Big Lychee, Various Sectors

“Please avoid prolonged exposure to wintry winds,” says the Cold Weather Warning issued by the Hong Kong Observatory.  This is a bitter blow for those of us who were planning to go down to the waterfront this morning, throw a towel on a concrete bench near the ferry terminals, strip off our clothes and stretch out for a long, relaxing day basking in the northeast monsoon rolling through town on its long journey down from the Siberian uplands.  Interestingly, we also have a Red Fire Warning (not to be confused with a Red Fire Ants Warning – pay attention!) to remind us that, though chilly, the dry hills are just a spark away from furnace-like conflagration.

But wait!  There’s more!  A Frost Warning, applicable only to New Territories mountain vegetable growers who still haven’t heard that World War II has ended, was up overnight, but has now come down.  And we have a Red Flag Warning alerting us to the possibility that Big Wave Bay wasn’t called that just for fun.  Meanwhile, the roadside Air Pollution Index in Central today is Very High, which means ‘mostly nitrogen oxide, some oxygen’.

The big excitement for government officials whose duty it is to raise alarms is the first-ever Red Outbound Travel Alert, advising Hong Kong people to avoid prolonged exposure to Thailand on account – as it happens – of matching Red Shirts, the supporters of deposed Prime Minister Thaksin, who are planning a major march in Bangkok in the next few days.

The OTA system was introduced in October 2009 in response to widespread public whining after Hong Kong tourists suffered inconvenience when protests, also in Bangkok, shut down airports (Yellow Shirts on that occasion).  It covers the 50 countries Hong Kong people are most likely to visit, which is why the likes of Afghanistan and Somalia do not appear.

Under the easy-to-remember system, an Amber Warning (currently applying to five countries with predominant or large Muslim populations but obviously that’s just a coincidence) means ‘Everything is cool, you can probably relax, but don’t blame the Security Bureau if you get shot or kidnapped because we issued an Amber Warning’.

The Red Warning is a much bigger deal, causing in this instance the cancellation of package tours to the Land of Smiles, and therefore inflicting commercial costs on travel companies and airlines (though only outbound operators – it’s not like it affects our precious mainland tourist trade).  It essentially means ‘We wouldn’t go there ourselves, but then we’re Hong Kong bureaucrats who fall sick after touching handrails and won’t let our kids play on grass, so everything’s probably fine, but you can’t say we didn’t put up a Red Warning’.

The Black Warning will probably rarely or never happen, because it could cost other businesses money.  Some corporate HR departments and travel insurance policies undertake to evacuate people if it is raised.  It means ‘We’re going to freeeeeak out even if you don’t, and why didn’t you listen to us when we issued the Red Warning. And please pass the antibacterial hand gel’.

Bloomberg report that the GDP of Shanghai has overtaken that of the Big Lychee for the first time “in at least three decades.”  What they mean is that they can’t find any pre-1980 data for the mainland metropolis.  The last time it surpassed the then-British colony was probably back in the 1930s, when Shanghai had the factories, department stores, night life, film studios and money, and Hong Kong was a sleepy trading backwater.

As Bloomberg point out, mainland GDP figures are still not especially reliable; local government officials have an interest in exaggerating results and exceeding targets – though some, notably in the south, are rumoured to under-report in order to pay less tax to the centre.

The Shanghai of this story, however accurate, comprises the city with the ugly skyscrapers we all know and love, plus a large rural hinterland.  It adds up to 2,500 square miles in size, versus the Big Lychee’s humble 425, and its population is 19 million to Hong Kong’s 7 million.  So people there are still significantly less productive, creating barely a third the amount of wealth per person than Hongkongers.  It was only two years ago that Shanghai proudly announced to the world that its farmers’ annual disposable income had exceeded the grand sum of US$1,400.

The ‘Shanghai faction’ who graduated from running the municipality to the nation in the 1990s under Jiang Zemin lavished their favourite city with resources.  This led to heavy subsidies for foreign investment, generous land and other aid for favoured local companies and a more state-planned economy than in many other parts of China.  As a result, it is less accomplished than it likes to think in comparison with other regions, with low levels of rural entrepreneurship, self-employment and patent applications, and low average size of private-sector companies.

