Jake's View
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Why don’t we convert prime waterfront land at Hong Kong’s shrinking port into housing?

Hong Kong has three square kilometres of prime waterfront land available for housing, all with superb roads built in, if only we recognise that our city’s port is hanging on by the barest of policy threads.

PUBLISHED : Monday, 20 November, 2017, 3:44pm
UPDATED : Monday, 20 November, 2017, 11:08pm

Would you live in a flat in Hong Kong with panoramic sea views, but have your home built on an 80-metre podium above one of the world’s busiest container terminals? - SCMP, November 17

No, of course you wouldn’t, which is, of course, exactly the answer that the Task Force on Land and Supply wishes you to give, when it asks you that question in a consultation scheduled for next March.

To the task force’s way of thinking, the container port is an absolutely integral part of Hong Kong’s economy. If we therefore wish to build housing on the site, then we will either have to build it over the port facilities or move the port, which would be very troublesome and costly, and we don’t want that.

Thus, says the task force without quite saying it, tell us to put a big X on this deal of housing at the container port.

But what if the future does not give us much prospect of a continued big international container port?

The question is a good one, because the port’s future hangs by the thin thread of one outdated policy rule that Beijing has under review.

This rule is called cabotage, and it forbids foreign shipping lines from carrying cargo between any two domestic ports in China. Hong Kong does not count as part of China for this purpose, and thus transshipment in Hong Kong gets foreign carriers around the restriction.

All the big shipping lines have made it clear to our government that they would take their China shipping business to mainland ports if cabotage rules were abolished. The mainland Chinese ports are much cheaper, and more convenient than ours is. They would be happy to see cabotage rules gone and they have the ear of Beijing.

At stake here is outward transshipment comprising 80 per cent of the export tonnage throughput of Hong Kong. Lose it and our port loses its critical mass and would rapidly become just a few berths for local container traffic, assuming we don’t find out that it isn’t easier to rely on mainland ports for this.

It is not as if our container terminal operators really care. The biggest one of them is controlled by developer Li Ka-shing, who has made it his life’s business to turn port facilities in Hong Kong into housing projects.

This would be his biggest one ever, and the port business he loses here would be gained through the stakes he holds in ports across the border.

Let’s be plain about this. Hong Kong is a parasite economy that thrives by doing for its China host what this host cannot, or for political reasons, chooses not to do itself. Once China does it, Hong Kong must move on to something else. The container port is a classic example.

Bear in mind also, that we are talking about more than three square kilometres of land area once the berths are filled in, all of it prime waterfront property superbly served with transport links.

How much housing we build on it depends on how dense we want that housing to be, but there is no doubt the plurals in hundreds of thousands of homes, particularly when we take into account the backup yards and moribund road links in the New Territories.

Read: China’s easing of cabotage rule deals serious blow to Hong Kong port industry, say experts

Imagine it, those big tilting heaps of rusting containers laced with mikania vines, which litter good land all over the New Territories, cleaned out at last.

What do we lose? I expect that this hidebound task force will try to tell us that the economic contribution of the port is anything up to 25 per cent of gross domestic product (GDP).

If so claimed, someone will have to do a good job of hiding a 2014 report by consultants BMT Asia Pacific, which put the contribution of the port sector at only 1.4 per cent of GDP.

The rest is just bluster and bafflegab of the sort advanced by civil servants when trying to justify a dubious project. It consists of industries that we would keep anyway and of pretending that anything under consideration is worth five times its stated value, because money earned there is spent elsewhere, as if this were not true of every economic activity.

The 80-metre podium suggestion is just more of this sort of bluster. There will be no port business underneath.

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