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Contents

Message from the President

It is my pleasure to celebrate with you the proud achievements of WHKPASS 2015-2016 with the 8th issue of our annual publication, PASSTIMES. This magazine represents the blood and sweat of our editors and designers, as well as the collective effort of all who have participated and contributed to WHKPASS this year.

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Last year was a year of conflict and tragedy for both Hong Kong and the world, including the growing tension between citizens and the government of Hong Kong which has led to prevalent resentment, the many terrorist attacks around the globe that we have lost count of, the migrant crisis in Europe and many more incidents that our hearts go out to. Throughout the year, WHKPASS has upheld our motto of “Knowledge and Action”, and played an active role in raising awareness about public affairs through running a brand-new initiative, namely PA-riscope, a bi-weekly news-sharing project on our Facebook page and organising various on-campus events that provoke discussions. For instance, in the light of the Syrian Crisis, we invited a previously displaced Syrian to share her experience and insight in the refugee crisis and the rise of ISIS; in light of the ‘Fishball Revolution’, we organised a discussion forum theming the incident and exploring the underlying localist sentiment behind the clash.

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As the saying goes, “where there is shadow, there must be light.” Despite being in these challenging times, I see people standing up courageously against terrorism, speaking up about injustice and giving a hand to the less privileged. “Humanity is an ocean, if a few drops of the ocean are dirty, the ocean does not become dirty.” With this value in mind, WHKPASS continues our social service both at home and abroad, from preparing meal for the poor with Food Angel in Hong Kong to volunteering in a Children’s Home all the way in Albania.

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The coming year is going to be another challenging year, with the political uncertainty from Brexit and the upcoming presidential election in the United States, the continuing threats of ISIS and potential confrontations between Hong Kong people and the government. However difficult it may seem, one must not lose hope in humanity and democracy, and that is how we continue, not only to survive, but to thrive as Asia’s World City.

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Raymond Tsang President WHKPASS 2015-2016

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Message from the editor-in-chief

The greatest challenge of the 21st century is combating ignorance. This does not mean to be a condescending statement, but a genuine call to be cautious about the attitude that seems to be gradually pervading our world today: the ignorance that says politics is “none of my business”; the ignorance that filters our vision with dichotomising lens, which generalises and categorises people into either ‘yellow’ or ‘blue ribbons’, left or right; the ignorance that closes our mind against views that differ from ours and belittles those who disagree with us; the ignorance that dismisses others’ difficulties just because one hasn’t experienced them personally and takes for granted the privileges that have led us to where we are today.

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Lastly, I shall take this opportunity to thank Boyle Kir, Neville Lai, Victor Hui, Michelle Lam and Edith Li for their incredible support in putting this publication together, as well as every author in this issue, particularly Mr Lim Song Bun, a distinguished alumnus of WHKPASS. Special thanks also go to Alison Pong (CSM, UAL ’17), who has generously contributed to our cover design. It has certainly been a privilege for me to work with such an outstanding team.

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I am pleased to present you the result of our hard work and I hope you will find this issue an enjoyable and inspiring read! Nicole Chan Media Director WHKPASS 2015-2016

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Still Happy Together? A brief discussion of Hong Kong cinema and identity

School Culture Differences A view from high school in Hong Kong and Canada

Is Studying Oveseas for Higher Education a Really Worthy for Hong Kong students? The Forgotten Victims in the Fishball Revolution

Housing Bubble Threat in Hong Kong -The effectiveness of public housing in

moderating private home prices

Ignorance poses a serious threat because it cultivates apathy and kills empathy. It rejects rational debates and allows inflamed passion to rule our minds, letting ill-informed individuals act upon their biased beliefs. The numerous violent attacks we witnessed in different places around the world, such as the bombings in Baghdad and Brussels, and the shooting in Orlando, were just some of the few examples prompted by the ignorance so prevalent in our time. Therefore it is the editorial team’s prime motivation to foster informed debates over some of the most controversial public affairs that relate specifically closely to us this year, such as the frequently-mentioned One Belt One Road Initiative and the Hong Kong localist narrative that has been trending throughout 2016. Our contributors strive to offer both fair overviews and personal insights in their articles, which encompass various heated topics within and beyond Hong Kong. Whilst you might not necessarily share their viewpoints, I do hope you will read the articles with an open mind and develop your stance after considering different sides of the story. Nothing but open-mindedness is the key to prevent the triumph of ignorance in our generation!

WHKPASS Events 2015-2016

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Hong Kong: a Desirable Location for Retirement? The Crossroad Ahead -

Hong Kong's direction in one belt one road

The Tragedy of Hong Kong's Development The Rejection of China

What the localist youth of Hong Kong thinks 3


WHKPASS Events 2015-2016

Joint PASS Orientation Day 2015

Joint PASS Orientation was hosted by WHKPASS, in cooperation with PASSes of 11 other British universities, to offer an opportunity for freshers from these universities to network and meet each other. Everyone had an enjoyable afternoon playing ice-breaking games and completing quizzes at our event.

700 Days Away from Home Sharing from a Displaced Syrian

The Syrian Crisis shook up the world once again when the image of a drowned Syrian boy washed up on beach in Turkey went viral with #KiyiyaVuranInsanlik (humanity washed ashore) in September 2015. To help students get better informed about the debates triggered by the Crisis, including the UK's immigration policy and the EU's asylum system, we have organised a guest seminar delivered by a displaced Syrian whose family has sought refuge in Germany since 2014. Our guest shared with us the background of the current conflict and her invaluable testimony to the drastic changes in her country since the conflict broke out in 2011.

WHKPASSxWGAHK Cocktail Reception

In response to the unexpected event that happened on the first day of the Chinese New Year, a discussion forum was organised to provoke debates on the incident. Joined by students from Hong Kong, the Mainland China and Singapore, the panel presented a successful, rigorous and rational debate. Thanks to the enthusiastic participation from the audience, the forum also served as an excellent opportunity for our members to exchange their idverse views over the political future of Hong Kong.

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LSE Forum 2016

Training intensively under coaches Marc Lai, Raymond Tsang, Nicole Chan and Kelvin Lo, our representatives Jeffrey Sun, Boyle Kir, Victor Hui and Justin Chan were crowned Champion of this highly competitive tournament. This was our second time winning the tournament in the past 3 years. This remarkable achievement was testament to time and effort we put in. Warwick HKPASS Debating Team is one of the best debating teams across the UK. We welcome all students who are interested in debating and public speaking, including experienced debaters and beginners. We offer professional and comprehensive training to help our members master the basics of debating. Neither Boyle, Victor nor Justin had debated before, but our firm belief in development and hard work ultimately brought us success.

Albania Service Trip 2015

The Cocktail Reception, cohosted by WHKPASS and WGAHK, was the first event that introduced freshers to our current members and alumni of Warwick. We were delighted to have the company of Mr Chip Tsao, who had unreservedly shared about his experience at Warwick and some invaluable advice to our members. The evening also incorporated the presentation ceremony of the annual scholarship granted by WGAHK to selected individuals who have shown outstanding talents.

Term 2 Discussion Forum on The Fishball Revolution

Christmas Conference 2015

Our flagship annual Christmas Conference was held on 20th December 2015 in collaboration with LSESU HKPASS and HKU Debating Society. The theme this year was on the social mobility of youth in Hong Kong. Our guest panel were filled with representative from different industries in Hong Kong. Mr Jasper Tsang, Mr YY Lam, Miss Amy Chan and Miss Doris Leung were guests of the first panel. Our second panel consists of Mr Ronny Tong, Mr Samuel Siu and Miss Michelle Lam. The conference was a culmination of panel discussion and floor questions, with our star­-studded panel of guests offered constructive advice from their experience to our audience.

Cambridge Quiz 2015

After being crowned Champion in 2014, our team once again put up a marvellous performance. Sam Yu, Justin Chan and Tony Chiu were our representatives at the Quiz, each being an expert in their respective fields. After a sleepless night, our representatives have kept themselves composed despite the challenge from various great teams from other participating universities. Having marched onto the finals, our team faced even bigger threats from the hosting team, Cambridge. With the support from our society members and our team’s perseverance, we successfully secured the second place.

Albania is among the least developed countries in Europe, with one quarter of the population living below the poverty line of US$2 a day. Members of WHKPASS departed from our comforts in the United Kingdom and set foot onto this foreign land most known for their dictatorial regime. Yet the moment we landed we were greeted with welcoming smiles and a warm embrace by the local citizens. The city was full of surprises - whether that be their impeccable level of English, to their passionate obsession with football, Tirana was an eye-opening city. We helped reconstruct the community centre inside the Babrru region of Tirana, where many unprivileged ethnic minorities establish temporary settlements. Under threat of floods and lack of electricity, the children of the region relied on the community centre for basic human needs such as shelter and education. Despite what would seem to be poor living conditions from our, spoilt and privileged upbringing, the children were always full of joy. Especially when four 6 year olds gave us a thrashing in a friendly football match. Whether it be expanding our knowledge of the history and culture of this post-communist country, or taking action in giving back to society, the service trip to Albania was a truly remarkable experience for us all.