But it works hard on its image. During a visit in the mid-90s, I saw a checklist of grand vanity projects, described as ‘pearls’ if I remember rightly.  They included the grotesque TV tower, which had just opened (you had to wade through mud to get to it), the impressive museum with galleries named for Hong Kong tycoons, and the yet-to-be-built opera house.  Some schemes, like many of the skyscrapers and the maglev train from the new airport to a suburb, were plain tacky.  Like Singapore, Shanghai seems to believe its own PR.

(Beijing’s decision a year ago that Shanghai will be the PRC’s official, number-one, oh-so-important international financial and (for some reason) shipping hub by 2020 looks like a pat on the head for Jiang’s old clique in retreat. One particularly desperate policy would be to subsidize private equity managers’ salaries if they set up shop in Pudong – why didn’t Lee Kwan Yew think of it first?)

The Shanghai-will-take-over-from-Hong Kong idea took off after the Big Lychee’s handover to China in 1997.  So traumatic was Hong Kong’s shock after the city’s bubble burst – five years’ deflation interspersed with suicides and SARS – that some impressionable local folk saw it as a deliberate policy of Beijing’s.  Jiang Zemin, the theory went, had ordered chief executive Tung Chee-hwa to wreck Hong Kong in order to create the space for their Yangtze Delta homeland to rise in its place. (Maybe a few even pondered Shanghai’s fate after the communists took power in 1949 and downgraded its economic role to cleanse it of capitalist, foreign decadence.)

If there was a plot to undermine the Big Lychee it was opportunistic and aimed at local morale and self-confidence. Official reassurances that Shanghai was a partner and not a rival and talk of the need for integration grew more insistent, as if to sow the seeds of doubt – especially combined with Shanghai’s leering hubris as it became the world’s top container port and won silly prizes like the Expo.  Then came the Great 2006 Marginalization Scare kicked off by chief secretary Rafael Hui and picked up with glee by pro-Beijing ranters eager to frighten disloyal fellow Hongkongers into toeing the line.  Horseshit about how grateful pitiful Hong Kong should be for the mainland’s supposedly generous support is now swallowed without question (as yesterday by the South China Morning Post’s Alice Wu, on the right).

The Big Lychee’s leaders remain patriotically silent about Shanghai’s numerous shortcomings and inadequacies as even a junior international financial hub.  Even when reminding the world that Hong Kong has no capital controls, an independent judiciary and a free press, they will never add “unlike Shanghai, which has corruption, protectionism, covered-up scandals, IP rip-offs, investor rip-offs, not to mention thugs that smash up migrant labourers’ kids’ schools, hospitals that dump the poor in the street to die and a government obsessed with the banning of pajamas in public.”

One last thing: when did anyone last see a Hong Kong hooker in Shanghai?

The news this morning comprises a long parade of people saying, alternately, “Hong Kong must abide by the Basic Law, which does not provide for referendums,” and “Under our system anything not expressly prohibited is permitted.”  A fascinating debate in which both sides are pretending that we’re about to have a referendum, even though both know that we’re not.

The confusion arises from Beijing’s hasty and slightly hysterical reaction when the five pro-democracy legislators resigned and thus triggered the five by-elections that they fancifully declared to be a poll on the single proposition of universal suffrage.  Since the Big Lychee’s pro-Beijing camp cannot adopt a public position at odds with that of the central authorities, they have to join in and loudly denounce as unconstitutional referendums that aren’t going to happen, even while our local leaders go about organizing the perfectly legal by-elections that will.

The local leadership of Chief Executive Donald Tsang and his senior officials are the most prominent victims of this illogicality.  Not only must they organize the five by-elections for May while reciting the mantra that the Basic Law doesn’t allow for referendums, they must try to conform with Beijing’s order that loyalists boycott the exercise, which in their case means not voting.  Yet abstaining on polling day presents its own problems.

