You can’t find a better place in the world than Hong Kong for enjoying being rich and powerful.
The rich pays a salary tax rate which is capped at 15-17%, a rate among the lowest in the world. And they don’t need to pay tax on capital gains, including those from property investment and stock investment. A survey conducted late last year shows that Hong Kong’s millionaires had a fourfold- increase compared to a year before.
How could they get rich faster? Obviously by speculating on the property market (Hong Kong’s stock market has been relatively weak over the year compared to the US stock market). With Hong Kong’s property price rising to a crazy level, so is the wealth of the rich who have a surefire way of getting even much richer by simply investing in property. The government has no wish to contain the property market anyway, whose income depends on selling the land to property developers, and who has been criticized for colluding with business and mega tycoons.
Though I have got used to the news of collusion between government and business, this piece of news still shocks me. A private firm can pay the government HK$100 (less than US$15) A YEAR for leasing a prime site in Causeway Bay for a recreational club for its employees. The club boasts a mini-soccer pitch and a two-storey concrete structure containing a gym, restaurant, lounge and a barbecue site. And this exceptionally preferential treatment has been in place for 30 years! The firm PCCW is the city’s major telecom company, owned by Richard Li, the son of Hong Kong’s and Asia’s richest man Li Ka Shing.
In this context, you won’t be surprised to learn that Hong Kong’s Gini coefficient, used to measure a place’s wealth gap, is among the world’s worst. Hong Kong’s gap between the rich and the poor is the widest in 20 years, with the rich getting richer and the poor poorer, and the middle being hollowed out.
Hong Kong’s seemingly prosperous facade is shored up not only by the local rich, but more importantly by the rich from mainland China. In Mongkok and Tsim Sha Tsui, there are jewelry shops after jewlry shops. They are not there for the local, but for the rich tourists from mainland. Hong Kong’s luxury properties are snapped up by mainland investors too, pushing up the already sky high price even higher, spilling into the non-luxury property sector. In this city, you either be the rich to buy and invest in luxury properties, or be poor enough to move into subsidized public housing. If you are in the middle, you are in hell.