Charity Night 2016

Charity Night is the annual flagship event of the WHKPASS which has been organised annually since WHKPASS was founded. It exists with the objective of raising funds for the charity organisation we co-operate with, and raising the awareness of current social problems and people who need help in society, in order to accomplish one of the core missions of WHKPASS, committing to the society through “action”. This year, we were honoured to work with Doctor without Boarder and Cancer Research UK in the organization of this event with numerous performances contributed by other societies invited. The drama with the theme, Redemption, was the main shaft of Charity Night which connected all the performances. Several food booths were set up for fund raising as well, a few weeks before the night.

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still happy together?

-A brief discussion of Hong Kong cinema and identity Justin Chan

W hen asked whether they know where or what

Hong Kong is, a foreigner would most probably say “Jackie Chan”, or picture a guy in bright yellow jumpsuit doing flashy martial arts moves and wondering if it’s Jackie Chan or someone else. Yet, as homogeneous and shallow as its stereotype might suggest, Hong Kong cinema has long been an apt representation of the city’s history and identity. From its humble beginnings as low budget productions by refugees from Mainland China due to civil war in the early 20th century, to its New Wave period in the 80’s bringing Cantonese films to international critical acclaim, it has witnessed drastic changes in the status of Hong Kong - in relation to mainland China and the world at large. However, as the handover from Britain to China gradually came about, so did the decline of Hong Kong cinema, according to filmmakers and audiences alike. But how did this all come about, and what will recent trends such as joint-invested films and independent productions (indie movies) mean for the future of the industry and Hong Kong’s cultural identity? It may be easiest to begin with the Golden Age of Hong Kong cinema in the 80’s and 90’s, when local actors (think Jackie Chan and Chow Yun-fat) could become Hollywood stars and filmmakers receive commercial and critical acclaim across the globe. At the time, China still had vivid memory of the Cultural Revolution and the Maoist era, and only in its baby steps of economic expansion and modernisation. In satirical films such as Her Fatal Ways (表姐你好嘢!),

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a Chinese woman (played by Carol Cheng) is portrayed as a Communist fanatic who is used to smoking and spitting in the street, juxtaposing with her nephew from Hong Kong (played by Alfred Cheung) who embraces rather modern, Western ways of life. Sure, the Chinese were depicted in a negative light, but films in the 80’s and 90’s still reflect a prevailing attitude that familial ties are bound to make Hong Kong and China inseparable in sentiment and cultural identity. Fast forward to 1997. The year of the Handover. Many, mainly the rich, opted to emigrate to the United States, Europe and Australia in fear of the Chinese government. Some were optimistic and some were in angst. Some did not know what to feel exactly, including New Wave director Wong Kar-wai as he made his way to Argentina to film Happy Together without a script. Happy Together (春光乍洩) opens with Leslie Cheung’s character telling Tony Leung’s character that “We could start over.” The audience is introduced to a pair of lovers who have broken up several times in the foreign land of Argentina. Po-wing (Leslie Cheung) repeatedly urges Yiu-fai (Tony Leung) to be with him again, but Yiu-fai is deeply unsure of whether they will be happy together (hence the title), even if they still have feelings for each other. In a way, the couple's relationship can be interpreted as a metaphor for that of Hong Kong and China, espeically when Yiu-fai says the days when his lover fell ill

and needed his care “were our happiest together”, reminiscent of instances when Hong Kong people expressed kinship and care for the mainland Chinese in times of strife and hardship, most notably during the Eastern China flood of 1991 and the Tiananmen Incident. Nevertheless, Wong Kar-wai, who went on to win Best Director Award at the Cannes Film Festival, presented a question rather than an answer to whether Hong Kong and China will once again be happy together, after almost two centuries of parting, despite many contradictions and uncertainties.

strengthening the trade relationship between Hong Kong and the mainland and offering more opportunities for local industries which were facing difficulties. The film industry was one of them. With CEPA in place, filmmakers were encouraged to enter the mainland market, through new sources of production funds and of course, a rapidly expanding audience. Joint-invested films became the new norm for Hong Kong films that provide a new path for filmmakers to exercise their craft. But a new question then arose: are these cooperative films still products of Hong Kong cinema per se? If a movie was made with the money of Chinese investors and made for the Chinese cinemagoers, would it still be a Hong Kong film?

Several years later, Hongkongers continued their post-Handover way of life, as promised by Deng Xiaoping, but to many of them, the year that really changed Hong Kong was 2003, when the epidemic SARS struck the city and its eocnomy faced total meltdown. At the same time, it meant something else, in terms of Hong Kong's relation to China. When government officials had to think of ways to rejuvenate the economy afer the catastrophe, they Hong Kong films have long represented its unique local turned to Beijing, and signed the agreement of CEPA, culture: in the martial arts films of Jackie Chan, we see 7


the inheritance of Chinese culture; in the art films of Wong Kar-wai, we see filming techniques and cinematic elements taken from Hollywood productions. When joint-invested films slowly encroached the local film industry; when Hong Kong producers could no longer decide what types of films to be made, for their own market, Hong Kong films were gradually diverging from its culture. This represents an identity crisis for Hong Kong people: as for them, their culture cannot be reconciled with that of the mainland, and allowing outsiders to tamper with what they hold dear personally seems out of place. This instance of insecurity is captured in Pang Ho-Cheung’s comedy Vulgaria (低俗喜劇). In its most widely known scene, a Hong Kong producer (Chapman To) discusses the funding of his new film with Mainland mob boss Tyrannosaurus (Ronald Cheng), where he gets treated to a feast of exotic game meat and is urged to perform bestiality. Naturally, he is disgusted, but he still chooses to comply because he believes that “when in Rome, do as the Romans do”. At the end of the day, it is still about the money. Without the Mainlander’s money, he cannot produce his films and make a living. Facing this dilemma, many prominent filmmakers such as Jing Wong chose to fully embrace the Mainland, both politically and commercially, mass-producing films of low quality but massive box office earnings. Of course, the “cultural differences” between Hong Kong and China have been grossly exaggerated in the film, but the emotional distance remains palpable. Even when the living standard and economic power of the Mainland have finally caught up with that of Hong Kong, a sense of inconsistency between the two places persists, essentially due to the different lifestyles embraced by their respective residents. Likewise, since commercially, the Greater China market has drowned out its minuscule Hong Kong

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In reality, this feeling of powerlessness is also evident in Hong Kong’s political discourse, when interference from the Central Government has been constantly interpreted as acts of aggression and oppression. After years of unrest, it has culminated to the point of eruption when the Umbrella Movement broke out. Thence came a new era of Hong Kong politics, and a new era of Hong Kong cinema. As locals are increasingly estranged from their Mainland roots, and pro-Beijing filmmakers like Jackie Chan and Jing Wong have become objects of public ridicule, they are turning away from joint-invested blockbusters to low budget independent productions, including the 2015 box office hit Little Big Master (五個小孩的校長) and political drama Ten Years (十年). The latter depicts an imagined future of Hong Kong, where freedoms are diminishing and local culture and ways of life are threatened. In one of the segments named “Dialect,” a local taxi driver finds himself unemployed under a new regulation that requires fluency in Mandarin and thereby marginalises native Cantonese speakers. Having won the Hong Kong Film Award for Best Film recently, the multi-part film boasts to have beaten Star Wars: The Force Awakens in its opening week in a local cinema and went on to gain over 10 times its budget. Thus it can be seen that, with their future once again in great uncertainty, Hongkongers return to reflect upon questions of identity and what it means to be a Hongkonger. What lies ahead then, for Hong Kong cinema? From its early stages, the city’s films have proven themselves to be full of character, energy and vibrance, much like the city itself. In the face of adversity, uncertainty, and changing tastes, the industry has always strived to reinvent itself. While achieving overseas commercial success and leaving a mark in popular culture with its martial arts films, it borrows techniques and artistic elements from French and American cinema to form its New Wave; when facing local market dry-up and financial difficulty, it turns to yet unexplored markets like the Mainland to seek for new sources of funding; when inadvertently loosening its grip on local culture, it returns to its roots and attempts to revitalise the independent local cinema. To this end, all these changes reinforce the identity of Hong Kong people - a community shaped by the East and the West, the past and the present, tradition and innovation.

