Overpriced-junk retail sector peaks, at last

August 1st, 2014

Earlier this week, we heard that Mainland students in Hong Kong were increasingly renting single rooms with local families rather than sharing whole apartments – often in fairly fancy developments – with one another. One reason, tacked on at the end of the South China Morning Post story: “…the central government’s anti-corruption campaign has curbed ostentatious spending…” Today we get the news that the city’s retail sales are continuing to fall, especially in the luxury-goods sector. Again, the Mainland corruption crackdown is cited as the cause.

Not everyone wants to admit such a link. The HK Retail Management Association claims that unstable weather and the World Cup in Brazil were to blame, while the Standard notes a government spokesman attributing the drop to ‘moderation in tourist spending on big-ticket items’ – in other words, lower spending was caused by lower spending.

This is not surprising. The cramming of more and more people into Hong Kong is supposed to reflect the city’s dazzling success as some sort of ‘hub’. As right-thinking people have come to realize, it’s a scam: the local community suffer overcrowding, higher rents and reduced economic opportunities, while the landlords make more and more money. Now it becomes clearer (though Mainlanders’ behaviour in the local property market and in Macau already made it pretty obvious) that the flood of money distorting the economy so badly is linked to China’s corruption. Call it a key pillar of the economy all you want; it’s the proceeds of crime.

(And let’s be blunt about this: the more landlords make, the less you and 7 million others have to spend on other things. ‘Tourism’ damages the economy.)

The overpriced-junk – also known as ‘luxury’ – retail sector was probably approaching saturation point anyway. My own neighbourhood is generously providing space for such purveyors of tat as Ralph Lauren (drab jeans and shirts) and Royal Selangor (metal mugs renowned for being literally lackluster). A bit down the way are a couple of obscure boutiques selling some remarkably ugly swimwear for women; there’s also the inevitable perfumed candle place and a store selling handcrafted artisanal organic blah-blah writing paper in shades of green and purple. This is scraping the bottom of the luxury goods barrel: at least the tacky Mont Blanc Meisterstuck Heritage Perpetual Calendar (huh?) can tell the time. They should have a big sign at the Wellington Street/Lyndhurst Terrace junction saying ‘You Are Now Entering the Utterly Pointless Crap Zone’. Even the most desperate and shallowest cadre will scratch his head in bewilderment if some groveling toad-like shoe-shiner tries to sweeten him up with a box of handmade puce envelopes.

Are we going to see any closures? If we do, some of the local jewellers like Chow Sang Sang and Chow Tai Fook, with branches now infesting even down-at-heel districts in Kowloon East, may be the first to shut some outlets. Big international brands may stay put; their presence is often ‘strategic’, which means, following the warped economic logic of designer labels, they are happy to lose money in order to raise their profile among the emerging Chinese middle class.

Of course, this does little or nothing to curb the Yakult-buying hordes from Shenzhen.

I declare the weekend open with some exceptional weirdness: a 1974 jazz album called Power of Source by a band known as the Apollo Stars. The music is not too dreadful – I suppose – even if unpolished. What is interesting is that this is a Scientology production. Yes, that’s L Ron Hubbard, founder of the multilevel marketing scam-cum-cult, there at the mixing console. It makes a Meisterstuck Perpetual Calendar seem normal in comparison.

 

The United Front’s self-defeat

July 31st, 2014

Hong Kong’s pro-democracy Occupy Central movement was wilting several months ago. Only hardcore enthusiasts came to its ‘deliberative’ sessions or expected to take part in its pretentious-sounding ‘referendum’ on obscure election technicalities. Then the Chinese Communist Party came to the rescue. Rather than ignore the struggling band of academics and activists and let them fade away, the Leninist instinct was to treat them as a serious challenge to the state, separatists attempting to usurp power.

It organized all the resources at its disposal to crush the threat to one-party control, wheeling out shoe-shining businessmen to spout ridiculous alarmism, publishing a poorly worded White Paper to redefine the official reality, and even resorting to cyber-attacks and smears. One of its tactics was to get a sorry group of pro-establishment worthies to change its title from ‘Silent Majority’ to the ‘Alliance for Peace and Democracy’ and launch a signature drive against Occupy Central to try and match the participation rate of the ‘referendum’, which the heavy-handed United Front campaign had inadvertently turned into a huge success.

