Wrong side of the boundary

Hong Kong people are famously long suffering and impressively tolerant of poor government, but there is a limit. They will even, reluctantly, accept blatant collusion between the administration and the powerful tycoons who dominate the economy. But when this favouritism directly challenges the property rights of individual citizens, the administration has crossed the line, placing its entire credibility in question.

Most citizens have the bulk of their assets invested in property, and those who cannot afford to buy property ardently desire to do so. Thus, the rights of property ownership lie at the very heart of popular concerns. This was never more clearly demonstrated than when Britain decided to embark on negotiations that led to the resumption of Chinese rule. It did so because of fears over the validity of New Territories property leases after 1997.

This is the background to the passing of a bill in the Legislative Council on Wednesday that lowers, from 90 to 80 per cent, the percentage of building owners whose consent is needed to allow developers to acquire older buildings for redevelopment. Once this majority has given consent, compulsory purchase orders come into force.

There is not a scintilla of doubt as to who will benefit the most from this change in the law. The major property developers, a group synonymous with Hong Kong's most powerful tycoons, must have cracked open the champagne. They have long grown impatient with being thwarted by small property owners and having to go to the trouble of setting up front companies to acquire properties in buildings they have targeted for redevelopment. There is a valid argument for the compulsory purchase of old properties in the interests of overall development needs. But it would only ring true if the government had been prepared to tolerate amendments put forward by a number of legislators to provide better protection for the property rights of those affected. Instead, a couple of non-statutory promises were offered.

This administration does not acknowledge the legislature's right to amend its proposals; it believes it has a monopoly of wisdom over policy matters.

This places government-supporting legislators - outside the rotten boroughs of the functional constituencies (who need not face the public at election time) - in an acutely difficult position. Government loyalists in the Democratic Alliance for the Betterment and Progress of Hong Kong and the Federation of Trade Unions had a real problem: their masters in Beijing insist they must support the administration even though they know full well that doing so in this instance challenges their claim to be the voice of the grass roots.

Adding novel complexity to this conundrum is Carrie Lam Cheng Yuet-ngor, the secretary for development, who justified the government's intransigence by arguing that a majority of the public supported the law. She did not explain how this 'support' had been measured nor why, in some instances, so-called majority opinion matters while, in others, it does not. The fact that legislator Regina Ip Lau Suk-yee, who has sharp opportunistic instincts, campaigned so vigorously against this law provides a good indication of where the majority opinion really lies.

Most people in Hong Kong do not own properties in older buildings, but they completely understand their vulnerability in the face of a government so ready to grant the tycoons' wishes at their expense. So it defies belief that a majority could possibly support this measure.

Moreover - and it would be hard to make this up in a work of fiction - the new compulsory purchase law came just days after a failed government attempt to punish another group of ordinary citizens for doing what property tycoons do all the time. The Court of Appeal overturned the convictions of 17 food stall owners who had been sentenced for alleged collusion by agreeing not to bid against each other at a stall auction.

Collusion at government property sales, involving much bigger sums of money and far more powerful people, has never led to government prosecutions, yet it is common knowledge that, at these auctions, the big developers get together and share out the deals between themselves. Fortunately, rule of law still prevails and, in the higher courts at least, everyone becomes equal before the law despite the government's resolute determination to favour the powerful.

There is always a tipping point at which arrogant governments go too far and start revealing their true face - one that the people can no longer tolerate. In Hong Kong, trampling over property rights is clearly a step too far. The government probably wandered into this minefield without thinking through its consequences because appeasing tycoons comes as second nature. But they should know that minefields are dangerous places, triggering explosions that can prove fatal.

Stephen Vines is a Hong Kong-based journalist and entrepreneur