[DrBubb]

I plan to do more work on this thread,
particularly on the Hongkong Property Market

- - -



But in the meantime, am collecting some links.

How about this as a start:
Not The... South China Morning Post: http://www.ntscmp.com/
HK-oriented Weblogs: OrdinaryGweilo
News & Networks: tdctrade.com/ uk : hktrader.net/

This post has been edited by DrBubb: 24 July 2005 - 08:57 AM

[DrBubb]

Despite reports that Mr Tung is resigning due to stress and ill health, some analysts in Hong Kong believe he was sacked by China because he was seen as weak and unpopular.

This is the view of political commentator Steven Vines.

"I think the real lesson of all this is that the government in Beijing has demonstrated very clearly that they hold not only ultimate power but that they are prepared to exercise it," he said.

"If they are prepared to dismiss the most senior official in Hong Kong without any consultation with Hong Kong people whatsoever, it tells you that promises made to Hong Kong by the former paramount leader Deng Xiaoping really don't mean a great deal."

'Sham' autonomy

Mr Deng promised Britain, before the territory was handed back to China, that Hong Kong would be given a high degree of autonomy to run its own affairs. He called it 'One Country, Two Systems'.

"There's no longer Hong Kong people ruling Hong Kong, there's no longer a high degree of autonomy," said Martin Lee.

"If you ask me, 'Is there still one country two systems?' I would say, 'Yes'. There is a much larger system, which is the mainland ruled by [Chinese President] Hu Jintao and [Chinese Premier] Wen Jiabao," he said.

"Then there is the much smaller system of Hong Kong, but it is now ruled by [Chinese Vice-President] Zeng Qinghong, so if you like, that is still 'one country two systems' but Hong Kong is now ruled by different members of the same Communist Party."

Professor Joseph Cheng agreed. After all, he says, under the current system Hong Kong itself only has a limited input into the selection of the next chief executive.

Arguments about how long Mr Tung's replacement should serve, for instance, will be decided in Beijing.

"It is obvious that we will not have the opportunity to discuss the issue of political reforms in detail for the election of the third-term chief executive and beyond," the professor said.

"Whatever arrangements are to be followed, it is obvious that there is no room for Hong Kong people to play any part in deciding our future," he said

...MORE: http://newswww.bbc.n...fic/4333525.stm

[Cornish Pasty]

Dr Bubb

I think Hong \kong may give the most important clues to what lies ahead. At the moment corruption is rife. One factory I know of pays 900 staff in cash to avoid tax all round. A tighten up on this would hit big time prices of imported goods in the west. Perhaps by 10 to 15 percent, and we know that this margn could be absorbed as imports would still hold a monopoly due to cheapness.

[DrBubb]

thnx, CP

My gf is from HK, and I used to live there.
We may be traveling out later this year, and are looking to do some business
in China, so I am keep an eye on the place.

Here's a sceptic's view on the former British Colony's future:

- - -


Why The World Sees Hong Kong As China’s New Colony
Mr Stephen Vines, a Hong Kong-based writer, journalist and businessman,
was the Foundation’s guest speaker on 8 November 2000.

EXCERPTS:

If Hong Kong were seen as just another city in China, this would not be enough to assure its future. As a Chinese city, Shanghai was much bigger and had greater potential.

It was true that dissidents were not being arrested. ... There was a steady erosion of rights and processes rather than an explosion – a slow corrosive process that it was hard to put a finger on. ...

However, it remained a fact that Hong Kong was very much more free than the Chinese mainland. And however bad it became in Hong Kong, a substantial gap was likely to remain.

Mr Vines described Hong Kong as China’s new colony. How could this be a valid description when Hong Kong was within the nation of China and consisted of the same Chinese people? Mr Vines left aside the debate on whether Cantonese was in fact the same language as Mandarin.
...
How was Hong Kong doing three years into the "glorious reunification"? Mr Vines felt that it was very fortunate for the Chinese leaders to inherit the colonial system left by the British in Hong Kong. It suited very well a regime that wished to rule Hong Kong at one remove. It also suited very well the people within Hong Kong who mattered, namely the business tycoons: under the colonial system their views were consulted in preference to almost anyone else’s. These mechanisms provided continuity and enabled China to retain control as Britain relinquished power – a process that normally led to independence and the people of the former colony choosing their leaders by direct election. And so Tung was able to present the handover as a success.

