Hong Kong, China
It took less than 30 minutes, at the dinner hour, to zip through Chek Lap Kok Airport immigration, grab our bags and board the A21 double decker bus (US$4 for the 40 minute trip) to Tsim Sha Tsui. Deplaning 525 passengers from our Emirates Airlines Airbus 380 took longer.
Hong Kong is built for speed. This city-country that never sleeps is still the King of Capitalism. Scrambling out of the bus before the driver hit the fuel pedal, into the blinding retail lights, America felt so last century to me.
In the 24 years since my last visit — when landing at Kai Tak airport was a white-knuckler because the runway jutted into Victoria Harbour and pilots made a hard right turn before landing — Hong Kong has been transformed.
Back then, the main HSBC building (Hong Kong Shanghai Banking Corporation) in the Central district was the architectural jewel, the most expensive building in the world, costing US$670 million. Today the 44-floor building is a dwarf. Its neighbour soars 105 stories.
The closer we got to Tsim Sha Tsui in Kowloon, across the harbour from Hong Kong Island, the pace quickened, the street scene began to almost throb. Nathan Road seemed engulfed in a party. And we arrived on a Wednesday night.
The core of Hong Kong’s emergence as a great city is its transit system, anchored by the MTR. Hong Kong is three parts. The island is a steep rock with treacherous winding roads reminiscent of Italy’s Adriatic coast. Victoria Harbour, an economic system on its own, separates the Island from Kowloon. And Kowloon on the Mainland side, an hour from the Chinese border, is the suburbs, if Hong Kong is the city. Seven million hustling people in about a quarter of its 426 square miles.
Transit connects these three pieces. It’s the foundation of Hong Kong’s growth. A 20-something friend commented, “Hong Kong is to New York as New York is to Texas.” New Yorkers will hate this, but New York feels slow compared to Hong Kong. Yet New York City has a million more people.
The Hong Kong’s subway is a marvel of efficiency. In Hong Kong a visitor knowing nothing moves easily. One of its innovations is to mark each individual exit/entrance with a letter, A, B, C etc. So what, eh? But it is a big deal in keeping people moving.
We were meeting friends at the Foreign Correspondents Club. “Take the Tsuen Wan Line to Central Station and exit at the G exit,” we were told. In New York, the labyrinth of exits from the subway is a nightmare.
Hong Kong has the Octopus card, like the Oyster card in London and the Rabbit card in Bangkok. The stored value card is a touch card and works on every piece of the transit system, the subway, the tramway, the buses and the Star Ferry. And the grocery store. We bought water at Stanley Market and our friend walked through the checkout, touched his card and paid before I had my wallet in hand.
In New York, they are light years BEHIND this system. The Metro Transit Authority chief who was a proponent of the stored-value-touch-card was poached by Hong Kong and now the touch card languishes on the back burner. Instead of efficiency-for-the dollar, the MTA is adding a $1 tax to MetroCards. These cards are easily crinkled and lost and replacement will be a tax boom.
Since the island is a steep rock, it devised a unique solution to climbing its terrain, dominated by stairs, avoiding more vehicles. The Mid-Level Escalator, a series of escalators and moving sidewalks, was born in 1993, about a half a mile, rising about 500 feet, from top to bottom. It is the longest outdoor covered escalator in the world, carrying 55,000 people a day, twice the forecast. In the morning patrons ride down to Central, the rent of the day, the escalator goes up bringing people and development to sleepy neighborhoods. Initially branded a white elephant, three more are in the works.
During my 1989 visit, I explored an outlying district called Mong Kok, 30 minutes by subway from Central where I was a rare site, a female gweilo (officially a foreigner, but really a derogatory Cantonese term akin to knuckle-dragging, butter-stinking, whitey) that the restaurant where I stopped tried to avoid seating me because they didn’t have an English menu. I persisted.
My journalist buddy from Vancouver, Wyng Chow, now a Hong Konger and a Governor of the Foreign Correspondents Club, taught me how to order dim sum in Cantonese. I sat down and motioned for the menu, perused it, not understanding a single character, and ordered. My last request, I smiled and said “fai gee.” Chopsticks. I could tell, the waiter’s face devoid of emotion or interest, that he was impressed.
Mong Kok today throbs with people, as busy as Central — there is an exodus of residents from the Island to Kowloon — Nathan Road is three lanes of traffic each way, huge buildings line the street with retail shops, including the ubiquitous Chow Tai Fook, a publicly traded jewelry company, which without exaggeration, has an outlet on each block. Every outlet we walked by had customers inside, lots of them.
Hong Kong is home to the most expensive commercial real estate on the planet, on Russell Street, in Causeway Bay, where there is a Cartier and Rolex on adjacent blocks. Western brands want positioning to sell to the Chinese.
And the world has discovered there’s money in those newly opened consumer wallets from China. In a very small price checking sample, three items, jewelry and shoes, international brands, were cheaper in New York with the 8.875% sales tax than in Hong Kong with no sales tax. Is that an indication of the change in buying power?
“Mainlanders,” the Hong Kongers grunt of new retail customers. “The new (Chinese) millionaires are buying up everything.”
When they say everything they mean everything. During our visit the Hong Kong government put a limit on the number of tins of baby formula that can be exported, meaning taken inside one’s luggage back to China. Two cans per person.
“Everything in China is fake,” we were told. “The Chinese don’t trust any of their own products. “ So they are stripping the shelves of formula leaving Hong Kong mother’s with no supply forcing the government to step in. But there’s another issue in this “parallel trading.” Goods in Hong Kong are purchased tax free and resold at a profit in China.
In one generation, the majority of Hong Kongers have moved up the economic ladder to Middle Class. Census Data from 2011 say the 60% in the middle make between US$1,600 to US$6,400 a month. A starting journalist is at the bottom of the middle class ladder, a school principle or bank manager at the top.
The Hong Kong middle class have become more like American middle class in the last decade, in that they too, after a surge up the ladder, are dropping back.
Take a security guard at one of the 60 story apartment towers in Kowloon. He makes about US$1,000 a month. If his wife makes the same in a service industry job and they live in the tower where he works in a 600 square foot apartment with two children, most of their income goes to the US$1,600 a month rent.Half the population lives in public housing. Rent is expensive, fueled by a system that favors insiders, the property developers, by keeping supply tight. Living in 150 square feet is not unusual, families of four cram into 600 square feet.
Helping make life tolerable, food is affordable, $1 for a giant steamed pork bun on the street, $10 for a whole BBQ chicken in a restaurant, transit is reasonable, 32-cents US to cross the harbour on the Star Ferry and $3.50 for the longest subway ride, and there’s lots of cheap stuff from China.
In 2000 defined benefit pension plans were eliminated for the public service throwing them into the same system Americans and Canadians have, managing their own retirement with contribution plans, such as IRAs, 401(k)s or RSPs. And largely failing because it’s the money men who are getting richer skimming huge fees off of our retirement investments regardless of the state of the stock market.
Curbing the financial exuberance continues to be a problem in Hong Kong and China. Residential prices have risen 120% since 2008. To cool the market the government imposed a 15% tax on residential property purchased by foreigners, the Mainland Chinese. Then it raised taxes on commercial property transactions and tightened mortgage requirements. Interest rates are virtually zero in Hong Kong, as Americans have discovered, that lays the ground work for a real estate bubble.
We departed with no luxury goods returning to our world where drivers worry about finding safe, sanitary parking to take our required-by-law 10 hour break and the unintended consequences that await us when the misguided, unsafe, changes to the Hours of Service rules begin July 1.
Much more on these topics, very soon.