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School Culture

A View from High School By Tiffany Leung

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ulture is always an interesting topic to study: from its very explicit form of an official language to its more subtle being of norms and regulations present in a society, we can witness and understand the country’s values and beliefs through observing different aspects of people’s lives. For instance, my high school years, which I have spent in Hong Kong and Canada, gave me a unique exposure to the differences in school culture, and hence a brief understanding of the different approach to education between these two places. I was born and raised in Hong Kong for the earliest 15 years of my life, until a change was made as my parents agreed to send me abroad to Canada to continue my education. It is not difficult to imagine there being a huge disparity between the perceptions of school rules, classroom atmosphere and academic results between schools in Hong Kong and those in Canada. My first week in my new school was indeed an eye-opening one: students in class were wearing shorts, see-through tops, flip-flops, having piercings on ears and even on their noses, collars and eyebrows; there were also some who dyed their hair in colours you could never possibly imagine. I had a big shock as all of what I saw was nothing close to a standard acceptable in any local school back home. I was fascinated by this phenomenon, which prompted me to share my observation on cultural differences I obtained during my experience in Canada. School Rules In Hong Kong, mobile phones and food are not allowed in classrooms, as they are often deemed as the sources of distraction. In contrast, school rules are more relaxed in Canada, despite having not explicitly stated in school rules, seldom could we see students fiddling with their cell phones in class; or even so, more frequently they are using them for educational purpose. This is not however always the case, and of course there will be occasional rebels. Similarly, in some schools there is not a set of school uniform nor any specific restriction on students’ appearances in Canadian schools, in such case

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Differences

in Hong Kong and Canada

case, and of course there will be occasional rebels. Similarly, in some schools there is not a set of school uniform nor any specific restriction on students’ appearances in Canadian schools, in such case testifying my observations: people are diverse and individuality is celebrated at every level. While having grown up in a school environment where having a school uniform is the default, on one hand I feel that a uniform does have a function of enhancing school discipline and modesty. On the other hand, my years in Canada convinces me that there is no actual correlation between appearances and academic achievements. If the key function of a school is being a place where students learn and study, then the restrictions over a student’s appearance seems to be rather irrelevant to its purpose.

be more straightforward and less tricky than that in Hong Kong, with the genuine purpose of assessing students’ understanding of materials on the syllabus, as opposed to training students to becoming the most competitive exam machines. My peers in my Canadian high school often get 85% in tests and receive positive and complimentary remarks from our teachers. Yet in contrast, schools in Hong Kong embrace competition internally and externally – from kindergarten to university, the better you perform academically, the more outstanding you are. This does not only result in an unhealthy learning environment, it also creates an unfair system where only certain type of students can excel, whilst paying little attention to those who do not perform as well.

In-class Participation

Reflection

Unsurprisingly, learning methods and classroom atmosphere contrast dramatically as well. In Hong Kong, teachers deliver their classes unilaterally while students jot as many notes as they possibly can, and there is barely any interaction between them. Classroom participation in Canadian schools is significantly higher, as students are always encouraged to express their thoughts and speak up. This is likely to be attributed to the differences in perception of failure and ‘shamefulness’ between the two places. While in Canada failure in answering a question correctly are normally perceived as positive attempts and good practices to ‘learn from mistakes’, in Hong Kong it is more likely to be seen as a shameful act of not knowing doing the studies well and may be told off by teachers because of that.

Overall, to have studied under two contrasting education cultures was a very thought-provoking and eye-opening experience. There are differences in learning methods, classroom atmosphere and attitude towards academic achievements. I believe there is no standard formula for success for a country’s education system – it has to be designed to cater and accommodate the culture and needs of the society. If I had a choice to go back in time, I would still choose to embrace a combination of both: while I feel my learning performance had peaked under the pressure I had when I was in Hong Kong, the exposure and freedom I enjoyed in my Canadian school made some of the most colourful moments of my high school life. At the end of the day, I believe the differences in my high school experiences reflect some key cultural differences between Hong Kong and Canada – one being rather conservative and competitive, and the other being more open-minded and relaxing. There is certainly no right or wrong in culture; I believe both of them deserve to be equally celebrated and admired as some of the greatest places in our world.

Assessment Standards Canadian schools generally have a more relaxed grading scheme, which therefore allow teachers to foster an environment that promotes positive learning, instead of forceful exercises that are pushed and threatened by punishment. Exam questions tend to

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Is studying overseas for higher education really worthy for Hong Kong students? by Brian Tang

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n recent years, the number of Hong Kong students entering universities in the United Kingdom has increased by almost a quarter. According to UCAS, the organisation that operates the application process for British universities, a record number of Hong Kong applicants have been accepted into UK Higher Education. Hong Kong SAR then becomes UCAS’s second largest international market after mainland China. On one hand, Helen Lee of UCAS’ Professional Development Team, espouses the reason for this surge is because Hong Kong students are attracted by the excellent teaching, diversity and quality assurance in British universities. On the other hand, researchers attributes the influx as the growth in uncertainty about Hong Kong’s new Diploma of Secondary Education (DSE). Despite the difference in explaining the trend, this essay intends to evaluate whether paying the hefty fees for overseas education in the United Kingdom really worthwhile for Hong Kong students? Today, a university degree no longer guarantees a good life as it is no longer worths what it once was. The main reason for this is due to the rapid expansion of higher education since the 1990s. In 1993, only 10.6% of young people in Hong Kong obtained a degree. Today, it is approximately one in two people. In financial terms, a bursar at University of Oxford believes that the cost of a British University degree is simply not worth it for many students as most won’t be able to repay their investment of paying 200,000 HKD a year. Another study supports this as there is now only a 14% gap in salary between a university graduate and a non-university graduate, calling going for further education a financial ‘gamble’.

of Hong Kong. According to QS World University Rankings, four out of six top universities in the world are in the UK. It is also a whole different environment and cultural experience for Hong Kong students, allowing us to broaden our horizons and improve our life skills. Thus, in order to truly minimise the hefty costs as an international student, the best way is to take the initiatives sharpening all skills necessary, be they hard or soft. A diverse experience is what employers like to see in an employee. Take advantage of the opportunities you have as an undergraduate in the United Kingdom by pursuing internships and getting involved in the broad variety of student societies offered. This would let you stand out to employers as an all-rounded individual with an multifarious mindset. Building a comprehensive network may be one of the biggest advantages for studying in the UK. British universities offer countless networking events and societies for you to expand your social network. Without a solid network of contacts, you will be missing an important piece of the puzzle towards getting a high-paying job. By attending networking events, participating in internships and volunteering activities, you will begin to build a network that may provide you with the opportunities you dream of. In all, whilst obtaining a bachelor’s degree is far more common in this generation than before, there are priceless merits and opportunities essential to our overall development as an all-rounded individual.

There is also a mismatch between the demand for university degrees and the supply of places at universities. Currently, vocational skills such as computer programming, engineering and construction are in hot demand. Whilst there are not enough graduates in the labour market with the specific technical skills, the main problem for international graduates is their poor language skills and limited exposure to the outside world. Although having a degree today is no longer as advantageous as before, not having one is still a serious disadvantage. There are still plenty of advantages studying overseas in the United Kingdom instead

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The Forgotten Victims

in the

by Tony Chiu and Neville Lai

Since the Umbrella Movement in 2014, Hong Kong

has overseen steaming tension between its government and the general public. There has been a surge of radical political parties, including Civic Passion and Hong Kong Indigenous, activist groups that advocate a ‘localist’ agenda. Established in 2015, Hong Kong Indigenous made their name known to public from their anti-crossborder trading protests in Yuen Long to their participation in violent activities on the first day of Chinese New Year, which they claimed to be protecting local traditional hawkers who worked on the few rare days of the year. Yet another rough and chaotic confrontation between the government and the people in Hong Kong, the “Fishball Revolution”, tells not only a story of political hijacking which many have perceived it to be - but also an account of public despair over ineffective government actions on preserving local traditions like food hawkers on streets.

street vendors, hardly anyone concerns or even queries the future of the main victims of the incident, the fined hawkers, nor has the media given them much attention. Their equipment and capitals are confiscated which means they cannot easily make a living in the near future. The fine, albeit payable, is another big burden for them, especially given that most of them are from the grassroots. It is argued that the government has offered new settlement to the hawkers, but it does not necessarily reflect their need.

The Fishball Revolution took place at the start of the Chinese New Year to protect, it was claimed, the local culture of Hong Kong. It began when the officers from the Food and Hygiene Department issued tickets to the unlicensed hawkers that were selling food on the streets in Mong Kok. In light of this, Hong Kong indigenous organised a large scale of raids to shield the hawkers, since the protesters accentuated that it had been a long tradition to allow hawkers to sell food in the first three days of the Chinese New Year; thus they claimed that the crackdown was unreasonable. A standoff at midnight violently escalated into a battle between activists and police forces; two warning shots were fired and heard. In the end it resulted in 44 injuries and 24 arrests; a scale of demonstration that is seldom seen in Hong Kong.

Since 1921, the Hong Kong government has been issuing licenses to hawkers to allow them to sell food on the streets. However, those stalls had come to cause traffic congestions and hygienic problems in areas they operated. As a result, the government has stopped issuing new licenses from 1951 and limited the transfer of license. This also explains why there are so many unlicensed hawkers on the street nowadays. To put it in another way, the reason for the huge number of unlicensed hawkers on the streets is because they cannot possibly obtain a license. Last year, the Financial Secretary John Tsang proposed a new policy to introduce food trucks as an alternative to preserve and popularise the local food culture. However, a food truck can cost up to over one hundred thousand Hong Kong dollars, a number almost unimaginable for most of the hawkers who make only a few dollars over every deal. This proposal does not seem to be able to address the problem effectively, simple reason being that the often underprivileged hawkers who need these instruments to make a living would not be able to afford the extravagant food trucks.