After encouraging people for years to take part in, and therefore legitimize, our rigged election system, it would look odd for Sir Bow-Tie and his colleagues to implicitly urge us all to stay away.  It would raise concerns that civil servants of all levels, who are sworn to implement government policy, could be pressurized into not voting or penalized if they exercise their right to do so.  Most of all, how many of us will be tempted to go along to the polling station if Donald indicates that he would prefer us not to?

The chances are that they will wriggle out of it by saying it is a matter of individual judgement and of course you can’t vote if you don’t support any of the candidates.  It would be convenient if only the name of the resigned lawmaker appears on each ballot, thus winning by default with no contest, but this won’t happen.  First, the League of Social Democrats have vowed, if necessary, to run against themselves by putting a second candidate forward to ensure that the actual voting – this is on Planet Referendum, remember – takes place.  Beijing does not have a monopoly of irrationality. Second, as in every Legislative Council election, you can be sure that in every constituency some spotty, inadequate  truck driver, socialite, or fanatic will get him or herself nominated as candidates.  Several, probably.

Most likely outcome: everything will backfire against everyone, with the net result that nothing noticeable actually happens.

The people of Hong Kong wake to the news that HSBC’s CEO Michael Geoghegan is to be paid an extra GBP300,000 – HK$3.5 million – a year as a cost-of-living adjustment following his move here from London.

The Big Lychee is not necessarily pricier than the UK capital.  For example, the lowest fare on the London Underground is HK$46 (cash) or HK$21 (stored value card), while the Hong Kong MTR charges HK$4 and HK$3.6 respectively.  The longest journey you can do on the MTR, the 80 minutes from Chai Wan to Lo Wu, still costs only HK$44.  The UK minimum hourly wage for someone aged over 21 is GBP5.80, or HK$68, around three times what our local employers’ groups are proposing for our own version.

Hong Kong rents are at least as extreme as London’s, but Mr Geohgegan’s housing is provided for separately; let us assume that health coverage is, too.  So we are naturally curious: what will he spend the money on?

We are told that family comes into the equation, the implication being that Mr Goehgegan’s wife and two sons have balked at the prospect of congee for breakfast every day and stayed put in Britain.  This means heartbreak, homesickness and travel costs.  Let’s say each family member makes six return trips a year in first class at HK$50,000.  That’s knocked HK$1.2 million off that HK$3.5 million allowance.

(That exceptionally pitiful variant of real estate agent known as headhunters would hold their hands up here and yell “stop!”  Travel should be part of the basic package, they would insist, along with housing, car, driver, air-conditioning bills and quarantine costs for Toby the schnauzer.  To which we can only say, “We’ve got over three million to get through; go away.”)

So we have HK$2.3 million left.  One very efficient way for a senior new arrival in town to burn a bit of money is Contemporary Chinese Art.  Indeed, the sum of GBP300,000 was also the estimated price for Yue Minjun’s idiotic cartoon of grinning men and birds when it was auctioned last year, and it fetched over GBP450,000.   So let’s assume Mr Goehgagan takes a stroll along Hollywood Road and snaps up a few of the cynical derivative daubs by lesser-known mainland brush-wielders on the make.  Let’s say, owing perhaps to colour-blindness, a couple of these really ugly hair-salon things by one Jiang Congyi and some of the weighty metal figurines expat bankers seem to like – or anything, really. Bye-bye, another million.

Now we’re down to just HK$1.3 million, and there is light at the end of the tunnel.  And against the beckoning glow, what do we see but the silhouette of Allan Zeman, landlord of Lan Kwai Fong and purveyor of food and beverage to legions of well-paid, wife-less Western men unable to rustle up much more than Heinz baked beans on toast.  Eager to know more about the cultural background of emerging-markets Asia, Mr Goehaggan will start to explore the many varied Oriental cuisines on offer in user-friendly D’Aguilar Street.

From the fake-bamboo Thai place in California Tower, to the fake-bamboo Korean place in The Plaza LKF, to the fake-bamboo Japanese place in the Ho Lee Building, to the fake-bamboo Vietnamese place back in California Tower, he will dine in style, tipping the Filipino waitresses well and wondering why all these different countries’ foods essentially taste so similar.  Dragging a few buddies along for company and quaffing a generous amount of high-quality bottled water and fine imported wines and beers, that irritating HK$0.3 million will be gone within 12 months.