The well-funded and staffed ‘Anti-Occupy’ petition showed all the signs of desperate overkill: barely literate villagers unsure what they were signing, acceptance of signatures from Mainland tourists, and similar opportunities for rigging the outcome. (Two anecdotes that have come my way in the last 24 hours: a guy pushing an empty trolley through Central stopping to sign every time he passed one of the many petition stations; and unenthusiastic staff at a private Mainland-owned company being dragged to yam cha to complete papers, which were then sent to Beijing’s local Liaison Office.)

The whole Anti-Occupy exercise has been hugely flattering to Occupy Central. There was no need for them to return the favour. But for some reason, they couldn’t resist lowering themselves and dignifying the semi-charade with a response. They did this through a series of Tweets, which seemed laborious if you were on the receiving end of them yesterday, and maybe not so bad when presented as one list – but which still hardly needed to be said. It seems it’s not only Beijing’s officials who can’t master the art of ignoring trivial things and treating people who are beneath as if they’re not there.

Rather than nitpick about a contrived copycat petition driven by losers commanded by the Liaison Office, we should look at the big picture. The Communist Party has been employing classic United Front tactics in the hope that it can coalesce enough of the Hong Kong population to freeze out Occupy Central and leave it isolated and vulnerable. Even top government officials have had to take part. But the attempted citywide ‘struggle session’ has backfired, and society is more deeply divided than ever, not simply between reformists and conservatives, but between free-thinkers and shoe-shiners, the better- and worse-educated and the older and younger generations. Families have feuded over it. If anything, Beijing’s assault has left the pro-democracy forces looking stronger and maybe even a bit less disunited (since the propaganda/smear barrage picked on moderates as mercilessly as on radicals). By raising real fears for press freedom and rule of law, it has alerted skeptics and moderates and attracted overseas attention.

It’s hard to see how the pan-dems can leverage this to great effect. Beijing is too thick-skinned to notice or care much that its battle to crush the democracy movement was counterproductive. Local officials like Chief Secretary Carrie Lam will be left to get Hong Kong back to being one big happy family, and specifically to beg and plead with moderate pro-dems to accept the political reform package when it is unveiled. They are currently trying to lure them with hopes of further reform post-2017, though the frenzied United Front campaign has hardly left would-be waverers in a receptive mood.

So the bottom line: The Chinese Communist Party has shown us its true obnoxious bullying self up-close; Hong Kong people inexplicably still do not universally love and adore the Party; and we remain no more or less on course for guided quasi-democracy.

 

Zhou’s axing: unprecedented, probably irrelevant

July 30th, 2014

Such a nice, warm, charming-looking man – you wouldn’t have thought he could do anything wrong. After holding him under house arrest since late last year, Beijing finally announces that ex-security chief Zhou Yongkang is being investigated for corruption. ‘Investigated’ here meaning ‘indicted, tried and found guilty’. Foreign Policy gives a good summary, and scores extra points for the headline ‘Say It Ain’t So, Zhou’.

A big sigh of relief comes from the South China Morning Post, where they stuck their neck out nearly a year ago and reported that Zhou could be the first-ever official from the uppermost tier of the Communist Party to answer (party-style) for his sins. After the elimination of Zhou’s close ally Bo Xilai, the idea that Chairman Xi Jinping’s anti-corruption purge would extend this high might not have been so far-fetched. But there was a risk. The SCMP’s owners use the paper to demonstrate loyalty to the Chinese leadership. Such a gesture is key to the shoe-shining ‘instant-noodle patriot’ culture of Overseas Chinese tycoons. It doesn’t matter who’s in charge: you grovel as nauseatingly as possible. You also hedge your bets. If some backroom deal had let Zhou off the hook, if some power struggle (or assassination, coup or whatever) had subsequently forced Xi to concede to the Jiang/Bo/Zhou/oil/etc faction, the SCMP’s proprietor and Mainland-linked managers would have been wetting themselves. Instead, they can look back and confirm that they indeed had a scoop. Phew. They live to shoe-shine another day.

