Time and patience needed to heal HK

Business | Andrew Wong 2 Sep 2019

The current situation in Hong Kong is worrying but it appears that the unrest cannot be resolved quickly because this crisis did not build up in a single day and any "remediation" may only exacerbate the problems that have piled up over the years in Hong Kong since the 1997 handover.

So what are the problems that have accumulated in Hong Kong?

We are all familiar with the problems of sky-high property prices and the difficulty of young people to find a way out as well as the low level of happiness in the city.

But will solving these issues resolve all of Hong Kong's problems?

Or should Hong Kong be like Macau and distribute generous annual handouts of up to 10,000 patacas (HK$9,710) to every citizen to keep them happy, and their grievances at bay?

Although Hong Kong and Macao are only an hour's drive away from each other, there are huge cultural differences between the two special administrative regions.

Therefore, Macao's ways of appeasing its residents may not be suitable for Hong Kong.

Similarly, many of the problems arising from the return of Hong Kong to China were due to cultural differences as Hong Kong is deeply rooted in Western culture, having been a British colony for 99 years.

Also, Hong Kong evolved as an international city that's a fusion of the east and west, but at the same time we also can't ignore that there was a mix of good as well as bad in this melting pot of oriental and western cultures.

So if you want to inject Chinese characteristics fully into Hong Kong - which has been back into China's fold for just 22 years - it is going to be very difficult and any resistance to this effort would be quite natural.

Call it a coincidence or just bad luck but there was a rapid increase in the outpouring of dissatisfaction during the early years after the handover, when the city was hit by the Asian financial crisis in 1997 and then by the SARS epidemic in 2003.

Of course the central and Hong Kong government launched the Exit-Entry Permit for Travelling to and from Hong Kong and Macao - known as the EEP - and The Capital Investment Entrant Scheme, and Hong Kong's economy rebounded sharply.

However, the large number of mainlanders - either immigrants or tourists - coming to Hong Kong eventually caused friction and led to resentment among locals, due to ignorance over cultural differences, and this resentment did not abate even though Hong Kong's economy prospered.

Rising property prices and an influx of immigrants meant that young Hongkongers faced increased competition in society, and that boosted their levels of resentment.

Mainland citizens and officials as well as the central committee of the communist party perhaps find it hard to understand why Hongkongers are still not happy, as we no longer need to pay taxes to the central government, which has been promoting policies to support Hong Kong.

However, when housing prices in the city are more or less driven up by factors such as investment from immigrants, it makes it difficult for Hongkongers to buy homes.

And when some financial institutions believe that one's family background, assets or network is more important than credentials, fresh graduates who have studied hard since their childhood end up losing out on their dream job. For many in Hong Kong, the economy does not necessarily provide the right opportunities.

Plus, Hong Kong is an international city and it's not just its citizens who have points of view as there are other stakeholders too. And there are several organizations, people from different countries and international cities - each having different opinions which serve their own interests, which they will voice out, or act on.

Hong Kong's problems are more complex other places and it will take a lot of patience to resolve this crisis as one needs to consider the many aspects and reasons behind the unrest.

The central government has this far been very calm and restrained and we hope that the People's Liberation Army will not be bought in, nor will a state of an emergency be declared.

After all, it's only been 22 years since Hong Kong was handed back to China and there's still plenty of time to sort things out.

Andrew Wong is chairman and CEO of Anli Securities

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