The event has been politicised and drew different debates such as the preservation of local tradition and the public discontentment towards government policies. While most people focus their attention on either the 'justified' warning shots by the police forces and the local culture of

There are food stalls around the world; it is an idea that is not necessarily an original culture of Hong Kong. Rather, having street vendors is a phenomenon that oversees the development of Hong Kong. It is an unique Hong Kong culture that food stalls cannot simply replace.

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fishball revolution It is this sense of nostalgia that Hong Kong people are hoping to sustain. I thus hope the Hong Kong government re-issuing new licenses and providing venues for hawkers for a few reasons. Firstly, the cost would be much lower and it is easier to control the hygiene. Secondly, the culture can be protected and it can be seen as a new viewpoint and attraction for both local and foreign visitors. This can boost the Hong Kong economy. Some successful examples around the world include that of Shilin Night Market of Taipei and street food in Bangkok. Being in a crowded space may not be what tourists want, but it is exactly this packed atmosphere of Hong Kong where people come to to enjoy the crowd - as seen in events such as the Lunar Market. Thirdly, it provides a great chance for hawkers to earn money, thus encouraging them to work way out of poverty, an idea that should be greatly invigorated. This will also reduce the pressure exert on the government spending on comprehensive welfare. Although there may be different debates regarding the reasons of the unrest and the justifications on the warning shots, it is undeniable that the Hong Kong government has demonstrated a weakness in addressing economic and basic social welfare problems, which was apparently one of the triggers for the socalled “Fishball Revolution.”. It seems to be the case that the government prioritises premium business before sustaining local culture as we see the new proposal does not attempt to eradicate the cause of the problem. It may well also be the reason of the public despair over the government policies recently, due to different priorities. But this, needs to be addressed by experts, and should not be left for a later day.

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Housing bubble threat in Hong Kong: The effectiveness of public housing in moderating private home prices By Siu Ming Edwin Kwok

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iven the long lasting housing problem of Hong Kong, we are delighted to welcome Edwin Kwok, alumnus of Warwick’s Hong Kong Public Affairs and Social Service Society, who kindly shared his research paper on the the effectiveness of public housing in moderating private home prices in Hong Kong. This is merely a summarised extraction of his full paper, in hopes of simplifying the technical elements of the original research to allow for greater readability. For a more holistic analysis on the topic feel free to contact Mr. Kwok. Nevertheless, the findings prove to be a alarming discovery worthy to be noted. This paper diagnoses the most recent housing bubble threat in Hong Kong. The effectiveness of public housing in moderating private home prices is analysed using a cointegration and error correction model. The models find that house prices in the last 4 to 5 years are not in line with its fundamentals, and the market has a tendency of unsustainable bubble. Public housing has a statistically significant effect at curbing prices in the short run, but the size of the impact is so small as to immaterial. The effect becomes insignificant post 2003, and is ineffective at influencing the luxury market. The results imply that curbing long run house prices can be difficult as relevant fundamentals are hard to alter directly. Restricting mortgage loan is a possible alternative policy for reducing price growth in the short run.

Introduction

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Concern for housing bubbles is not new for Hong Kong. Salient features of limited land supply and high population density characterize the city. Housing costs comprised approximately 32% of Hong Kong’s CPI basket. Understanding real estate market risk has been the central focus for achieving economic stability in Hong Kong. The city suffered from

a housing bubble in the early 1990s and it busted in 1997 following the Asian financial crisis, where property prices plunged by 66%. As house prices recently skyrocketed beyond the peaks in 1997, the danger of history repeating itself is on the horizon. Eyes are on the HKSAR government and HKMA to improve afforability and cool down market fever. This research is motivated by the 2015 policy address. Regarding the situation, the government announced a new home target of 480,000 units over the next decade, with 60% being public housing. Public housing accounts for over 45% of the total residential units in Hong Kong, and certainly plays a vital role in the crusade to curb private home prices. Previous researches have primarily focused on examining the misalignment between house prices and its fundamentals. On top of diagnosing the most recent bubble, this paper will add to the existing literature by analyzing the effectiveness of expanding public housing units in moderating private home prices. A question that lies at the heart of all housing bubble studies - how does one determine whether the sharp growth in price is a result of demand-supply interactions or a sign of unsustainable threats? Stiglitz (1990) argued, “If the reason that the price is high today is only because investors believe that the selling price will be high tomorrow—when “fundamental” factors do not seem to justify such a price—then a bubble exists.” Abraham and Hendershott (1996) investigated housing bubbles in 30 metropolitan cities by modeling house prices with fundamentals, plus a bubble builder and buster term. Karla et al. (2000) adopted the model to justify the bubble in Hong Kong during the 1990s. Their results demonstrated that price movements in Hong Kong had a proclivity for speculative bubbles. More recently, Leung, Chow and Han (2008) discovered a robust long run relationship between real property prices of Hong Kong and its fundamentals, including real GDP per capita, the real interest rate, land supply and the residential investment deflator. They concluded iproving economic fundamentals fuelled the surge largely, and the risk of overheating would likely diminish in light of the global economic slump.

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land supply and the residential investment deflator. They concluded improving economic fundamentals fuelled the surge largely, and the risk of overheating would likely diminish in light of the global economic slump. Craig and Hua (2011)’s report on Hong Kong noted the lack of long run effectiveness of government policies. Price inflation slowed in the two months after a tighter loan-to-value ratio (LTV)4 and Special Stamp Duty (SSD)5 but rebounded quickly. The short-lived impact of these policies was confirmed in their error correction model. The effect of the latter is so small as to immaterial. Nonetheless, more than 60% of the deviation dissipates within one quarter. The authors dismissed the existence of a bubble. Furthermore, land supply appears as the second most influential fundamental in the long run, following real GDP per capita, but operates with a significant lag. This implies future policies should focus on raising land supply. Surprisingly, very limited studies have been conducted on public housing in relation to private home prices, and the lack of research is not limited to Hong Kong. One of the relevant researches by Yunus et al. (2010) examined the linkages between the private and public housing market in various countries including Australia, the Netherlands, the UK, and the US. They discovered a stable long run relationship between prices of the two for all countries, and they do not deviate from one another. The relationship is statistically strong and indicates that households perceive public housing as a substitute for private housing over the long run. Their causality tests suggested that shocks in the public housing market would affect the private housing market positively, but not the reverse. The public housing market leads the price discovery mechanism but is not led by its counterpart. This paper serves to continue the investigation of the most recent housing bubble, as most past studies only took data up to 2010. The effectiveness of expanding public housing units in reducing private home prices is assessed.

Conclusion Evidence of a housing bubble

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Findings from the statistical models and figure 2.1, 2.2 (see appendix) point to the same conclusion: Hong Kong’s housing market has a proclivity of unsustainable bubble. Over the last 4 to 5 years, the adjustment speed has decelerated. Both markets have very sluggish adjustment to price deviation in the short run. The luxury market has relatively faster adjustment, but is still significantly slower than estimates reported by other studies. Nonetheless,

market fever seems to be cooling down gradually for the luxury market due to rising vacancy rate, and the major concern lies in the non-luxury segment. The overall market is particularly worrying. Only 9% of the deviation adjusts within one quarter, and adjustment is insignificant on the subsample, indicating that market conditions have exacerbated post 2003. A slow adjustment speed means the market cannot absorb any shocks in time and swiftly return to equilibrium level. Not only is excess volatility likely to accumulate, the overall market is vulnerable to any adverse external shocks too.

The effectiveness of public housing expansion There is little evidence in support of moderating house prices with expanding public housing units. Indeed it has an effect in lowering house price growth in the overall market, but the magnitude is so small as to immaterial. Residents have to wait for years to be allocated into public housing. A 10% increase in public housing production lowers real house price growth by 0.09 percentage point. The minute effect is potentially explained by the long waiting period. According to the Hong Kong Housing Authority, there were approximately 147,000 general applications for public housing in December 2015. Processing a large number of applications and allocating residents can be time-consuming. The average waiting time for general applicants is 3.7 years. A significant time lag exists in the effect of newly produced public housing, as they are not immediately available upon completion. Hence, public housing production has a weak contemporaneous effect on price growth, and ineffective post 2003. Furthermore, it has no influence upon the luxury market, which is consistent with the initial hypothesis.

instantaneous effect. Unlike public housing, gross mortgage does not operate with a significant lag, and any changes should impact the market immediately. In practise, it requires a huge cut in mortgage availability. Other complications exist too. Massively reducing mortgage approval can worsen affordability, and pushes the housing market into recession. This would require prudential execution to yield the desired outcome.

Further studies It is worthwhile to revisit this topic in a few year's time. Hong Kong undergoes major macroeconomic and political changes at the moment. It is questionable whether the same results will apply in the near future, and hopefully a more affirmative conclusion can be drawn with additional observations.