One of the most intriguing aspects of Mysterious Big Stuff happening in China is that all manner of experts, analysts and observers come forward who – for all their valid and interesting points – have no idea what is really happening. They cannot have any idea. That’s how Beijing works. So everyone has to guess at what seems most probable or least improbable. For example, is this extensive anti-corruption purge primarily a way for Xi to remove opponents and thus increase his own power? There’s a big debate about this. You could try sitting down, relaxing and calmly reading out aloud the following statement: “This extensive anti-corruption purge is not primarily a way for Xi to remove opponents and thus increase his own power.” And think about how that sounds and feels.

Maybe Xi will now move on to pursue corrupt elements in his own faction and family. Maybe he will assume enough power to overcome princelings’ interests and ‘party before country’ instincts, and push through reforms to modernize the political system and introduce constitutionalism. Or maybe he and his entourage are simply looking forward to having the whole cesspit of a playing field to themselves.

 

People talking garbage to please Beijing, again

July 29th, 2014

Thomas Yasuda, former boss of the First Pacific group, laments the Hong Kong establishment business community’s habit of pushing whatever political views it thinks will please Beijing, rather than being more assertive in taking a lead on issues like democracy. First Pacific – a conglomerate of non-Hong Kong/Cantonese Southeast Asian lineage – were always considered outsiders. But there is something undeniably pathetic about the sight of our local chambers of commerce lining up and dutifully spouting the Beijing-scripted alarmist predictions of damage if Occupy Central goes ahead.

Listening to their latest arguments, you get the impression they are maybe toning it down slightly, as if someone has worked out they need to strike a better balance between pleasing Mainland officials and making fools of themselves. One of them on the radio this morning fretted that if lots of protestors sat down in Central, people on their way to the doctor would find it difficult. Still, their warnings of Thai-style mayhem sound silly, and the ‘threat’ of plummeting tourist numbers too good to be true, unfortunately.

The saddest – or, we may feel, funniest – part of this is that the Chinese Communist Party does not reciprocate support or loyalty. It is a system with no sentiment, and it will drop or simply crush corporate shoe-shiners and diehard devotees without hesitation the second it has no use for them.

It is not only desperate businessmen who obediently recite what they are told to say rather than exercise any independent opinion-forming or other civic leadership. Former civil servants who have transformed themselves into politicians on the make are, if anything, guiltier. Ex-Security Secretary Regina Ip’s determination to be Chief Executive has long since left her speaking other people’s minds. Today, in a letter to the South China Morning Post, she turns history on its head by blaming colonial governors of the 80s and 90s for creating Hong Kong people’s interest in representative government.

Perhaps the Brit governors’ were also responsible for the growth in political awareness and demands for democracy in South Korea and Taiwan at that time. Or maybe she is confusing cause and effect, and forgetting that the colonial government was adjusting, as best it could, to the rise of a middle-class society. Third explanation: she is talking rubbish in the hope that the Beijing officials who will decide the 2017 ballot will notice and approve. (To the extent that ‘democracy has become the vogue’ as a result of political leaders’ actions – as she maintains – it is surely due to the post-1997 administrations that have driven much of Hong Kong’s population to despair at their atrocious policies, not least blatant favouritism for property tycoons.)

The press is full of ‘Hong Kong at boiling point’ stories at the moment, following cyber-attacks, smears, contrived petition campaigns, and all the rest. The United Front push to squeeze the pan-dem/Occupy Central forces out of the mainstream and isolate them as lepers has an other-worldly feel to it, like some 1960s witch-hunt mobilizing illiterate villagers against rightist elements. Chairman Xi Jinping’s Internet clampdown and anti-corruption purge make a depressing backdrop.

If it’s any consolation, the Hong Kong stock market is happily hitting new-for-some-time highs around the 24,500 mark. The collective wisdom represented by millions of independent trading decisions has its limits, and there may be an element of catch-up with bubbles elsewhere, or irrational expectations of walls of money and through trains from Shanghai. But experience has shown that markets do detect – indeed often over-react – when things are going seriously wrong. The money says we will get over this. It certainly isn’t listening to the chambers’ crap about Occupy Central.