Just HK$1 million to go.  And go it does.  A few trips to Dymocks for books; to Olivers/Great/City Super for Marmite, HP sauce, toad in the hole and other gastronomic essentials for Brits; regular replenishments of underwear at the Marks and Spencer just along Queens Road; some badly needed weekends away at Aman resorts in Phuket, Bali and Bhutan; an inadvisable trip to Macau, maybe; a donation, in response to begging letters from expat housewives, to HK Newt and Pangolin Rescue; a few silk numbers from the famous IFC Mall scarf shop to send home in a fit of guilt after a slightly raunchy night with a few of the fellows down in Wanchai.

And boom – that’s it.  Forget the Porsche.  It’s late August, and the poor guy’s already down to his last 200 grand.

Update: the family, apparently, will be with him, and – as our friendly and wise local headhunters predicted – all travel and education costs are already built into the basic package.  So what will he spend it all on?  The answer: public relations advice on how not to infuriate shareholders.

The Standard quotes a “wide range of reactions” to the Hong Kong Monetary Authority’s introduction of minimum mortgage rates, essentially forbidding banks to make less than 0.7% interest for themselves when lending to homebuyers.  The HKMA’s aim is to prevent institutions from undermining the Big Lychee’s stable and secure financial system the way their counterparts (or branches) in the US and UK did by throwing cheap loans at low-earners to buy overpriced houses with.  The reactions all come from people who profit from what our bureaucrats like to call a “healthy” property market, in which people confidently buy and sell concrete boxes to each other day after day, putting bigger and bigger price tags on them each time, and everyone’s happy.

• HSBC’s Vincent Cheng Hoi-chuen says: “It is impossible for rates to go too low, since banks cannot lend money in return for nothing.”  Except they can, for a certain amount of time, in order to attract suckers (‘expand market share’).  Having lured the borrowers, they then force pricy insurance packages on them, add hidden fees, and, a year or two down the road, jack up mortgage interest rates well into positive territory when the credit cycle turns.
• Hang Seng Bank’s Margaret Leung Ko May-yee chips in to say, in effect, that she is glad to see the HKMA’s top priority is ensuring the profitability of businesses in her industry.
• Standard Chartered’s Benjamin Hung Pi-cheng declares: “The market will determine an appropriate level of price in the long run.”  He presumably means prices of mortgages rather than property (but there is of course a link, and since Hong Kong’s land and property system is controlled by heavy government intervention and a developers’ cartel, ‘market’ forces don’t necessarily determine much).  Both global interest rates and local housing supply are being kept artificially low; we’re up to our waists in mainland stimulus money.  Where is this heading?
• Wong Leung-sing of Centaline Property Agency complains: “It is a very brutish way to intervene in pricing.”  The newspaper adds that he thinks banks should be free to lose money if they want and their shareholders can always sell their stakes.  Yes, banks can ‘lose’ money for a year on a 20-year mortgage with no problem, but Wong is a real estate agent and has a slightly different agenda from the other three.  The financial system is just a financial system, but a ‘healthy’ property market is everything.

Some say that Hong Kong is always experiencing a property bubble.  It might be expanding, it might be just bursting, it might have splattered a while ago and left foul-looking globules of gooey stuff festering all over the carpet and the windows; it is always there.  They complain that pushing prices up though keeping housing scarce is the only trick people like Chief Executive Donald Tsang know.

Others are made of tougher stuff.  Interest rates are low, liquidity is high, supply is tight; therefore there is no bubble, just a rational explanation.  Nobody here but us fundamentals. The HK Trade Development Council (run by a property tycoon) says so (using Hang Seng Bank research, so it must be true).  HK$12,000 a square foot, HK$24,000 a square foot, HK$71,280 a square foot – such prices are all caused by these hard, sound, undeniable factors.  Rental yields mean nothing; just check out that affordability.  And prices are still only barely back to where they were at the market peak in 1997.  Still only barely!

