Land and the Ruling Class in Hong Kong

Gary Watson is a former lecturer in Chinese studies at Queen’s University and is now a multimedia developer in Mississauga.

“Oligopoly pays.” That’s the chief lesson emerging from Alice
Poon’s excellent survey of Hong Kong’s real estate and
infrastructure economies. Although Hong Kong is often characterized as
one of the world’s freest economies, it is in fact controlled by a
handful of wealthy individuals and companies who stifle—rather than
encourage—competition.

Poon dissects the sinews of Hong Kong “big money” and isolates its
key components, those being legislative and legal sway over land and
competitive policies. Hong Kong’s biggest fortunes owe their growth
and security to dominance over a wide spectrum of businesses ranging
from transport, public utilities, supermarkets, and food distribution
to, most importantly, land development. Huge amounts of real estate are
developed by a handful of large companies who control all aspects of
supply, construction, and property management. Indeed, the usual
hallmarks of classically defined competitive markets are nearly absent;
instead, Hong Kong’s market structure suffers from steep barriers to
entry and government policies that serve to bolster the market positions
of a half dozen huge conglomerates.

The situation of near-anarchy for Hong Kong’s corporate heavyweights
may make for impressive annual reports but does little to relieve Hong
Kong’s mounting social and economic tensions. Poon carefully details
how government “of the rich, by the rich, for the rich” in Hong Kong
has damaged civil norms and deprived its population of economic security
and well-being. Not surprisingly, articulate protest groups have lodged
forceful criticism of “business as usual” and gained widespread
support, proving that discontent is deep-seated and justified.

Poon’s concise, well-argued analysis is one of the few available
English-language sources on Hong Kong’s predicament. While Hong
Kong’s once-vigorous and argumentative press has lost its teeth
following the takeover, new outlets such as blogs have assumed huge
importance as a barricade for free expression and democratic principles.
With Shanghai rapidly eclipsing Hong Kong as the banking and finance
powerhouse for China’s breakneck growth, there’s a chance that
competition may in fact re-emerge and make for the kind of “popular”
entrepreneurship long absent in Hong Kong.