Tainted textbooks, tainted burgers, tainted leaders

July 28th, 2014

Hong Kong starts the week panicking about pirated school textbooks. It’s a Big Deal because students pass exams by memorizing the content of set books. If the book itself is faulty in some way – say by being out of date – the memorized content could be ‘wrong’, raising the possibility of failure in exams, a life of penury for the student and shame to the family for a thousand generations. The publishers make a lot of money by frequently ‘revising’ textbooks, making older versions a possible threat to academic success. The financial burden of having to buy endless new editions is obviously heaviest on poorer families. Since the government shows little interest in intervening in this blatant rip-off, we could argue that pirating is morally justifiable. Instead, HK Customs treats the items like poison.

Which brings us rather neatly to the local McDonalds operation, which sort of looks as if it deliberately misled the public about whether it knew it had been using possibly tainted meat from the Shanghai Husi company. In an attempt at damage control, the hamburger chain held a press-grovel yesterday. But the effort backfired when the local top manager simply read out a statement and refused to take questions. Her apology might have been sweet and sincere, but we will never know: the shunning of reporters became the story. You’d have thought a company that makes billions selling repulsive and unhealthy junk would have learnt this sort of thing by now.

For expertise in spin, we should look at the Standard’s ‘Mary Ma’ editorial column today, which manages to turn McDonalds’ problems into an opportunity to display patriotic pride…

Or at least, the mean-spirited and insecure whining that is a certain type of Chinese nationalism. That lamentable tendency could be the real story. Are Mainland authorities using tainted meat (which somehow hasn’t harmed anyone) to target big US brands, like McDonalds, KFC and so on? Are they using it as a way to target another American-owned company, Shanghai Husi – subsidiary of OSI Group of Illinois? Alternatively, are the food-health regulators doing their job well, and have they uncovered, and nipped in the bud, an actual scandal? Maybe we will find out some time. Meanwhile, OSI Group’s boss shows McDonalds HK how to do a convincing press-grovel.

For Hong Kong’s chattering classes, the big thing is the anti-Occupy Central campaign, which has now gathered more signatures than Occupy Central did in its ‘civil referendum’. They seem to have attracted especially strong support from the ‘illiterate old villager’ sector up in the New Territories. And to cap it all, Chief Executive CY Leung and most of his officials announce their endorsement of it.

This is so unwise, it can only be on Beijing’s orders. CY’s own instinct might be to sign up to the no-expense-spared, United Front petition, but the more level-headed of his colleagues like Chief Secretary Carrie Lam would surely know better. By taking part in a civil-society hate-fest, he ceases to be (however notionally) a leader for the whole community. By abandoning his above-it-all neutrality, he reduces himself to the role of leader for just part of the community, and even risks elevating Occupy organizer Benny Tai to a sort of equal status as leader of the (or an-) other part. At best, he loses any right to call for consensus or unity.

What other petitions will he sign in future? The one against construction of a mosque in the New Territories? The one against giving foreign domestic helpers a pay hike? The Society for Truth and Light’s campaign against gay marriage? One in favour of wantonly creating unnecessary divisiveness?

On a more positive note, an overseas newspaper finally gets it about Hong Kong. I have some misgivings about the Guardian, not least because of the almost self-parodying moralistic righteousness of its columnists and its even ghastlier readers, flaunting their superiority as vegetarians who adopt black babies (though maybe these really are made-up). But it hits the nail on the head today: Hong Kong’s political problem is simply its economic structure. And, the headline continues, the ‘elite’ knows it. As, now, does the overseas press. That just leaves the pro-dems.

 

 

‘If Occupy goes ahead, you’ll have to live in tiny homes’

July 25th, 2014

Scare stories fill the pages of the South China Morning Post today. They would be more convincing if they weren’t paid-for. The anti-Occupy Central petition campaign announces 662 locations at which you can protest against the threatened pro-democracy civil disobedience action. Mostly, the sidewalk stalls are outside MTR stations and similar places. Bigger indoor ones are at the Kowloon Federation of Associations, the New Territories Association of Societies and similar joyless, United Front-sounding establishments. The reports are that people are getting HK$10,000 a month for helping out with this. Not a lot per-person, but on this scale it adds up to some half-way serious money, which confirms that someone is obsessed with matching Occupy Central’s referendum to an almost-unhealthy degree. Among other evidence: reports of Mainland students in Hong Kong being pressured to sign.

