While much of the world worries about economic recession, Hong Kong’s fiscal situation is one to envy. The former British colony, which reverted to China’s control in 1997, remains a booming port of capitalism. Second quarter GDP growth this year was just below 10 percent. Unemployment is under 3.5 percent. There is so much money in the government coffers that next month, it will begin giving some it away. All 6.1 million adult permanent residents are to receive 6,000 Hong Kong dollars (about $700 U.S.). But not all of the prospective recipients are rejoicing.
These are some of the Hong Kong residents most in need of extra cash. Unable to afford soaring rents amid a shortage of public housing, they live in illegal units atop a ramshackle industrial building from which they face eviction by the government.
Lee Oi Lin is a former caretaker, now unable to work because of injuries. She lives with a dog and a cat in an illegally-subdivided unit, a space the size of a closet, barely 4.5 square meters.
“There’s so much talk in this building about moving to a nicer place. But 6,000 (Hong Kong) dollars is not enough. To rent a place, you need two months down payment and one month’s deposit plus the agent’s fee, so it is four months rent up front to move into a decent place. Here there is no down payment, deposit and all that. We just pay 1,500 dollars and that is all. If I use my 6,000 dollars to rent, then I will not have enough money to eat,” he said.
The 6,000 Hong Kong dollars ($700 U.S.) giveaway was announced earlier this year by Hong Kong’s Chief Executive, Donald Tsang. He has followed that now with a revival of a program for subsidized home ownership for low and middle income earners. “We are not optimistic about global economic prospects next year. We may see inflation and recession come one after the other. In response to this, we will implement short-term measures to ease the burden on the grassroots,” he said.
While the scheme is aimed at addressing the housing shortage and high rents, critics say the subsidies and handouts are unlikely to reverse the declining popularity of Tsang’s administration.
Among such skeptics is the leader of the opposition Civic Party, lawyer and lawmaker Alan Leong. “To his disappointment and dismay his popularity has not gone up as a result of this cash handout. And this, I think, is explained by the frustration being felt by Hong Kong people that this administration is not doing things for the long-term good of Hong Kong,” he said.
Some critics are predicting that the cash handouts could further fuel Hong Kong’s inflation which has surged to its fastest pace in 15 years. “But the government has come up with this idea that if you decide to collect the 6,000 (Hong Kong dollars) over a longer period of time you can earn interest of, I think, 200 (Hong Kong) dollars by collecting that a year later. So that may be seen as a measure to actually deal with this possibility of inflation being fueled. How effective it is is yet to be seen. But we are, in fact, worried,” he said.
The rising costs worry residents in the tiny, illegal units atop this gloomy old Kowloon garment factory. They say while the world may envy Hong Kong’s success and cash surplus, the only thing they see trickling down to them is the rain through the leaky roof.