The problem was that Hong Kong had moved on. One had only to look at the situation on the terms set by the Government’s own propaganda. Hong Kong was, or was claimed by the Government to be, a global trade centre, and financial centre, and (more dubiously) a cultural centre. Yet how could Hong Kong be a leader in these respects while clinging to a third class governmental system? ... Like the Communist Party, the Hong Kong Government was obsessed with control, with maintaining stability, as if Hong Kong were collapsing into a sea of civil war. This was of course absurd. Mr Vines had not noticed much social unrest on his way to the Hong Kong Club that morning.

All important decisions were made in Beijing, for example the choice of Chief Executive. In Mr Tung, the Chinese leaders had selected someone who was instinctively of the same views as themselves, so they had no need to intervene in Hong Kong to achieve their desired ends. Tung was well-meaning, staunchly patriotic, but completely out of tune with the people of Hong Kong. He deferred to the Motherland in all things.

What was the consequence of all this? The sequence of events after the handover was depressing. The semi-democratic legislature was abolished and replaced by an appointed body. When push came to shove, and the Court of Final Appeal ruling on the right of abode was not to the liking of the Government, they referred it to the National People’s Congress, a political rather than a judicial body, so taking the decision out of Hong Kong’s hands.
...
The colonial mechanisms provided continuity and enabled China to retain control as Britain relinquished power – a process that normally led to independence and the people of the former colony choosing their leaders by direct election.

Authoritarian societies were generally less developed, poorer and more prone to unrest than democratic societies, said Mr Vines. He acknowledged that people objected to this thesis. They pointed to Korea, Taiwan and Hong Kong in earlier stages of their respective development as being authoritarian and yet relatively rich and stable. Even if these apparent exceptions were valid they only counted at lower levels of development. If Hong Kong were seeking to be a world leader in plastic flower manufacture, it could rest content with its immature political system. If Hong Kong had higher aspirations, then it would need to reform itself.
...
Hong Kong was expensive. If it was to compete with other Chinese cities it had to be significantly better than them, otherwise companies would simply go to the cheaper cities. Hong Kong could not revert to being a domestic-oriented self-sufficient economy. Hong Kong needed its international links.

Was there any chance that Hong Kong could act as a model for China in its own political reform process? Mr Vines doubted this because it would conjure up for the Chinese leaders the ultimate nightmare of Hong Kong as a base for international subversion of the Mainland. This was precisely why Article 23 was needed. Mr Vines felt that it was really very difficult for Hong Kong to influence China’s political development without arousing a negative response from the Chinese leadership. It would seem to undermine the rule of the Chinese Communist Party.

...MORE: http://www.hkdf.org/...newsarticle=110

This post has been edited by DrBubb: 21 July 2005 - 07:25 AM

[DrBubb]

The Future of Hong Kong's Monetary System
Mr Tony Latter, Visiting Professor,
EXCERPTS

Long term future of monetary system
In order to understand the possible future of the monetary system, said Professor Latter, one had to appreciate the history and the institutional structure.

The history was that Hong Kong was a colony. Colonies did not have central banks. They either used the metropolitan currency, or established a currency board based on the metropolitan currency. Hong Kong was an exception. It was a trading post for China, and it used silver as its currency as China did. This was a kind of silver standard, as employed by China. When China left the silver standard in 1935, Hong Kong faced a quandary. It had no central bank and so could not handle a managed float. So it adopted a currency board based on sterling.

So it was not the case, Professor Latter emphasized, that Hong Kong's currency board was invented in 1983. Hong Kong adopted a currency board in 1935, and inadvertently left it in 1972 amid the international currency turmoil and, in particular, the weakness of sterling at that time. The territory then survived more by luck than good judgement until the early 1980s when the stresses of the impending transition of sovereignty began to overwhelm the currency and it was realized that it had been a mistake to abandon the currency board.
. . .
Institutional arrangements
Nonetheless, Professor Latter emphasized, Hong Kong's de facto central bank differed in important respects from central banks overseas. Elsewhere the central bank was a separate corporate entity and statutorily independent of the government. For example, in order to qualify for membership of the European Central Bank (ECB), national bank heads had to demonstrate that they were statutorily independent from the finance minister. The HKMA, in contrast, was not independent. The Monetary Authority was a legal person appointed by the Financial Secretary. The Financial Secretary could appoint or dismiss him at will, and give instructions to him as he saw fit. Nor was the Financial Secretary answerable democratically to the people.

