tank hasn’t done more work on this since. Those kinds of reports – not merely a single volume – just might help shed some light on pressing public policy issues and drum up some interests for advocacy and mobilization in making the lives of people incrementally better in Hong Kong.
Thaddeus Hwong (@policyquests) is an Associate Professor at York University, Canada.