Buying a more budget-conscious quarter-page, as you would expect, various chambers and business lobbies obediently repeat the desperate arguments about the horrors that await us should the extremist anarchist lunatics go ahead with their pro-democracy sit-in. They claim that the business district will suffer gridlock, when common sense suggests it will be the first time in years the streets are free of traffic jams. And they warn that there will be fewer tourists clogging the place up, which can only bolster our feeling that Occupy Central sounds like a better and better idea all the time.

Even real, live non-paid-for scare stories fail to shock today. McDonalds in Hong Kong takes chicken nuggets off its menus as we learn that it and Burger King, KFC and other chains have been selling food that might be disgusting and unhealthy. This is ‘news’? And the suspect meat came from a Mainland firm. And this is also ‘news’? ‘Fast-food outlets and Mainland companies produce items fit for human consumption’ – that would be news.

Among the business groups bleating about Occupy in the SCMP ad is the HK Real Estate Developers Association – a bunch of grasping scumbags that would put Shanghai Husi meat packers and Yum! Brands to shame. By some sort of cosmic coincidence, the rest of that page happens to be taken up by an in-depth article on Cheung Kong’s Mont Vert development in Tai Po, home of the famous 177-sq-ft apartments buyers aren’t allowed to see. By ‘in-depth’, I mean taking most of the facts at face value and largely avoiding (or comprehending) the rottenness of the whole land and housing system. Much of the story revolves around whether the developer is breaking the law by not allowing viewings. The overriding impression is of the government body concerned, the Sales of First-Hand Residential Properties Agency, apparently petrified of the attention, doing nothing and saying nothing.

I declare the weekend open with Luxury Apartment of the Month:

It has a grand 269 square feet of actual space, which includes ‘One Bedroom’ (which is one more than you would expect, I suppose). You can’t get mortgages for old places like this in Soho, so the selling point is that it’s yours for a mere HK$4 million in cash. It looks like a Detroit crack den, or some last-resort hovel for a family in Gaza – or the setting of some sick slasher film. For a few thousand bucks, the seller could have given it a lick of paint and switched a light on – but they haven’t even bothered to do that. Mont Vert suddenly makes sense: homes are so tiny and miserable, it’s an act of mercy not to let you look at them.

 

Otherwise, everything’s fine…

July 24th, 2014

All Hong Kong people wanted in the first place, so far as anyone could tell, was a park. Instead, the West Kowloon Mega-Culture Arts Hub Zone Complex is to lose much of its greenery, as 5,000 planned trees get the chop in favour of bare lawns and something called a ‘black box theatre’. (I thought the revamped Central Police Station on Hollywood Road was going to have a ‘black box theatre’ or three. Maybe I dreamt it.) To our great relief, the Mega-Culture Arts Hub Zone will retain its massive – and massively expensive – underground car park and Xiqu Centre; I don’t know how I could live without them.

As part of a much bigger pattern, this is barely remarkable. People wanted affordable homes; instead, one of the biggest vacant lots of their land was handed over to the American Disney corporation to house an attraction for people from outside the city, and HK$7 billion was chucked down the toilet on a vast cruise terminal that sees maybe one ship every two weeks. People wanted cleaner air; instead, they are getting a HK$80 billion road bridge to Zhuhai no-one can think of a use for. People wanted better and faster transport connections linking the downtown and suburban districts; instead, they are getting a HK$70 billion hole in the ground to Shenzhen as part of a high-speed rail line to a town near Guangzhou they’ve never heard of. People want decent-quality education, healthcare and economic opportunities; instead, they get Harrow, Cyberport, a Science Park, multi-billion-dollar border crossings, an influx of Mainland shoppers and, before long, a third runway.

Meanwhile, genius Chinese government officials come down from Beijing and can’t work out what Hong Kong people’s problem is.

And, to cap it all, someone has just given me some work to do. ‘Sorely vexed’ doesn’t even start to describe it.

