Monitor | Why the HKMA should fret over consumer debt
The coming housing crisis in the city after the Fed raises US interest rates is going to plunge many Hongkongers into negative equity
Only last week my esteemed colleague Jake van der Kamp was complaining that there is altogether too much consensus among the Business Post's columnists. Commentators are not meant to be a harmonious society.
Well, Jake, you've got your wish for a healthy dose of adversarial scrappiness, because today the back page is going to pick a fight with the front page.
In his column today, Jake pours a bucket of cold water over the boss of the Hong Kong Monetary Authority, Norman Chan Tak-lam, who warned last week that Hongkongers were in danger of trying to live beyond their means.
Among other things, Chan is worried that private consumption is growing faster than incomes, and that the city's level of household debt is rising, climbing to 61 per cent of Hong Kong's gross domestic product.
Jake takes issue with this warning, pointing out that debt is a stock measure while GDP measures flow. Over recent years, he points out, household debts have actually declined as a proportion of total loans.
I am not so sure he should dismiss the debt-to-GDP measure so lightly. After all, the ratio of a country's household debts to its national income clearly affects its people's ability to service those debts.