The contrast between Hong Kong and Shenzhen could not be starker than in their respective plans for subsidized, or social, housing. While Shenzhen is targeting a surge over the coming two years, putting as many as 300,000 units on the market, Hong Kong has announced it will likely be able to build no more than 13,400 units in the current year, well down from its initial target of just 18,000 for the fiscal period ending in March.
Shenzhen plans to sell 600,000 new homes between now and 2022, of which
rental units will be no less than 300,000, it was announced this week. This is
part of the city’s bigger urban development plan, unveiled in August last year, which will see
1.7 million new houses built by 2035, with more than 1 million being subsidized.
Continue reading Tale of two cities’ housing markets
The eagerly awaited “Insurance Connect” scheme remains on hold, with no indication of when it might be launched. However, Hong Kong’s Insurance Authority (IA) and the central government’s China Banking and Insurance Regulatory Commission (CBIRC) are inching forward with cross-border initiatives to spur integration within the Greater Bay Area.
This was made apparent by comments from senior officials and executives at recent forums, in Hong Kong and Shenzhen. Most prominent of these were speeches given by IA chairman Moses Cheng Mo-chi and CBIRC Chief Counsel Liu Fushou.
Speaking at the Asian Insurance Forum in Hong Kong on December 10, Liu said that the key would be to establish regional regulatory mechanisms for insurance institutions to operate across the GBA. “Our next step is to facilitate the set-up of insurance institutions in the GBA through various approaches, particularly to help those with the expertise and features suited for GBA development.”
Continue reading ‘Insurance Connect’ delays; GBA integration goes on
It is becoming clearer that something has shifted in Beijing’s approach to governing Hong Kong. We pointed out the beginnings of this shift last week, after CE Carrie Lam’s visit to Shanghai and Beijing, where she met President Xi Jinping and her direct report, Vice Premier Han Zheng. She came back more confident, less inclined to give middle-ground statements on the protests. We speculated that it was because the central government had reached a new consensus on Hong Kong, and a change of direction was needed: restrained passive-aggressive interventionism was out; active, overt policy guidance was in.
until late yesterday, it hadn’t seemed like the new approach was being timed on
a stopwatch. The central government was upping the pressure to introduce national-security
legislation, but no deadline had been hinted at.
President Xi Jinping interrupted a busy schedule on his overseas trip to comment
on the situation in Hong Kong. He reiterated that he wants to see the Hong Kong
government and police do whatever is necessary to put an end to the protests. It
was no longer just the Hong Kong government’s most important task; it was now its
most “urgent,” too.
Continue reading Try harder, Xi tells Hong Kong govt
As mainland students flee Hong Kong’s embattled university campuses for the safety of neighboring Shenzhen, a spotlight is being shone on the relationship between the Hong Kong universities and their affiliates across the border.
Fearing that they could become targets of the
anti-government protesters who have turned their campus into a battlefield, mainland
students staying at the Chinese University of Hong Kong in Sha Tin have found themselves among the more
fortunate, as the university has a Shenzhen campus that opened its doors to
them from late yesterday.
Continue reading Mainland students flee to Shenzhen, some to campuses
For those who care to look, the Hong Kong protests are exposing flaws in many assumptions about Hong Kong’s competitiveness. This is not only a short-term concern, either. As revenues come under pressure, partly due to the protests, partly due to a slowing Chinese economy, operating costs are inevitably being looked at more carefully by companies based in “Asia’s World City”. It would be surprising if only a few were considering moving or scaling back their operations here.
The question is: Can other cities in the Greater
Bay Area offer compelling alternatives?
The short answer would be: Yes. But do some
Continue reading Hong Kong as regional HQ: time to move?
We ended our weekend analysis of the situation in
Hong Kong by urging readers to remain calm and look ahead to see how a change
of approach by Beijing might play out in the coming weeks and months. We didn’t
have to wait long to see this advice put sorely to the test. It would have
taken a deeply rooted stoicism to remain calm in the midst of Hong Kong’s
newsflow today. Another shooting by police, a man set on fire, university
campuses in chaos, and teargas and stormtroopers in Central: such scenes were
surely enough to have sent anyone running for the exits. SCMP has it all.
We never said that Hong Kong’s situation was likely to get better
anytime soon. On the contrary, it has seemed evident for some time that what is
playing out now is still the prelude to a long, drawn-out conflict that will
get significantly worse before it gets better. It would be right and proper to
hope for peace to prevail as soon as possible, but it would be wise to plan for
worse to come.
Continue reading In Hong Kong, end slips further out of sight
Fintech Week is proving to be a global PR bonanza for Hong Kong. Local media have been buzzing for the past two days about Alipay’s decision to open its payment platform inside the Chinese mainland to foreigners, the announcement of which was clearly timed to coincide with the Hong Kong event. And Mu Changchun, the central bank’s whizzkid overseeing the imminent launch of the digital Renminbi, kept the momentum going yesterday by suggesting foreigners could use it, too.
As reported by SCMP, Mu said the central bank is working to
separate the virtual currency from the banking system. “Actually it could be
decoupled from traditional bank accounts,” he said during an event at Fintech
Week, which is being held at the AsiaWorld-Expo. “Thus, those who don’t have
bank accounts in China can still open a digital wallet and enjoy mobile payment
services in China.”
Continue reading Visitors get a taste of Chinese online payments
Carrie Lam, Hong Kong’s chief executive, has received a bag of 16 goodies from her bosses in Beijing related to Hong Kong’s role within the Greater Bay Area. And the city’s role, in case anyone was wondering, is “completely unchanged”, she says.
shiniest of these gifts from the central government is a complete relaxation on
restrictions for Hong Kong residents to buy apartments in the nine Guangdong
cities of the GBA.
Continue reading Hong Kong’s role in GBA: keep calm and carry on
Savills has released
a report on the Greater Bay Area’s office market that shows supply is
increasing at a fast pace, pushing up vacancy rates.
While Hong Kong,
Shenzhen and Guangzhou remain in strong demand compared to the rest, even they
are seeing rates that should be enough to keep landlords awake at night.
Continue reading Office vacancy rates rise in all GBA cities
It’s hard to see where Hong Kong is headed, now that the government has decided to invoke emergency powers to ban the use of face masks at protests. There are at least two evident certainties: that protesters will be energized, leading to a rise in violence levels; and that arrest numbers will climb. Beyond that, however, it remains to be seen whether the announcement will hasten a decision in Washington to restrict financial flows through Hong Kong or result in any other damage to the city’s economy caused by a loss of investor confidence.
Key to monitor is whether the decision can be effective in quelling the protests. This, too, is hard to guess at the moment. It will likely embolden the more radical protesters, and radicalize others who had previously been hesitant to commit acts of violence. Yet it will also likely result in violent protesters being taken out of action quicker, blunting the protests as their more charismatic leadership is neutralized. Whether this turns out to be net positive or negative will take time to ascertain.
In the meantime, and apologies if this sounds Cyclopian, but the Greater Bay Area is not likely to be able to chug along as normal and pretend that what’s happening in Hong Kong won’t affect the rest. Putting aside the damage inflicted on the region by plunging international tourism – especially business tourism – it is important to be realistic about the effects of the Hong Kong crisis on the pace and scope of reforms being implemented in the GBA.
Continue reading Bracing for a drop in Hong Kong