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Cheung Kong Holdings

Hutchison Whampoa, one of Hong Kong’s largest listed companies, is controlled by  Cheung Kong Group, a property company. Hutchison's operations span ports, property and hotels, retailing, power generation and telecommunications. It owns Cheung Kong Infrastructure, and  is headed by Li Ka-shing, Asia’s wealthiest man. 

The demonisation of a property developer

PUBLISHED : Tuesday, 16 November, 2010, 12:00am
UPDATED : Tuesday, 16 November, 2010, 12:00am

'I had young people asking me: God created the earth for all mankind. Why can people not even own their own place in Hong Kong? The earth is for people to toil - but why is there no chance for honest people to get a job?'

Father Thomas Law Kwok-fai,

SCMP, November 14

Let's get some facts straight, Father Law. Leaving alone your beliefs about why God created the earth, your beliefs on property ownership in Hong Kong are wrong. It is actually possible for people to own their own homes here.

I can't give you an exact percentage figure for how many households do so but it is, admittedly, likely to be a little lower than in some other wealthy economies.

It is so because a third of our people live in public rental housing at rents of little more than HK$1,000 a month, not even enough to cover the Housing Authority's upkeep of their homes. This is possibly the cheapest urban accommodation on earth. These people can obviously not expect to buy at such prices but we do have another 15 per cent of the population living in homes they bought at hugely subsidised prices.

So before badmouthing your home town, Father Law, you might want to recognise that it has actually done a very good job of building homes for its people.

And as to your thoughts on joblessness, our unemployment rate is currently 4.2 per cent. This is not bad at all. In fact it is very good by standards elsewhere. Do you wish to tell us that only 4.2 per cent of Hong Kong's working people are honest and that employers all prefer dishonest employees? Interesting theory, I must say.

I concede, however, that the high price of housing in Hong Kong does indeed stop many people from owning their own homes. It is not a new phenomenon but it is severe at the moment.

Why is it so? How did it come about? What can we do about it?

I spent 20 years in the investment business as a research analyst, puzzling out these questions, and they have continued to absorb me as a financial columnist ever since. What accounts for price bubbles? How can society deal with them so that, even if naturally occurring, they are not unnecessarily emphasised? What is a proper price for housing?

I don't have the answers to these questions although I think a career-long absorption with them has given me some ideas of where the answers may lie. I shall tell you if I find them.

But perhaps I don't need to. Father Law has found them for me, all wrapped up in one single answer. That answer is developer Li Ka-shing. He is the one to blame. It's his fault, oh yes, and that of some people like him. They are actually like the devil.

It makes me regret that I disappointed my parents by turning apostate when they had me fingered as the preacher in the family. If only I had gone to theological seminary I too would have been set on the right path for a complete understanding of economics and finance. It's so simple. Li Ka-shing done it.

What an amazing discovery. We have a Hong Kong certainty for the next Nobel Prize in Economics. Step up, Father Thomas Law.

And having answered the question of why property prices are so high, do tell us what we can do about it. Shall we throw Li Ka-shing into jail? Shall we compulsorily dissolve Cheung Kong Holdings? Shall we criminalise all property development? Shall we pass a law saying that the lowest bid, not the highest, gets the building site at the next land auction?

Your flock has grown to 7 million people, Father Law. Bestow on us your wisdom. You have told us that people cannot even own their own place in Hong Kong. Now tell us how to set this straight.

And I have one further question for those of your superiors who thought your 'devil' jibe at Mr Li was just a joke, ha-ha.

If a prominent Italian citizen were to say to reporters on the steps of the Vatican that the Pope is a silly old fool, a much less injurious insult than 'devil', can you really see the members of the Curia holding their bellies with laughter - 'Ha-ha, what a good joke. We like jokes, ho-ho-ho.'

No, I thought as much. Yet all we have from the Catholic church in Hong Kong is a statement of 'regret', no retraction or apology, and reportedly only after receiving a promise that Mr Li will continue to make donations to the church. Meanwhile Father Law rants at even this mealy-mouthed concession. But Mr Li keeps his cool.

I know who lives closer to the precepts of the good book in this incident.

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