Appendix 1. Housing bubble table 2.1

Appendix 2. Housing bubble table 2.2

Policy implications The cointegration models implied that controlling house prices in the long run could be difficult. The two fundamentals that the government can directly manipulate are land supply and the prime-lending rate. The former has an ambiguous effect, and the latter is insignificant. This would mean it is more appropriate to focus on curbing short run price growth. A possible policy tool the govenrment should consider is gross mortgage, a significant and sample-insensitive short run factor. Restricting gross mortgage would be more effective at moderating market fever than expanding public housing. The advantage of manipulating gross mortgage lies in its

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Hong Kong: A desirable location for retirement? By Justin Chung

U

niversal retirement protection, an age old debate between the elite and the needy. Hong Kong is often called ‘a cauldron where east meets west’. On the face of it, our Chinese background concerns us with our filial relations, a respect for the elder generations, whilst Western Capitalism dictates that ‘every man should fend (earn) for himself ’. However, the underlying truth is that the complexities and contradictions nowadays are far greater than a few decades back when Universal retirement protection was first proposed in Hong Kong. Will a sustainable yet inclusive retirement protection scheme be practical for our ever-growing elderly population? Is It feasible at all? More importantly, is Hong Kong a good city for people to spend their later years in? Ever since the establishment of C Y Leung’s administration, Hong Kong has been plagued with bills and proposals of motions that struggle to pass in the Legislative Council of Hong Kong (LegCo). Even if they eventually passed, it would be through the termination of filibusters initiated by non-Beijing conforming members of legco. Moreover, the motions often polarise the legco members, and their supporters in society; forcing Beijing loyalists and pan-democrats into a debate bloodbath. If one follows or has been 20 following the political news in Hong Kong, they can

easily name a few of these controversial motions, National and Moral education in 2012, Copyright amendment bill 2014 (neatly coined ‘internet article 23’), the Guangzhou-Shenzhen-Hong Kong Express Rail Link (Hong Kong Section) and so on. Recently, the government of Hong Kong initiated a consultation document titled as ‘retirement protection: Forging Ahead’. The proposed schemes both received their fair amount of support and backlash. The Social Welfare department proposed two different approaches to retirement protection, namely, universal ‘regardless of rich or poor’ and non-universal approach for ‘those with financial needs’. The government repeatedly displayed their reserved attitude towards the ‘regardless of rich or poor’ approach. Chief Secretary for Administration Carrie Lam reiterated the lack of sustainability in many public consultation sessions, pointing out the predicted difference of over 50 billion Hong Kong Dollars in government expenditure in 2064 by adopting the different schemes. This was reinforced by the financial secretary John Tsang, who also called on the difference in financial burden, and the need for raising income and profit taxes. On the face of it, many feel that the government officials were attempting a coherent effort of

scaremongering the public, to discourage against the universal approach. Amongst this outcry for the ‘demo-grant’ proposal include that of Professor Nelson Chow, whom the government invited to do a research on retirement protection back in 2014. He claims that ‘the government is trying to get people not to support a universal protection scheme’, while Carrie Lam attacked Chow for not ‘fully understanding the concept and management of public finances’. Moreover, the ‘Alliance for Universal Pension’ adheres to Chow’s views, outlining the purpose of the scheme of preventing poverty in the retired cohort. They deem that poverty alleviation should be dealt with through other means. Meanwhile in Legco, it could be argued that the members opinions are conflicting because they have to be; Beijing-loyalists, who find a need to defend any schemes the government proposes, are by nature countered by the pan-democratic camp. Besides the vested interests of Legco members, the points they use to further their arguments still nonetheless reflect the underlying differences in our society. Such differences perhaps arise between ‘those with financial needs’ (whose assets less than $80,000), against the views of the more privileged cohort who will bear most of the 8.3% and 4.2% increase in income and profit taxes respectively. The implication from recent social movements shows that Hong Kong’s elder working cohort is also inclined to line up against the younger generations, who seem to have developed greater interests in social political issues. Student-led movements such as those organised by Scholarism and Hong Kong Federation of Students against the National and Moral education in 2012 and the 8.31 National People’s Congress decision (The Umbrella movement) in 2014 have demonstrated growing political interest in the youth. It is not the purpose of this article to criticise this interest, but to identify the growing trend, and the existence of widening views between age groups. Another incident which helps unveil this tension was the Leaked recording of Arthur Li commenting on Johannes Chan deputy chief dispute. In conclusion, apart from the inimical statistics that the Government Information Services put out to the public, the inherent social differences might also serve as a deterrence towards retirement in Hong Kong. Ultimately, whether you are a teenager, young adult or a middle aged person about to retire from work, whether you are a student or part of the workforce, blindly following empirical predictions in making decisions of this kind is ill-advised. Hong Kong is, without doubt, a wounded society, and hopefully these wounds will heal to make Hong Kong a better option for retirement as a whole.

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I

t seems to be a tradition for every Chinese leader to leave their unique mark in the history books. From the ancient Qin emperor uniting China, to Mao’s ideologies and Deng’s economic reforms, Xi Jinping, arguably the most powerful leader since Deng Xiaoping, is no different. Xi is not satisfied with China being one of the world’s largest economies. Xi wants more power and influence. Xi wants China to become the world leader, both economically and politically. He wants total control over China, but he also seeks exasperating influence over the world. Since the fall of the Soviet Union and the Eastern Bloc, there has not been an international power that paralleled with the United States or the NATO powers. But ‘One Belt One Road’ maybe Xi’s path to establishing China as a superpower. Xi’s bold ambitions are emulated in this strategic foreign policy concept of such epic scale. First proposed in a speech in 2013, ‘One Belt One Road’ intends to revive the ancient silk road, stretching across Asia, reaching both Europe and Africa. There are two parts to the strategy: the “Silk Road Economic belt” on land, and the “Maritime Silk Road” across the oceans. Since Xi assumed power, he has made several important foreign trips, including Africa and the U.S. in 2013, Western Europe and Southeast Asia in 2014, as well as Russia and Central Asia in 2015, to strengthen economic relations and promote China’s economic policies. So far, over 50 nations have expressed their interest in being part of Xi’s master

The Crossroad Ahead-

‘One Belt One Road’ is an ideology that extends way beyond trade. The plan, accounting for almost two thirds of the world’s population and almost 30% of the global economy. If successful, ‘One Belt One Road’ will significantly increase China’s exports of goods and services, including infrastructure construction in Central Asia and Africa, as well as goods which China has excess production capacity in, such as steel. Chinese authorities set five major goals for the nations involved itechnology will not only improve trade infrastructure flow and social assimilation between nations. By enhancing economic and political relations with surrounding nations at the western and southern borders, China can counteract the United States and its allies Japan and South Korea, increasing a more influential presence in the pacific. China’s export of railway and construction technology will not only improve trade infrastructure in developing countries, but also allow such technology to develop up to international standards. The establishment of the Asian Infrastructure Investment Bank (AIIB), headquartered in Beijing, strengthens economic and political ties

Hong Kong’s direction in One Belt One Road By King Yeung Luk and Boyle Kir

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between China and neighbouring developing countries in Central Asia and the Middle East, allowing Chinese investors and companies to establish their international presence. This may also be the first step for China in establishing the RMB as a major international currency, one that can match, or perhaps even replace, the US Dollar. So what is in it for Hong Kong? For the past several decades, Hong Kong has been a gateway into the rapidly growing Chinese market for many foreign investors. As a natural geographical port, Hong Kong has largely benefitted economically as a trade hub from the globalisation and opening of the Chinese economy. Naturally, Hong Kong’s rule of law, highly skilled labour force, non-interventionist market policies have attracted multinational corporations to set up their regional base in the city. These attractive qualities should undoubtedly attract even more firms to Hong Kong as ‘One Best One Road’ continues to expand Chinese trade. Martin Liao, a LegCo Member representing the Commercial (Sec"So what is in it for Hong ond) functional constitKong? " What makes Hong uency, stated in a recent article that the developKong different to other citment blueprint for ‘One ies within China, or other Belt One Road’ includes a broad range of indus- countries involved in the epic tries including transscheme?" portation technologies, port infrastructure and e-commerce, many of which are specialised industries in Hong Kong and are therefore advantageous. He also stated that given Hong Kong is the largest off-shore dealers of RMB, and has an established financial sector with a reputation of highly skilled professionals, reliable regulatory system, as well as an efficient structure, the city undoubtedly has the ability to become the financial hub for the nations involved in the ‘One Belt One Road’ initiative. Taken at face value there seems to be great benefits to be reaped. But are there any risks? Is the ambitious idea itself even plausible given China’s current domestic economic troubles? What makes Hong Kong different to other cities within China, or other countries involved in the epic scheme? We can first consider the historical development of the original silk road - the exchange of culture and elements of civilisation far exceeded that of the trade of goods, the economic benefits of which were mythically exaggerated by contemporary belief. The Silk Road itself was also not created nor implemented by China; it merely occurred as a result of expansion of the Western communities, and Middle Eastern empires. To complete a dominant role in establishing a large scale trade route only by one country seems out of reach.