The Financial Secretary thus had the freedom, and lack of accountability, to take major decisions on the monetary system himself.
...
What would be the alternatives to the US dollar linked rate system? If there had not been the peg, there would not have been the inflation of the 1980s and 1990s, nor the deflation of recent years. But instead there would have been a fluctuating exchange rate. Would that have been worse? It was difficult to say. Nonetheless, three or four years ago, when people had been complaining about the effect of the linked rate, there had been no coherent proposals to replace it.
...
Should the Hong Kong dollar be pegged to or shadow the RMB? A lot of nonsense had been spoken about this, said Professor Latter, albeit that the RMB had been stable against the US dollar for eleven years, and China's internal prices had adjusted considerably to accommodate the fixed rate. However, if China moved the peg once, the markets would not believe that it could move back. The RMB could not be a backing currency for a currency board since the RMB was not freely convertible. So for the Hong Kong dollar to track the RMB would be a managed float with intervention.

A further reason not to consider the RMB was that structurally, the monetary economy of China was about to undergo profound change. In particular, capital controls were going to be lifted. When this happened, the RMB might even fall - and then would Hong Kong want to go down with it? Further, the People's Bank of China had no track record of managing a free floating currency. Perhaps they could do it, but it was just not known. In contrast, the US Federal Reserve was well known for its capability and disciplined management.

There was no ground in the Basic Law for Hong Kong to abandon its independent currency, said Professor Latter. Far from it, Hong Kong's constitution mandated its monetary independence. Was China's size a factor? Should Hong Kong follow its neighbour simply because it was big? Professor Latter drew attention to the examples of Canada and Mexico, which were much smaller than the US and more dependent economically on it than Hong Kong was vis a vis China, and yet had independent currencies. Switzerland and Germany were a further example.

Was the volatility of the US dollar a problem? It was true that the US dollar had been volatile. A basket of currencies would be more stable on average. Given today's technology, a basket could be managed relatively easily. However, it was difficult to monitor. It would not be transparent to the man in the street. Thus confidence might would be difficult to sustain. And a link to a basket of currencies was still a fixed rate system. The implication of such a system was that one had to surrender control of one's monetary policy. One had to accept the monetary policy of the economy to which one's currency was pegged.

In 1983, Hong Kong had chosen a currency board because it did not have a central bank. If it had had a central bank then, it might have chosen otherwise. Now, Hong Kong in effect did have a central bank, and could decide to adopt a managed float system. Nonetheless, the latest changes to the linked rate system were in line with the way the system had been operated in recent years, and essentially confirmed the way the system was already operating.

@: http://www.hkdf.org/...newsarticle=164

This post has been edited by DrBubb: 21 July 2005 - 07:48 AM

[DrBubb]

.. duplicate ..

This post has been edited by DrBubb: 21 July 2005 - 07:48 AM

[DrBubb]

September 17, 2004
Spike - what went wrong?
Wednesday's Standard had a more detailed piece about the closure of Spike magazine:

Spike's demise had been predicted among the territory's small expatriate journalist community ever since it opened. Spike was launched last November and was supported by nine investors - individuals and companies - among them staff and contributors.

The magazine set out to use satire to explain the workings of the government, "at a time of heightened interest in politics, deepening cynicism about the government's ability to meet the aspirations of Hong Kong people''. The July 1 anti-government demonstrations and pro-democracy wins in the District Council elections last year were the catalysts for its launch.

The magazine offered translations of Apple Daily and Next magazine stories, and an `Expat TV' section whose fictional programmes poked fun at foreigners. The plan was to refinance it after six months, Vines said, having proved to potential investors its creators had "something to show''. While other investors were secured, the major investor did not deliver the amount they had agreed on before the company's deadline.

"We were left high and dry, I'm afraid,'' Vines said, declining to disclose financial figures. Political columnist and Spike investor Andy Ho said he thought the magazine put up a "good fight''. "People liked to read it, especially the expatriate community,'' he said.
...
A magazine is a buisness, Spike failed because it had no advertising and couldn't attract enough people to buy copies to cover its costs.
...
The market for English language media is not very strong in Hong Kong. I don't think The Standard publishes circulation figures, and there is a good reason for that, whilst TVB Pearl and ATV World are subsidised from the profits made by the Chinese channels. It was always going to be a challenge to establish a new title, and they needed more time. If their business plan didn't allow for that, then clearly they got it wrong.

What I find disappointing is that so many people seem to have been willing Spike to fail. I can only assume that Steve Vines has made a lot of enemies in Hong Kong.