The chart on the right, while devoid of any statistical integrity whatsoever, rather elegantly illustrates a fascinating phenomenon: the correlation between growth in seasonally adjusted HK dollar M1 (the money supply) and the increase in the number of bores, columnists, pontificators, officials, analysts, tycoons and people who bought apartments at the wrong time, assuring everyone that there is not a bubble.  Owing to slightly sloppy methods of accumulating data, some of these may have been referring to mainland property – but I think the picture is clear.  The number of people saying this is not a bubble is rising all the time.  This surely means only one thing: we can relax.

Meanwhile, I can’t resist cutting out and keeping this delightful picture of an absolutely charming young lady in today’s Standard, on page 7, just opposite the above story.  It’s an advertisement from a subsidiary of real estate giant Cheung Kong Holdings:

A couple more pedestrians died yesterday in road accidents.  Although such fatalities are probably no more frequent in Hong Kong than in many other big cities, the reasons are different.  First is the mysterious and in many ways wondrous nature of our vehicles – notably taxis and minibuses – which have a rebellious and malicious will of their own and often ‘go out of control’ for no apparent reason other than spite for their human masters.  The other is that, unlike in other communities, our transport bureaucracy has an official policy of killing (or strictly speaking facilitating the killing of) people who selfishly use up valuable highway space by walking.

A perfect example of this is revealed in the photo in today’s Standard showing the site on Kennedy Road of one of yesterday’s deaths.  The 18-inch wide concrete ridge on which the taxi has come to rest is not merely a base for the fence; it is the sidewalk.  As a resident is quoted as saying: “you fear [cars] will brush against you.”  The narrowest-shouldered, slimmest individuals will be in danger – even when the vehicles are not suffering from violent mood swings – if someone else comes along and they need to pass.

The decision to make the sidewalk so narrow was made by a civil servant implementing a policy, and that policy is to accept pedestrian deaths in order to keep the traffic flowing.  This is an extension of the policy to treat traffic in Hong Kong as a natural phenomenon beyond the control of mankind: though its course can be diverted here and there, its volume – which usually rises year after year – is no more manageable than the lava flows that ooze out of the ground in Hawaii and Iceland.

It is not a coincidence that the Transport and Housing Bureau responsible for this approach is the same part of government that thinks 400 square feet is sufficient for a family to live in and HK$69 billion is a sensible price for a 16-mile stretch of rail track.  It is not the only part of the bureaucracy heavily populated by psychopaths – the planning and lands function of the Development Bureau is stuffed with them – but its malevolence towards citizens has a higher profile.

Interestingly, these two bureaus are involved in a power struggle in Kennedy Road.  Transport officials naturally want to keep pedestrian numbers down through a high mortality rate caused by vehicles traveling at speed.  The planners, however, have a different agenda.  Their priority is to kill off a larger number of people more slowly through increasing air pollution.

To this end, they have authorized the construction of Hopewell Holdings’ famous mega-hotel just down the hill.  As (rather whiny) residents have pointed out, the structure will block airflow and create traffic gridlock; when the tower is built, people walking in the neighbourhood will be squeezing their way through almost-stationary vehicles crawling along at the speed of molten rock.  Thus the planners will come out on top and rot people’s lungs with suspended particulates over many years, while the transport officials will have no choice but to lose face and abandon their favoured ‘instant death’ solution.  Just another of those interdepartmental squabbles that make government so interesting.

In the first Member’s Motion (IV, 1) in Wednesday’s Legislative Council meeting, the Civic Party’s fragrant Audrey Eu Yuet-mee proposes that the assembly urge…

“…all electors in Hong Kong to actively participate in the forthcoming by-elections in the five geographical constituencies to peacefully quantify public opinion through voting, so as to achieve the social effect of a de facto referendum, and strive for the expeditious implementation of genuine universal suffrage and abolition of functional constituencies.”