 

Bad editorial judgment leaves newspaper looking good

July 23rd, 2014

It seems the South China Morning Post’s head honchoes were not impressed at the night-shift duty editor’s decision late Monday not to carry the ‘Jimmy Lai Eats Babies’ stuff China’s agents hacked from Next Media’s computers. To common readers, it looked like a good call: a refusal to pimp the front page out to the Chinese Communist Party’s dirty tricks brigade. To the paper’s big bosses, it was a glorious opportunity to serve Beijing squandered – a lost chance to show the proprietor that they would eagerly put Mainland propaganda ahead of journalistic integrity any day.

Still, you can’t undo the past; you just have to make the best of it. And so this morning, the SCMP reports the story to a large extent as the smear campaign it is. As if to say ‘We of course, unlike Sing Tao and so on, would never stoop so low as to spread this dirt’. The article runs down one column on the side on a front page dominated by news from a sprawling, impoverished and unmanageable archipelago of Javanese schemers, Balinese mystics, Overseas Chinese shysters and numerous tribes of jungle-dwellers and cannibals – where, despite more skullduggery than we can imagine, they’ve just pulled off a democratic election.

Better late than never, the SCMP sifts through the purloined materials anyway on page 3. Veteran pro-democrat Martin Lee on the radio this morning spoke of the revelations as a ‘white terror’, but the truth is that the hackers unearthed a vast pile of insipidness. The nearest approximation to juicy bits make, if anything, Beijing look bad. The Next Media mogul paid Paul Wolfowitz (pocket change, but then he’s no Kissinger or Blair) apparently to help open doors while looking for investment opportunities in Burma. Next’s management complained when (partly China-owned) Cathay Pacific kowtowed and withdrew advertising, and ex-Chief Executive Donald Tsang’s wife was reportedly upset when Catholic-phobic Communist officials barred her from Bishop Joseph Zen’s investiture as a Cardinal. Such is the excitement of rummaging through Jimmy Lai’s laundry basket.

So, owing to an error, the SCMP emerges with some integrity intact; if its editorial people had done their job ‘properly’, they would have harmed the paper’s reputation. It is a strange world we live in where a tycoon buys a media outlet in order to trash its integrity (and financial value) as a way of proving loyalty to the leaders of a Communist dictatorship – who have a long record of kicking sycophants in the teeth the second it suits them, at least when they’ve sorted out the latest bubonic plague outbreak.

 

Desperately dishing dirt

July 22nd, 2014

We already know that Hong Kong’s pro-democracy Occupy Central movement has unnerved the mighty Chinese Communist Party. But just in case anyone didn’t get the message, here’s a big clunky smear campaign to bolster the looming civil-disobedience campaign’s improbable image as a threat to the entire People’s Republic, if not global civilization.

One victim is pro-democracy academic Joseph Cheng, who speaks out after being targeted by Beijing-funded Wen Wei Po for not filling in an Immigration Department form correctly 12 years ago, and for failing to credit a co-author in some learned paper. What is interesting here is how the propaganda sheet got hold of the information about the passport application, which could only have come from Cheng’s family, his lawyer – or from within the Hong Kong government.

Wen Wei Po goes ballistic today over the extent to which media owner Jimmy Lai bankrolls the pro-democrats. Other pro-establishment papers, including the Sing Tao/Standard, join in, re-hashing the stuff about Lai hobnobbing with Burmese officials and with former US Deputy Defense Secretary Paul Wolfowitz. This follows Beijing officials’ denials that their diplomats in Burma had invited Lai and Wolfie to dine. The Burmese government’s opening to the West and distancing from China in recent years is no doubt connected to all this. It’s hard to say whether the whole thing is murky or just childish.

Presumably, we are supposed to infer that US interests fronted by the discredited comb-licker are funding or manipulating Hong Kong’s pro-democrats via Lai, with a view to taking over Hong Kong as the first step in its plot to topple the regime in Beijing – perhaps with the aid of a secret squad of Rangoon-controlled killer pythons. The extensive information on the donations was mysteriously emailed to everyone yesterday. It seems that the South China Morning Post is (as of this time) among the media outlets with better things to do than be used so blatantly by Beijing’s less-than-subtle operatives.

