Hong Kong’s ‘Superman’ Li Ka-shing should expose how the local property market is rigged in favour of tycoons
Li should be leading a discussion on reforming policies governing the property market
Power. Either you have it. Want it. Or are afraid of losing it. As Li Ka-shing ages, he becomes more distant from the influence and nature of his power. Li, 87, is seen as a source of Hong Kong’s woes: the tyranny of out of control monopolism and business policies that are rapacious and far removed from sustainable practises. We pay far too much for his properties and groceries.
At a recent CK Hutchison press briefing Li said that the Hong Kong economy is experiencing some of its toughest moments in two decades with “property sales and retail sales [at times] worse than during the Sars epidemic in .”
This can’t be true as property prices haven’t fallen by half, stores aren’t empty and the streets don’t look like a medieval village during Black Death. Indeed, since 2003 Hong Kong residential property prices have skyrocketed by 340 per cent.
That Li doesn’t see a declining property market as a beneficial event for the economy is his very problem. He plays a significant role in exploitive land banking practises and arbitraging of government land policies. Back in the 80s and 90s, we naively called him “Superman” because every small town needs a local hero.
Now, an enlightened society has figured out that Li and his tycoon peers have ramped flat sales and prices. This has placed Hong Kong in an inflexible, point of no return position for redirecting its economy.
Rather than engage in the mythologizing of Li Ka-shing at every press conference, Hong Kong media ought to look at his countermyth. And nothing is more damaging to his image of being an international businessman than his malevolent role in the city’s property market.
According to the Urban Research Group of City University of Hong Kong, 76 per cent of Hong Kongers aged between 18 to 35 years are still residing with their parents despite an unemployment rate of just 3 per cent. That is that is twice the level found in the US, UK or France.
The territory is afflicted with the least affordable homes in the world, a notorious award it has held for years. Median prices last year were 19 times gross income, more than twice the proportion in the UK.
Attending a Cheung Kong flat sale presentation is like watching a Donald Trump infommercial. You aren’t sure if Cheung Kong executive director Justin Kwok Hung Chiu is smiling or laughing at buyers. Then you see they are selling flats where some rooms are no bigger than a single sized mattress. Private housing in Hong Kong is simply too vital to the well being of the economy to be totally left in the hands of private developers.
Instead, reporters childishly quiz Li about the global economy when better answers could be given by numerous economists. He patiently answers with predictable views. Or he replies cryptically to sensitive questions like Chauncey Gardiner (magnificently played by Peter Sellers) from the film “Being There.”
Cheung Kong and Hutchison profess to practise sustainability and corporate social responsibility and citizenship. Li should be leading a discussion on reforming policies governing the property market. It may be blasphemy, but it’s the right thing to do at his age.
Peter Guy is a financial writer and former international banker