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China is more interested in developing their own special economic zones such as Shenzhen and Shanghai far more than they are interested in expanding the trade of Hong Kong. Shenzhen has already overtaken Hong Kong as the main export hub of China, and the trend is clear that Hong Kong’s value as a re-exporter is increasingly losing competitiveness and appeal. Deutsche Bank predicts that the volume of cargo moving through Hong Kong will decline as much as 50 percent over the next decade. Whilst Leung sees Hong Kong playing a big part in Xi’s plans, it seems this attraction is unrequited by Xi. In addition to this, Hong Kong has not been included as a founding member of the AIIB, but rather only participated through joining the delegation, highlighting the role that Hong Kong will play and how China views Hong Kong not as a separate financial entity, but merely a part of China. The international financial exposure of Hong Kong is perhaps best marked by the HSBC Group, yet the Hong Kong originated bank is now facing global shrinkage especially in developing countries while the Bank of China continues to increase offices across the world. Put together, even given a hypothetical success of the One Belt One Road, it seems that Hong Kong, was not, and is not an emphasis of the Chinese government.

China’s ability to execute the plan shows some clear flaws as well. More recently, Li Keqiang and Beijing has reduced their emphasis on the term, and some estimate that they would rather focus on domestic problems than march onto their expansive external growth. This seems more logical, as the Chinese GDP per capita still lies under USD$10,000 and ranks 121, below Cuba, South Africa, Iran and various other developing countries across the world. The equities market has also been under a free falling bear market calling for a fall limiter that allows the government to stop trading if the market falls beyond 10%. Not only does it highlight the overvaluation and confidence driven market of China, it also shows the lack of transparency and credibility with the supreme Chinese power and control. Despite the crouching tiger’s roaring ambitions, it does have domestic problems that it should ameliorate before speaking of global domination. Surely a country with such pressing internal struggles, there should be

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prioritisation on improving the lives of their own before attempting global control and trade. The glamourous plan itself, has failed to live up to the name. “If we want to talk to the Silk Road, we don’t know who to call” were the words from a neighbouring state. Ambiguity and confusion plagues the strategy, and there is no indication of how the policy will be executed, implemented, or how countries will be involved. The rule of law, the Renminbi and the business culture are still very different to the rest of the world, and it will take time before there can be a simplistic integration and assimilation of the Chinese system and their intended trading partners. The optimism of Xi’s plans can also already be hinted by their failed attempts to sell high-speed trains to Indonesia, reportedly being beaten by Japan, perhaps their strongest rival within the Asian region.

Beyond the many doubts regarding the abilities of China, there also lies flaws towards Hong Kong’s plans to integrate with the plan. CY Leung mentioned the One Belt One Road policy over 48 times in his fourth policy address, but the one-sided involvement from Leung was not reciprocated by Beijing itself.

Hong Kong currently faces the most important decision it has come across since the handover. Should it neglect local dissatisfaction and social conflicts and proceed with further Chinese economic integration? Or should Hong Kong ride the wave and benefit from Chinese commercial growth? Leung will continue to claim One Belt One Road leads us to great pathways, and will strive for increasing integration between China and Hong Kong. There will be little the politically apathetic citizens of Hong Kong will do, and the innate herd mentality of the public will accept Leung’s policies one by one. We will accept the grandiose claims that it will bring us prosperity, we will accept the defeatist comments that we are dependent on China, we will forget the education and Western systems that has bred the talents of our successful generation, and we will soon, inevitably assimilate into the Chinese way of life. There are many doubts, but above all is the possibility that One Belt One Road’s claimed economic benefit will not truly bring wealth to Hong Kong. Rather, it will bring control. Xi, as explained before, wants control, and Leung, would happily pass it over. The claimed fifty years of no change will dissolve into a myth, one that only naïve, simple-minded Hong Kong citizens would believe in.

But our future is not desolate. There has been an awakening. A crossroad lies ahead, and we must unite in making the decision for our futures. Should we forget what we are proud of, not our golden separation of power, but actually our ability to think. Our great minds were what made us strong, powerful and rich. It was our hard work and belief in dreams. It was the strive for freedom and our desire for excellence. We must not forget our core values, our competitive advantage that makes us great. Among us we have one of the smartest populations in the world, a well-educated, critical-thinking society, capable of wonders. Perhaps this is time to bring upon our Hong Kong spirit, and fight for what we believe in, and not what we are told. We must realise that this exaggerated manifesto of Xi never intended to include us, and Leung’s polemics to cooperate is merely a visage to hide his greater aims. Upholding our motto of WHKPASS, we must carry knowledge and bring action. Hong Kongers, it is time to know, and time to act.

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The Tragedy of Hong Kong’s Development by Victor Hui

From the previous issue about the story of

Hong Kong’s development, this article aims at analysing the sources of Hong Kong’s economic problems by examining the implications of the Industrial Revolution and the Great Divergence that divide the East and the West. China and Great Britain are rich, hugely populated (referring to the labour force’s productivity and efficiency) and both have strong regional political power. The divergence of the two great nations represent the different paths of development, which are agriculture-intensive and labour-intensive production. Yet why did Britain's choice lead to prosperity and modernisation while feudal China chosen path cause inward-looking and ruination? What are the important determinants that marked? Is it the production techniques, institutions or resources that widen the disparities in the early stages of the Industrial Revolution? “Why did the first Industrialisation not occur in China?” Known as the Needham Puzzle, this question is one of the most debated topics in economic history. This article will argue that modern Hong Kong is similar to the two great nations during the early stages of the industrial revolution provided with the existence of the Great Divergence. Countries and regions that are strong in their institutions, production techniques and human capital, will ultimately face the problem of limited resources and trap themselves in secular stagnation, which will slowly cause decline, leading to becoming corrupt and overrun by their relative competitors.

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The Great Divergence is an increasing wealth inequality amongst nations which historically occurred at the beginning of the 15th century,

before the Industrial Revolution took place. Although Kenneth Pomeranz, an American scholar specialised in Economic History was discredited on his accounting framework and methods, his theorisation provides an alternative perspective look at the problem. Most scholars have argued that China did not enforce a complete private property system, but rather oppressed by the state, limiting the growth of capitalism. In Pomeranz’s research, he argues that the research question ought to be ‘Why Britain did not become China?’ Britain could have chosen agriculture-intensive development and he tries to answer why it did not. From historical data in the 1750s, population of both countries have grown rapidly. Britain and the West breach the exogenous constraint on economic development, but China was trapped in a “resource bottleneck”. Early demographists and economist Malthus claimed the four main constraints on industrialisation including food, fuel, fibre and construction materials. Modern dependency theorists further argue that Britain and the West built their colonial system paves the way to breach a resource bottleneck. China on one hand may have escaped the Malthusian trap where population growth and income was stable at a subsistence level in the long-run of the two dynasties Ming and Qing. On the other hand, famine had once occurred in the later Ming Dynasty. It led to instability of governance, negative population growth and opened for Qing to be on the stage of Chinese history. The significance to Hong Kong is the thesis of stagnated social mobility and the decline of the manufacturing sector when the economy transforms from labour-intensive towards knowledge-intensive. Manufacturing jobs were once an important means for mobility. The HK middle class now faces the problem of limited choices into the service sector. Cumulative earnings growth from 1997-2013 was only 14% while during the 70s- 1996 was 139% (Legco, 2015). Capitalism was supposed to encourage wealth-creation driven by successful individuals, like entrepreneurs who possess distinctive capabilities rather than by inherited abilities, who monopolised the forces of social mobilisation. In other words, manufacturing sector was producing wealth while with the service industry in Hong Kong was consuming.

Now turning to the second part of the article, by examining the early beginnings of the Great Divergence may provide some profound implications in the understanding of the Industrial Revolution and modern Hong Kong. Nearly one-third of the European population was killed in the Black Death plague, but the European Miracle emerged out of the darkness of the Medieval. It began with the rise of the Renaissance, evolution in science and technology, ultimately building the foundation for the Enlightenment and the Industrial Revolution of modernisation.

Replacing wood by coal (An energy revolution that was never sustained?) In the early Song Dynasty of China, coal had once been utilised in the mass production of steel. The supply was high and the price was low allowing many farmers to afford it. This helped to increase productivity levels in terms of output tools and techniques. The ultimate outcome was improvement in living standards and political-economic stability which led to a population boom. However, the question ought to be asked is why coal usage was never sustained in the later Ming and Qing Dynasties? The main argument that presented was an unfortunate historical coincidence of an ever increasing external challenge from the northern nomadic tribes to the Central Kingdom’s authority. Furthermore, it was the economic reliance of a single supply-source and failure in the adaptation of change in the search of a new energy source. The North-Eastern regional economy collapsed slowly, where the labour force migrated to the East-Southern part of China. Such economic shift has brought growth and prosperity to the Jiangnan provinces but furthered the geographical distance away from the coal supply of modern day Shanxi and Northeast provinces. Though the Yangtze Deltas regions are the economic powerhouse of the later dynasties, transportation costs constrained the willingness to shift from burning wood back to burning coal. Coal is important in the provision for a more energy efficient mechanisation. No matter how advance China was in economic freedom, in private property protection, and in social reproduction, the rigid constraints of