Posted on September 17, 2004
@: http://www.ordinaryg..._what_went.html

[DrBubb]

July 18 - Bloomberg (Joshua Fellman):
“Hong Kong luxury-apartment prices are likely to near 1997’s record high as investors bet a shortage of larger homes will outweigh the impact of rising interest rates. ‘This city is awash in liquidity and people here have a property obsession,’ said Andrew Ness, a Hong Kong-based executive director at property agent CB Richard Ellis Inc.”

@: http://www.prudentbe...blebulletin.asp

[bert]

DrBubb, on Jul 24 2005, 08:21 AM, said:

July 18 - Bloomberg (Joshua Fellman):
“Hong Kong luxury-apartment prices are likely to near 1997’s record high as investors bet a shortage of larger homes will outweigh the impact of rising interest rates.  ‘This city is awash in liquidity and people here have a property obsession,’ said Andrew Ness, a Hong Kong-based executive director at property agent CB Richard Ellis Inc.”

@: http://www.prudentbe...blebulletin.asp

<{POST_SNAPBACK}>

I have a property in Hong Kong which I bought near the peak in about 96. After the 97 crash I was convinced the highs in property would never be repeated. It looks like it is now nearing this mark again after only 8 years! Shall I bail out now and at least get what I paid for with this property? What do you think Bubb? There is still a possibility I will return to HK in a few years.

[davebarkshire]

Although the property in the main centers is high, there are allegedly bargains to be had on the outerlying islands. Lamma has long been a gwailo stronghold and I have friends who have bought there recently at the bottom of the crash and they seem to be renting out ok. They have told me that they're getting about 8% yield. There is so little information about this small market and it seems that you have to go out there and ask locally to find out what is available. If anyone knows of any good info sources, please post them here.

[Gwailo]

davebarkshire, on Sep 21 2005, 02:09 PM, said:

Although the property in the main centers is high, there are allegedly bargains to be had on the outerlying islands. Lamma has long been a gwailo stronghold and I have friends who have bought there recently at the bottom of the crash and they seem to be renting out ok. They have told me that they're getting about 8% yield. There is so little information about this small market and it seems that you have to go out there and ask locally to find out what is available. If anyone knows of any good info sources, please post them here.

<{POST_SNAPBACK}>

Franky speaking, places like Lamma Island (Lantau Island etc) are a very small market.

'Gwailos' love to live in the places, and they pay of course!

Having said that, it is such a small market that sometimes properties can be difficult to sell as banks are not willing to provide much finance on such properties.

Be aware that at the current time (i.e. this week) banks in HK have raised interest rates - this will likely impact prices.

Might be time to watch & wait perhaps?

Good luck.

[davebarkshire]

Gwailo, on Sep 22 2005, 09:26 AM, said:

Franky speaking, places like Lamma Island (Lantau Island etc) are a very small market.

'Gwailos' love to live in the places, and they pay of course!

Having said that, it is such a small market that sometimes properties can be difficult to sell as banks are not willing to provide much finance on such properties.

Be aware that at the current time (i.e. this week) banks in HK have raised interest rates - this will likely impact prices.

Might be time to watch & wait perhaps?

Good luck.

I had a look on Lamma recently and saw flats selling from around UK pounds 25k. A friend of mine just got a very nice one for less than UK pounds 60k with full sea views and the roof. It's a tiny market and I'm told that you need a lawyer who is familiar with island property as there are tribal considerations. The banks shy away from buildings that are less than 15 years old and normally require a deposit of 30-40 percent.

[bert]

Hello, does anyone have any more links for Hong Kong stats on house prices, the economy, etc..... similar to what is posted here. My dad is about to buy a place over there and I'm not sure what to advise him! He was already stung bad in 1997.

[expatowner]

Try:
www.centanet.com
and
www.midland.com.hk
these are the biggest two agencies in Hong Kong

Only a few of the better areas have reached back up to the levels of 1997, most areas are still hanging around between 80-90% of the peaks.

Oops should have said that the centanet website has some great graphs of average house prices - just go to the for sale section and chose an area then beneath each available property there is a graph symbol, click that to see average monthly, 6 month and yearly averages.

This post has been edited by expatowner: 14 March 2006 - 09:02 AM

[DrBubb]

Friends are comsidering a move to HK.
Can anyone help answer the Questions that i am getting:

What is the approximate monthly rent for a decent Flat in Mid-Levels these days?

What other areas are worth considering?

This post has been edited by DrBubb: 27 March 2006 - 07:32 AM