The tautology “effect of a de facto” is presumably an attempt to make the characterization of the polls as a referendum as palatable as possible to folk who, loyally following the ill-advised example set by Beijing’s local officials, publicly declare the idea to be somehow a constitutional abomination or even act of treachery, albeit perfectly legal.  The use of the word ‘expeditious’ is an enormous, though totally expected, disappointment to those of us who have been waiting for the day when a Legco motion doesn’t feature the word (it appears twice, as a verb, in the following motion put forward by the Democratic Alliance of the Blah Blah of Hong Kong’s more-aromatic-than-fragrant Starry Lee).

The motion is a call for the people of the Big Lychee to register their discontent – and a desperate one.  From property developers to pollution to schools to poverty to traffic congestion to consumer rip-offs to overspending on infrastructure to underspending on health, there is so much to be angry about that it should be easy to rouse, say, 40% of electors to turn up in May and vote overwhelmingly for the pro-democrats.  The way things are looking, they will be lucky to get half that turnout, allowing pro-establishment figures to portray them, not unreasonably, as humiliated.

Much of the problem must be the pro-dems’ compulsive and self-indulgent focus on the abstraction that is political reform.  Maybe functional constituencies are a cause, or a symptom, or a symbol of what is wrong with Hong Kong, but after a quarter of a century, people are numbed to them and to wrangling over them. Much to the relief, no doubt, of the bureau-plutocracy that runs this city, the government’s opponents mostly chant structures and concepts rather than food, housing and hospitals.  The nearest to an uprising the motion might lead to is a walkout from Legco by the pro-government lawmakers.

At the opposite end of the spectrum, and indeed planet, we have the US Tea Party movement, the latest in a long line of grassroots backlashes against the federal government.  Like its predecessors (eg the Ross Perot fad), it is less representative than it thinks and will fizzle out.  It probably is, as House of Representatives Speaker Nancy Pelosi suggests, being hijacked by the Republicans (and partly engineered by vested interests, and partly aligned with the Democrats’ aims).  Most of all, some of its followers have mental health rather than political complaints.  It would be interesting to know what percentage of them believe:

• the US government was behind the 9-11 attacks;
• President Barack Obama was not born a US citizen and/or is a Muslim;
• the US government has plans to round up domestic opponents and put them in concentration camps and/or confiscate all private legally held firearms;
• the Bible is the literal truth and scientific explanations for the origins of the universe, the planet’s geology and different life forms are wrong; or
• the European Union is the Kingdom of the Antichrist foretold in the Books of Revelations and Daniel.

Click on Audrey to hear the Sensational Alex Harvey Band

Even given all this, there is a large group of decent, sane people out there who are genuinely furious about bank bailouts and bonuses, unemployment and evictions of homeowners, and scared by the apparent calamity and uncertainty around them.  Tea Partiers’ votes could affect the outcome of some elections later this year.

In Hong Kong, maybe it would be called the Yum Cha movement.  Or maybe it would be more historically resonant to see the local equivalent of the Boston Tea Party as Commissioner Lin Zexu’s defiance of colonial power in throwing British merchants’ opium into the sea at Humen in 1839.  (The comparison is faulty, but for the more Anglophile pro-dems he would be the ideal patriot-hero figurehead.)

It won’t happen, even if we caught a glimpse of it over the high-speed express rail project.  Partly, perhaps, because Hong Kong people are too docile, cynical, busy, splintered or self-centred, but mainly because the words needed to spark a fire aren’t there – just more endless droning on about universal suffrage.

Maybe we should call it the Dinner Party, in honour of Mao’s definition of what a revolution is not.

Not The South China Morning Post, the famously rude and crude satirical Hong Kong website and media franchise founded by Dr George Adams in 1995, is reborn yet again in the next stage of the great karmic cycle of consciousness.

This latest version is not to be confused with a blog, because blogs, whatever their easiness on the eye, are common and mostly stink.  Also, you wouldn’t find anything as vulgar as a blog on the website of Oxford Tutors, an up-and-coming educational service offering to teach the Big Lychee’s children all their favourite important academic subjects.  Blogs are stupid, but what ambitious parents can possibly look at NTSCMP, with features like Dog Pram of the Month, and not feel inspired to entrust their slightly slow kid’s supplementary schooling to its creator?

Catch it before it goes the way of its noble predecessors (see the first) in its long journey to cosmic enlightenment.