Perhaps the most outstanding thing about the smears is their lameness. Is this the worst China’s dirty tricks specialists have on the pro-democrats? Presumably there’s a lot more tucked away for real emergencies. Either that, or they’re seriously amateurish.

Meanwhile, the extensive flattery of Occupy Central continues with Robert Chow’s ‘Peace and Democracy’ signature-collection extravaganza. (This campaign also revolves around a smear, with its constant innuendo associating Occupy with violence.) With Mainland visitors helping to ramp up the numbers, the organizers are beside themselves with excitement at the possibility of matching the 800,000 people who voted in the pro-democracy ‘civil referendum’. Pro-Beijing forces loudly dismissed that opinion poll as meaningless, invalid and even illegal – yet they are clearly possessed by it.

None of this changes much, except to remind Hong Kong’s pluralistic and tolerant people that they are not immune from Beijing’s current desperation and fear, as displayed in oil rigs parked off Vietnam and the purging-by-corruption-charges of ever-wider circles of officials. China believes it has a formula for giving Hong Kong a choice of Chief Executive candidates in 2017, which will get through the Legislative Council, not subsequently be boycotted by voters, and most of all not compromise the Communist Party’s absolute control. The smearing passes the time while we wait for it.

 

Real-estate valuations and the Pontikege Effect

July 21st, 2014

The Yellow River, a historic cause of devastating floods, is often called China’s Sorrow. Under the ‘One Country, Two Systems’ principle, this does not apply in Hong Kong, which has its own separate misery: a parasitical real-estate industry.

The city’s housing market never ceases to horrify. Last week, developer Cheung Kong announced the sale of apartments at Mont Vert, near Tai Po, a sort of inconvenient but nicer version of Shatin, up in the New Territories. Some of the units were as small as 177 square feet and habitable only by extra-tiny dwarfs. Furthermore, the developer barred buyers from inspecting the site itself, requiring them to make their decision after viewing a (let’s say) possibly misleading mock-up ‘show flat’ at another location – an arrangement that may not even be legal. On top of that, the buildings are next to a graveyard emanating a non-stop, high-volume barrage of creepy and malevolent feng-shui vibes.

In a sane world, you wouldn’t expect many takers. But this is Hong Kong, and over the weekend thousands of people stampeded to snap up the apartments. That, at least, is how the Standard reports it. The Standard talks up the property market as a favour to tycoons; developers also have their own ways of making demand look stronger than it really is (by concocting ‘thousands’ of would-be purchasers, for example). But even allowing for some exaggeration, it seems that quite a few people seriously want to buy these places.

It could be that the news coverage of the possible illegality of the sales spurred interest. That sounds crazy, but as they say: there’s no such thing as bad publicity. Especially when you’re Cheung Kong mega-tycoon Li Ka-shing. My theory is that the public hear that Li is making some extra cash by (possibly) bending the rules a bit; therefore, some of this wealth sort of rubs off onto you if you buy into what he’s offering. (It works with spin-off stock-market listings.) If that’s too illogical to imagine, it could just be that people have been successfully conditioned over the decades to enjoy being shafted by property tycoons, as if it is a pleasurable duty – indeed, a privilege.

The Standard notes that second-hand apartments in the neighbourhood are pricier than the new ones at Mont Vert. This looks like another mystery: it is as if we are in a parallel universe where the laws of economics are inverted. One perfectly feasible explanation is that older apartments are simply better – as in ‘less crappy in terms of quality and design’ – than recent construction. Another is that property sellers cannot mentally grasp the idea of prices coming down. This certainly happens with retail space in my neighbourhood, where landlords will forego many hundreds of thousands in rental income for months to satisfy their feeling of ‘not losing’.

Visiting Tai Po over the weekend, I was intrigued to find not only cheese- but chocolate-flavoured pontikege on sale…

And there I was all those years, unaware that pontikege of any description was available. Or, indeed, existed.

Note the discount: buy five of the things and you pay HK$16 rather than HK$22.50. With bargains like this on offer nearby, how can local property values fail to soar?