poor little rich things

LELIA Chow flashed a ring set with a large, sparkling, pale yellow stone. 'Beautiful. Yellow sapphire or cognac diamond?' I asked. 'Neither,' said Chow, laughing, 'It was $350 from the Lanes. My daughter thought it was pretty and wanted one, so I bought one too.' Chow, a former beauty queen turned occasional PR person and party-planner, is the ultimate Hong Kong shopping-savvy glamour girl. Her wardrobe is stuffed with the latest, pricey must-haves; she owns several Hermes Kelly bags (at about $10,000 a pop) and once bought five, expensive pashmina shawls in one day. She attends most of the fashion events in town, and is courted by retailers because at catwalk shows she sits with her exit sheet - a list of the descriptions and prices of garments - and quietly ticks away. Well, she used to.

Chow is one of the people the Hong Kong economy misses the most. The engine that has traditionally driven Hong Kong, fuelled by the SAR's gambling, shopping, travelling, constantly spending and most affluent citizens, has stalled. Newspapers are filled with stories about the real hardships facing the man in the street: job losses, business closures, savings that have all but evaporated, no social welfare. The rich, of course, have had a much softer landing. But they are also downsizing. All those material girls and boys are talking about a new, conservative sensibility. 'There is,' said one rags-to-riches-and-not-quite-rags-again businessman, 'much less showing off.' Conspicuous consumption, it seems, has finally gone out of fashion.

Decorum has replaced Dolce, price tags are actually being looked at, and even Hong Kong's biggest spenders are keeping their purses closed until the sales start. Gossip increasingly revolves around hard-core spendthrift tai-tais entering upmarket stores like Hermes and shamelessly bargaining for better prices on new merchandise. 'I have friends who have had to sell their Rolls-Royces and have moved out of their big homes to live in rented 1,000-square-foot apartments,' said Chow. 'Of course, they would never talk about it. It's a matter of face.' Chow, like many of her friends, was a savvy stock and property speculator during Hong Kong's boom times. Her husband, a restaurateur and property-owner, kept her in designer duds and a cushy lifestyle, but she harboured her own aspirations. She had made piles of easy money in lucrative property deals and used the money to fund her expensive habits: she and her friends would often spend more than $100,000 a month on designer clothes and 'real' jewellery.

But money isn't so easy any more. For the first time, she's sitting on a lame duck property investment (an apartment in Convention Plaza on which the monthly mortgage is $60,000 and the rent now just $20,000 a month). She has also taken losses on some of her other ventures, such as stock market investments.

So she has transformed her biggest asset - A-list contacts - into a one-woman PR business, organising events for clients like Concord Watches and a little-known beauty salon. 'We all have to do something new to bring in a bit more money,' said Chow. 'But really it's not so bad. I have had a humble upbringing so I know what it means to save. The way Hong Kong is now, just about everyone is being affected.' Certified public accountant and man-about-town Charles Yang is one of the lucky ones. In terms of earnings, his company has not been too adversely affected, nevertheless he has sharply cut down his once-flamboyant spending habits. 'Before, I might buy a suit I knew I could only wear once. Now, I won't do that. It seems wasteful,' he says. 'All around, people are losing their jobs or their businesses are suffering, so, naturally, you're not in the mood to spend. Nobody else is doing it.' That's certainly true of entrepreneur C.W. Chan. He used to think nothing of buying $10,000 Italian suits, and would regularly blow $5,000 on a Japanese dinner. Recently, though, he has found a Japanese restaurant in Wan Chai where it is possible to eat for less than $100 a head, and, for the first time in years, only buys on sale. When his clients want to eat seafood, he takes them to Sai Kung, where, he says, a feast is cheap. 'Before, if I liked something I would buy it without thinking about how much it was or if I really needed it or not,' says Chan. 'Now I wait. If it's full-price today, then soon it will be 20 per cent off, and in a few months at least 50 per cent off. The customer has become so spoiled, that even when things get better, everyone will still be expecting better prices.' Chan's is one of those enduring tales of a Hong Kong person of modest means making good. He was educated at the Hong Kong Polytechnic, and started working part-time while still at school, earning $500 a month. Then followed a series of low-paying positions, until he began working as a middleman in the field of employee medical schemes. In 1988, he set up a business providing medical programmes to large companies. He now employs 50 people, owns five luxury southside properties and, in true Hong Kong style, splits his drive-time between a BMW and a Mercedes-Benz. At 30, he bought his first property, a $1 million apartment.

Soon afterwards, he sold it for $1.5 million and with the profit bought a $6.1 million flat. A few years later, he was offered $17 million for it, but declined. Now, he thinks it is worth around $9 million. 'I was never a real speculator because I have this traditional Chinese thinking that property should be kept for the future,' he says. 'I don't know how long I will have my business, so I figure that with some properties which I can rent out, I can live decently. Now, they have become burdens. I want to get rid of them, but I can't.' In the past year, his assets - once valued at about $70 million - and his income have shrunk by about 50 per cent, and plans to take his company public have been shelved. He thinks he will take a further bashing this year. 'It doesn't look as if my life has changed,' he says. 'I still live in the same property and will keep my cars, but I feel burdened.' He is obviously not feeling burdened enough to completely curtail his spending habits. On the day we met, Chan had bought a couple of shirts and a smart Italian blazer, all heavily discounted, for $1,800. In the past, he would not have flinched at spending that on one shirt. 'In my circle, my friends always used to show off, talking about new jewellery, clothes and cars. Now they talk about sad things, they talk about when it will all come back. Even those who are less affected than others by the economic downturn say that it has simply become unfashionable to spend,' says Chan.