Perhaps the most profound utterance made by Financial Secretary John Tsang in yesterday’s budget speech was on that well-known cornerstone of our economy, the concrete-box industry:

“We don’t know what a ‘healthy’ property market is exactly, but we want one.  We don’t want property prices to go up, and we don’t want them to come down; we want everyone who has an interest in prices either rising or falling to get what they wish.”

Otherwise, to no-one’s great surprise, the Budget Speech was the mind-numbing, insipid same as ever.

• ‘One-off’ (for the fifth or whatever year in a row) handouts of waivers, rebates and subsidies in the form of modest party favours, so every little girl and boy gets something and goes home happy.  Does anyone even remember how to pay property rates?
• Hand-wringing over the poor state of the fiscal reserves, which are down to a mere 20 months’ government expenditure.  (Imagine keeping nearly two years’ salary stuffed under the mattress – and this is less than half of the total reserves.)  Heaven forbid our leaders do something insane like giving this money to its owners, or spending it on something that doesn’t cost HK$3 billion a kilometre.
• Some weird face-giving blather about developing service industries in Shenzhen’s Qinhai district.  (“The present consensus,” apparently, is that Shenzhen can pretend to develop a financial hub on its own, while Hong Kong will mumble about cooperation and partnership from time to time to shut them up and look good in case someone from Beijing passes through.)

The measures to cool the property market draw special attention, not because they are especially intelligent or likely to be very effective, but because the sight of this government even making a vague pretence at preventing housing from becoming less and less affordable is unprecedented.  One of the proposals is to increase stamp duty on property transactions of over HK$20 million from 3.75% to 4.25%.  When this idea was floated a week or two ago, the property cartel started bleating about how this would hurt the middle class (whose well-being, as we all know, is so dear to our tycoons’ hearts).  However, they soon went silent, as if someone had had a word with them and told them to shut up.  Rather than simply victimize vulnerable and hard-pressed members of the bourgeoisie trading up from, say, a HK$30 million to a HK$60 million apartment, the higher tax will also, probably, bite into the developers’ own profit margins – running at 40% or so in the case of a new project in, of all places, Western.

By coincidence, it was also reported yesterday that Sun Hung Kai Properties will probably launch its luxury Larvotto complex in the next few weeks.  This is the place in Ap Lei Chau with the ‘How well do you know ocean’ slogan that some curmudgeons resort to mocking.  The first units to go on sale will start at HK$60 million, or HK$25,000 a square foot.

It is unlikely that the extra few hundred grand in tax now payable on a HK$60 million place will make a difference.  Larvotto is being touted as the new Bel-Air – the lavish place at Cyberport – on account of its sea views and spacious apartments.  What the sales literature doesn’t mention, however, is that the area has a noise problem.  (I am indebted to Mr Webb for calling my attention to this.)

The Environmental Protection Department opposed a residential development on this site because the ‘steel boat repairing activities’ across the road create too much noise (see 348th Town Planning Board meeting from April 2007, Agenda Item 6, p 24).  The Town Planning Board (or at least those members who had not excused themselves because they had business links with Sun Hung Kai) took the developer’s side.  The boat work was unauthorized – which of course always makes the resulting noise more bearable – and no enforcement action seemed possible, owing somehow to fishermen.  Anyway, the developer had tried jolly hard to protect future residents from this nuisance, even building architectural vertical fins and installing non-openable windows.  So the Board let it through, even though the noise levels in Towers 1 to 3 will exceed the HK Planning Standards and Guidelines limits.  (I SAID THE NOISE LEVELS IN TOWERS 1 TO 3 WILL EXCEED THE HK PLANNING STANDARDS AND GUIDELINES LIMITS!!!)

As Mr Webb says, if and when the boatyards close, the waterfront will probably be redeveloped, so when Larvotto’s noise goes, the sea view goes too.

All yours for HK$25,000 a square foot.

A sneak preview, courtesy of a mole in the Post Office, of Hong Kong Post’s special new Year of the Tiger set of postage stamps celebrating ‘Greatest Living Famous Hong Kong Personalities’: