A recycling of elites in Hong Kong
At one time we used to complain about the dominance of local property tycoons in all sectors of the economy; they’ve now been replaced by their counterparts from the mainland
An idealist thinks you can replace a ruling elite with a more egalitarian rule. A cynic thinks you will always replace a ruling elite with another one just like it, or worse. The modern history of Hong Kong from colonial to Chinese rule pretty much proves the cynic right.
Or, if you are academically inclined, Karl Marx was wrong, but the Italian social theorist Vilfredo Pareto was right.
People nowadays fret about so-called red capital. But just five years ago when Leung Chun-ying unexpectedly won the chief executive election, we were still complaining about “property hegemony”, that is, the dominance of the leading local property tycoons, not just in real estate but across major sectors of the economy. Today, popular fear and anger against property hegemony has been redirected against mainland capital. We have been loudest against our tycoons when they are already in their twilight.
They are increasingly being marginalised by Beijing and eclipsed by red capital. Once considered indispensable to the successful post-handover transition of Hong Kong and its prosperity and stability, they have overplayed their hands and become more liabilities than assets.
The numbers say it all. Mainland developers are outbidding local ones. Half of all land sales so far this year have already gone to mainland entities. For the whole of last year, it was 30 per cent. In 2009, it was less than 6 per cent.
Meanwhile, our equities market has become more mainland than local. More than one in two listed companies in Hong Kong are from the mainland, accounting for 63 per cent of the market’s total capitalisation.
The peak influence of the local tycoons coincided with the political tenure of Tung Chee-hwa and Donald Tsang Yam-kuen. Both our first and second chief executives were given a much freer hand to run the government. With Leung, Beijing’s emissaries in Hong Kong have played a much more active role.
So for a brief period, a Hong Kong ruling elite really did run Hong Kong like a gravy train, a time of worsening inequalities and other social indicators, whose adverse outcomes we are seeing today.
From the ruling elite of British hongs like Swire, Jardine Matheson and HSBC, through the local property tycoons to the ascent of red capital – Pareto would have been pleased about how accurate his theory has been about the recycling of elites when applied to Hong Kong.