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limited resources would never have industrialised the economy during that time. In summary, replacing with a new efficient energy source is just a first step to take. The later step is even harder, transforming coal stored power into usable fuel. For this, there is a need for a mechanical invention, the steam engine. Furthermore, Britain on one hand holds innate advantage of natural resources distribution. Many of its coal mines are next to a natural port. They could be circulated into exchange at a lower unit cost by sea transportation. On the other hand, the development of steam engine started with a simple purpose: to pump water out of the coal mine. The machine was heavy, huge, and inefficient in coal burning. The market value was low but provided opportunities for modification. Britain’s patience was not wasted. The discoveries from other manufacturing fields can be transferred into modifying the steam engine. The later progress in Precision Manufacturing Technology, such as the making of the apparatus like clocks, watches and guns that includes two important techniques, precision drilling and calibration technology. Steam engine therefore becomes smaller, efficient and valuable. Even though the techniques, the institution, and human capital are important determinants, without sufficient natural resources it is hard to proceed further development. Whilst a majority of the British labour force in factories created a shortage of workers in the farming sector, Britain may have faced a possible decline in the early stages in the industrial revolution, where the manufacturing population had to coordinate back to the primary sector. However, when wages cannot catch up with an exponential growth in food prices, the workers in factories will shift back to grow crops instead. Furthermore, Pomeranz also criticised western academia from avoiding the topic of colonialism that helped to sustain the industrial revolution of the Western World. With a greater understanding of the origins of the Great Divergence and the foundations of the industrial revolution, Hong Kong is seen to be a combination of the two. On the one hand, the fiscal state of the Song Dynasty is similar to modern HK, encouraging business activities and trading through a stable tax rate. Hong Kong, a small but open and inclusive economy, will face

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to service, deindustrialised the basis of the economy. It creates a hegemonic power in reliance on the pillar industries, in term of its contributions in employment and GDP growth. That said, in the past-decades little progress has been made and Hong Kong is in need of a new source of growth in making the economy more dynamic.

Swot of HK

Internal/ Present

On the other hand, like the Song and Ming Dynasties, political instability and the unstable political climate has polarised our society. The agency governability is harming our political and economic system that was actually functional. Furthermore, the majority of the Hong Kong population cannot afford the propped up property prices. Citizens need to have home ownership and to satisfy a basic human need - shelter. Finally, if social mobility has stopped then Hong Kong could possibly be trapped in a secular stagnation. Innate advantages need to be utilised once again. Hong Kong cannot afford to be inward looking, it needs to face outward to the maritime. Re-industrialisation and “Made in Hong Kong” can be one of the methods. Not the smoky chimneys of the 60s and 70s, but rather towards intelligence production. In other words, Hong Kong needs to up the vision and initiative to adopt “Industrie 4.0”, a concept currently developing in Germany. We need successful entrepreneurs to invest in Hong Kong. Programmes that are “meaningful” to guide the future generation of Hong Kong.

Strengths Geographical Advantage: The success of Hong Kong is rooted in its self-positioning – access to China and the Seas. Reinforced by a vast business networks platform, Hong Kong is super-connector. Re-exports has been a historical business. From the Song Dynasty of incense trading to modern day the Pearl of the Orient, Hong Kong is one of the world’s financial hub and provision of professional services. The Economy: From the Economic Freedom Index 2016, Hong Kong ranked at the top of the list. Shows Hong Kong’s society is economically free, where individuals are free to consume, produce and invest, and the right to supply labour and control private property. A small but open trading port follows the option (from the Impossible Trinity) of free capital mobility and a stable fixed exchange rate. At the same time, it gave up the ability to implement independent monetary policy decision. In other words, Hong Kong will follow US Fed’s decisions. Strong in its institutions, the rule of law and human capital makes Hong Kong adapt fast pace changes in a globalised knowledge-intensive world economy. The Government: The government inherited from the colonial times, continue the very fundamental rule of thumb of low-and-simple-tax regime and progressive non-interventionist stand on the economy. Supporting business activities via strong enforcement of the law, maintain strong infrastructure, investing in R&D, and thus communicate frequently with business leaders.

Opportunities External/ Future

Using its geographical advantage: Economic Expansionism Hong Kong needs to enhance collaboration with the Asian Tigers, Singapore, Taiwan and South Korea. This can be done by ease of trade, such as more free-trade agreements and regional specialisation/ division of labour. By making Hong Kong firms internationalise in the Middle-East and South East Asia regions, more Hong Kong owned TNCs can be competitive in the world’s market by expanding horizontally (Mergers and Acquisitions) and vertically (reaching a joint-venture agreement, reduce unnecessary competitive pressure in Hong Kong and more price-setting power in other markets) Towards “Made in Hong Kong”, an Asia Fashion capital: Diversification of the pillar industries- A growing focus in R&D and commercialisation of high-tech products, establishing the IT Bureau. The revival of the textile industry by bringing more awareness to Hong Kong Fashion Week. Many international firms are using Hong Kong to promote their products. For example, Brazil’s is utilising Hong Kong’s trade platform to promote their textiles and clothing goods to the mainland. Remanufacture clothing and producing technological goods can lead to the Possibility of Re-industrialisation in the long-term so that scarce resources can be allocated efficiently from regional and domestic balances.

Weaknesses Lack of Land: Hong Kong is naturally constrained by limited resources and space, so it becomes too dependent on imports and other economies. It focuses on a clear division of labour at the knowledge side of the economy but forgets the fundamental building blocks of human capital, satisfying the basic needs of sheltering the people. Though knowledge can help to solve the natural resources paradox, it is hard to forget the reality that Hong Kong lacks the capacity to be self-sufficient in the primary sector (basic needs, electricity and water). The opportunity cost to have self-sufficient supply is far lesser than being dependent on others. The famous British economist Keynes once argued that “If you beggar your neighbour (and trading partner), you might very well beggar yourself. Keynes saw the world learn that lesson the hard way in the years after World War I, that economies and states are deeply unpredictable.

Threats Internally, another property bubble may lead to another housing crisis and a downturn in the economy. There has been an awakening in other financial centres from both mainland and the world regarding ever-rising property prices. Hong Kong is fragile in the lack of economic diversity and dynamics. The possibility of replacement is a reality we need to consider. In addition, reconciliation needs to become a consensus so that social polarisation and tension can be healed. All stakeholders need to realise they all have responsibility for the paradoxical scenes. And Hong Kong must walk its own path. External regional conflicts and disruption in trade routes can have a domino effect on the internal operation of society and the economy.

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Nationalism is the Chinese prejudice “Taiwan is an unalienable part of China and every pro-independence activism in Taiwan shall be destroyed. These separatists will be despised by the future history textbooks.” A Chinese Liaison Office mandarin lectured me in a supposedly casual conversation in a Hong Kong cafe.

The rejection of China - what the localist youth of Hong Kong thinks Lim Song Bun

My friend, who invited me to this “thought-sharing exercise” between the youth of Hong Kong and Chinese Liaison office officials, politely reminded me afterwards that this Chinese mandarin’s views actually represented the moderates’ thoughts within the Beijing camp. At the time, I happened to have conducted a survey among Hong Kong students who are studying in Universities at the time. One of the questions in the survey is “would you support Hong Kong independence?” Around 20% of the students said “yes.” I casually mentioned this result to the mandarin, and he was visibly startled for a brief moment before recovering quickly. He mechanically questioned the validity of the survey and dismissed “this is just an exaggeration of a very small number of students who are manipulated by a corrupted media. Chinese people are a single people united in a belief of one country and a strong government.” The nationalistic ideology has barricaded Chinese officials, even those in the Liaison office, from understanding the real world around them. It does not help that they often indulge in their own propaganda, as the mandarin I conversed with quoted from the Wenweipao and Taikungpao liberally, as if it is a reliable source of news that reflects what Hong Konger’s think. From what I see: the call for Hong Kong independence is imminent. The Chinese saw it too late, they are indulged by their own bluff. The Hong Kong identity and the collapse of the old discourse The line should be drawn on July 1st, 2003. Before that, we can argue that Beijing has shown greater restraint when exercising their powers in Hong Kong. After the protests of 2003, which saw the humiliation of the Hong Kong government in failing to legislate the equivalent of the Patriots Act in Hong Kong, Beijing has tightened its control on Hong Kong. Since then, we see the tightening of media, election

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frauds, corruption of the committee system, not living up to (or distortion of ) political reform promises, excessive use of force against protesters and the list goes on. The naïve approach to suppress a region with such a strong civil society has led to short term victories for Beijing. Indeed, the freedom of press has dwindled, and there is only one mainstream media left that is openly against Beijing. However, those people who are dissatisfied with Beijing’s rule but have no voice in mainstream media, have resorted to go online. Internet is a place that embraces diversities and subcultures, and through it, the identity of Hong Kong has found the vehicle to blossom. In the past years, we have seen a rapid transition of the paradigm of political discourse in Hong Kong. Many pro-democratic parties in Hong Kong were often too careful of being critical of China. The long-time dominant voice of the pan-democrats is the Democratic Party, which focuses on the manifesto that the Hong Konger’s responsibility in bringing democracy in both Hong Kong and China, which is the Missio-dei of the political parties that originated from the patriotic movements in the 1970s. This is bluntly rebutted by Chin Wan in 2012, the enigmatic Ethnology professor in his brilliant work “City-State Theory,” which maintains that a democratic China with such high levels of nationalisms would only spill troubles for Hong Kong. He argues that Chinese democracy with mandates from a highly populist-nationalist people could only give legitimacy in having tyranny of the majority over Hong Kong. He believes that rebuilding Chinese democracy is a burden too big for Hong Kong to carry, and only the Chinese people can bring democracy to themselves. Those who agree with Chin Wan rallied under the “Localism” banner, and advocated that Hong Kong politics should be focusing more on Hong Kong and care less about the interests of Beijing. In short, this is to recognize Hong Kong has an independent city-state entity and understands how to leverage its interest between the power brokerages between China and America. The most ideal political state of Hong Kong, Chin argued, is to have a Chinese federal government with Hong Kong has an independent city-state. This is the best chance that the rule of law and a representative government can be administered in Hong Kong. This ignited the imagination of the originally non-existent constitutional discussions in Hong Kong. This

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To renegotiate the social contract Young Hong Kongers feel betrayed by the baby-boomers, not only in a society where it’s hard to break through to the top due to demographic structures; but also in the baby-boomer’s failure in protecting Hong Kong’s rights during the Sino-British negotiations. In the decolonization process from the end of World War II, the British are keen to allow greater local governance in crown colonies from the 1950s onwards and gradually transiting to an independent government. Governor Young, who survived internment in Japanese POW camps, launched the political reform process in Hong Kong in the 1960s, but this is blocked by the Chinese premier Chou En-Lai at the time. The intervention from China and realpolitik considerations of the Foreign and Commonwealth Office are to formulate the fate of Hong Kong in the next 50 years.

also accelerated the downfall of the approach the Democratic Party proposes, which failed to answer any questions related to the de-facto sovereign status of Hong Kong. But who are those who agree with Chin Wan? As recent polls suggest, it is mostly the youth of Hong Kong. Snapshot of the Hong Kong Youth While China is riding on the economic explosion thanks to migrating labour forces from rural areas to industrialized cities and China opening up to the WTO in 2001, the over-confident Chinese Communist Party thought that they have found the magic formula to general good governance. This is encouraged by the cheerleaders on the financial pages of the West, who are desperate for a reliable emerging market from mid-2000 onwards. Yet the truth is, they have never faced the problem of managing a city with a vibrant civil society. Putting all these ingredients together, we can see the mindset of the average Chinese Youth today; confident, optimistic, disregard of the old ways and appreciative of prioritizing economic growth over everything else. The youth of Hong Kong cannot be more opposite. They live in a saturated service-driven economy, with super-rich property tycoons. They have relatively low social mobility, education inflation and a market that focuses only on finance, property and logistics. They enjoy arts with a post-modern theme, they are well versed in the tre the trends of both the East and West and some even became cynical, if not pretentious from it.

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With low fertility rates, it means that the consumer market is stagnant in Hong Kong. The youth of Hong Kong faces the glass-ceiling of middle-management and the forever increasing property prices. They are debt-tied for decades if they decide to buy property and work extremely long hours. All behind this gloomy socio-economic prospects and the futility of post-modern ideas, the Hong Kong youth are deeply dissatisfied by their underrepresentation in the establishment. Inevitably, they find every public policy is passively against them. The waves of criticism begin from the Left. The “Land and the ruling class of Hong Kong” by Alice Poon led the attack. She maintained that the government formed an unholy trinity with property tycoons and Beijing, to reap benefits in Hong Kong by maintaining a policy of high land prices (to be fair, this policy is pioneered during the last years of the British rule). The youth embraced this socio-economic analysis. This gradually fell out of favour, as this view offers little to resolve the situation apart from describing the crony-capitalist setting that Hong Kong is in. The key is that Hong Kong lacked the political power to change under the current political system. Then Chin Wan led the attack from the right, which talked of the more about identity and sub-sovereignty, and even more young Hong Kongers echoed with his views.

Louis Loud is a 24 year old political commentator in Hong Kong. You may disagree with his views- but he is regarded by many as one of the the best Hong Kong authors. He is a normally quiet and speaks in a very calm voice, yet he is famous for incisive, powerful, bold and eliciting essay writing. When you talk to the young political activists in Hong Kong, it used to be Marx, Locke, Mills and Rousseau. Ten years ago, the left still dominates the frontline of activism in Hong Kong. Social democracy is the gold standard of politics that our activists want to achieve. While this is not rejected by the localism activists now, the focus is more on the struggle for identity, culture and sovereignty.

Localism activists like Louis Loud believe that it is meaningless to talk about social democracy without sovereignty or sub-sovereignty. I have met Louis Loud before, and I am mesmerized by his intellectual grasp of Nietzsche, Schopenhauer and Buddhism. He When Margaret Thatcher initiated the Hong Kong speaks very matter-of-factly of the Will. He despises discussions in the late 1970s with Deng Xiaoping, the the moralities upheld by some Hong Kongers who Chinese assured that all rights that Hong Kong people care so little about our sovereign status but so much enjoy under the British will be preserved. Hong Kong about an imposed morality that deems every talk of is barred from the Sino-British discussions. Retrospec- prioritizing the needs of Hong Kong as immoral. tively, the youth of Hong Kong are very unhappy as to why the baby-boomers didn’t do more to fight for a say If you ask me, what is the face of the Hong Kong in the negotiating process. youth who rallies for Localism- I would say, they are people who read Nietzsche and despises Beijing. Hong Kong has been a migrant city before the 1970s, and many of its immigrants have strong Chinese naIf God walked into the room, Nietzsche would stab tionalism beliefs. For the second and third generation him – for his "God is dead" revelation is that humanHong Kongers, however, they care more about what is ity can only become free if it rejects the idea of the happening in Hong Kong. This leads to the ultimate divine. clash of the idea of identity, do we agree with the social contract that was formulated by the baby boomers What next? that identifies with a central Chinese government? The answer is clearly- no. The political stalemate in Hong Kong is unlikely to change by the rise of a Hong Kong identity. News in There is a gradual call for renegotiating the social con- the past 4 years seem to point towards the opposite ditract, in opposed to maintaining the Basic Law, which rection, where both sides are gradually taking a more is a constitution-like document but is often overridden hawkish approach. by Chinese court decisions. It would be practically difficult to petition against There is a gradual call for renegotiating the social con- Beijing, which has economical and and militarily tract, in opposed to maintaining the Basic Law, which dominance over Hong Kong. However, Hong Kong is a constitution-like document but is often overridden is not without its bargaining powers. The recentby Chinese court decisions. ly leaked Panama papers suggest that Hong Kong has one of the highest volume of money-laundering Hong Kongers who read Nietzsche and Schopenactivities in the world. The maturity of our financial hauer system is one that China finds difficult to catch up with for decades. Many prominent Chinese politiA lot of localism supporters might appeal to the eupho- cal figures have family members who became Hong ria of a “us-versus-them” mindset, which sometimes Kong Citizens to transfer funds to overseas assets. borderline on racism. This is one of the reasons why The importance of Hong Kong’s financial services to Localism draws criticism, but it is rash to reject the China is often gravely underestimated by those who whole movement.

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our eam t Editor-in-chief Nicole Chan

are awed by China’s recent success in other areas. Secondly, China is not without its problems. Export and investments have been decreasing in China for the past years; and Chinese growth requires a strong and emerging consumption led of its middle class. It is unclear how this growth can be maintained in the long run, as China lacks a transparent political system and the rule of Law. The conventional wisdom is that, it is difficult to have a genuinely efficient entrepreneurial environment without a fairer society with fairer rules. From these two observations, there are generally three views among young localists of what will happen next. Firstly, China will continue to be more and more powerful domestically and interationally. In this scenario, Hong Kong will be gradually marginalised as it has less bargaining power with Beijing. Beijing will not concede to any of Hong Konger's demand. The tensions will continue to rise, and neither side could break through.

The third outcome is catastrophic for both Hong Kong and China. China will enter an apocalyptic downfall but there isn’t sufficient belief in self-determination in Hong Kong. Hong Kong will be defenseless against the prevailing nationalistic ideas and be involved with the turmoils in China. Perhaps we have gone too far in this discussion and still many people in the East and West are still optimistic about China’s long term development. However, this is what are in the minds of some of the Hong Kong youth today. It is not the business as usual, daily politics that concern them; it is the macro-history, the social contract and “what-if’s” that concern them most. Yet behind the what-if’s, I see the young people’s determination to stab at the “Chinese identity”- they believe they can only be free if they reject it unreservedly.

Executive editor Boyle Kir Administrative editors Neville Lai Victor Hui Creative directors Michelle Lam Edith Li Cover design by Alison Pong (CSM, UAL '17)

Secondly, China will enter an apocalyptic downfall, where it no longer is able to contain the social tensions it has suppressed in the past decades with its slowing economy. In this case, Hong Kong with sufficient belief of self-identity, can proceed to a route of self-determination.This might lead to a clearer federal relationship with China or even Independence. The Chinese elite would actually welcome this outcome, as they have so much interest in Hong Kong over the years and maintaining the rule of law is more important than superficial nationalist idiocracies.

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A publication supported by Warwick SU project fund

Passtimes Issue 9 2016  

Passtimes Issue 9 2016  

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