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The other side of Hong Kong's boom

By Hilary Whiteman, CNN
updated 6:52 AM EDT, Mon July 2, 2012
Life is hard for low income earners in Hong Kong as booming house prices push up the cost of rent. Outside metro stations, elderly women collect free daily newspapers discarded by commuters which they then sell to earn some money. Life is hard for low income earners in Hong Kong as booming house prices push up the cost of rent. Outside metro stations, elderly women collect free daily newspapers discarded by commuters which they then sell to earn some money.
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Hong Kong's wealth divide
Hong Kong's wealth divide
Hong Kong's wealth divide
Hong Kong's wealth divide
Hong Kong's wealth divide
Hong Kong's wealth divide
Hong Kong's wealth divide
Hong Kong's wealth divide
Hong Kong's wealth divide
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STORY HIGHLIGHTS
  • July 1 marks 15 years since the handover of Hong Kong to Chinese rule
  • Living conditions for poorest residents have declined in recent years
  • Rising rental costs are eating into family budgets, according to government figures
  • Population is growing older, fertility rate is among the lowest in the world

Hong Kong (CNN) -- Mary carefully eases open her front door to avoid squashing her small dog and alarming her pet bird, which starts squawking even before she put the key in the lock.

Her snake is sleeping soundly in the kitchen.

The 70-year-old's menagerie is crammed into the two-bedroom flat in central Hong Kong she shares with her son, a 39-year-old bachelor she affectionately refers to as "my boy."

"Sometimes it's more work being out," she said, mopping up a puddle of dog pee near the kitchen door.

Basic and homely, the flat measures 569 square feet and, according to local property websites, is worth more than HK$5 million ($644,400) to buy, or around HK$20,000 (US$2,577) each month to rent.

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"If I didn't buy the flat at the time, I think now, I cannot afford. Because the price goes up, double," said Mary, who would prefer her surname wasn't published. Mary can't remember exactly when she bought it. Maybe she said it was "10, 15 years ago."

On July 1, Hong Kong marks 15 years since its handover from British to Chinese rule. The Special Administrative Region (S.A.R) of China is governed by a chief executive, the latest of whom, Leung Chun-ying, or CY Leung, will formally take over the role on the same day.

Leung has a tough task ahead of him in balancing the demands of the Hong Kong population, along with the influence, explicitly stated or not, of the central leadership in Beijing. In the days before his formal elevation to the role of CEO, Leung made local newspaper headlines with his repeated apologies for six illegal structures at his lavish home on Victoria Peak.

The upmarket area on the lush mountain behind Hong Kong Island's gritty urban heart is a world away for many locals, some of whom work long hours to earn less each day than the cost of a cup of coffee in a Western café. They don't need the United Nations to tell them that the city has one of the largest wealth gaps in the world.

In Sai Ying Pun, a suburb located about a 10-minutes walk from the city center on Hong Kong Island, a new development towers above the bustling local wet market where locals stock up on seafood and vegetables, mostly imported from China.

Within the development, three-bedroom flats are advertised for monthly rent for as much as $64,000 (U.S. $8,200), more than three times the median monthly domestic household income of $18,000. There's a pool and free coffee and Oreo cookies are provided for tenants on the weekend.

Across the road inside the wet market, Carmen, 56, tidies piles of spring onions at the stall she inherited after her mother's death in 1999. Not much had changed since the 1997 handover, she said, though stricter rules had forced vendors to move indoors. "In bad weather this is a good place, but as far as business is concerned, business is not so good," she said. She sells a couple of cobs of corn for $10 (U.S. $1.28).

A few stalls away, Wong Miu Ping jostles with shoppers who are crowding around a tray of vegetables. She's a friend of Mary's in her early 70s, and the two conduct a quick-fire conversation in Cantonese before turning to the question of how life has changed since the handover.

"The medical, they don't have enough hands to do the job," Mary translates. "She's retiring, she's living on the little money she's saved. Housing becomes a big problem, even the young people. They dare not to have babies," she said.

Housing becomes a big problem, even the young people. They dare not to have babies
Wong Miu Ping

Hong Kong's fertility rate is one of the lowest in the world, with just 1.10 births per woman in 2010, according to government statistics. It's not clear from the numbers whether couples are choosing not to have children, but what is apparent is that Hong Kong's population of seven million is rapidly aging and the birthrate's not high enough to keep the population steady.

By 2030, around one quarter of Hong Kong's total population is expected to be over 65, according to the Steering Committee on Population Policy.

Many of the elderly are members of low-income households whose occupants are suffering from a lack of government spending on social services, according to a report on Hong Kong's Social Development Index published in March 2012.

"The government has a substantial amount of foreign reserve but has never adequately invested in social development, thereby sharing the fruits of economic growth with the people," the report said, adding that the living standards of the city's poorest citizens had fallen in recent years.

"Low income people experienced further deterioration in basic living, compared to year 2008, in terms of expenditure on housing and food, employment and housing condition," the report said.

There's little state support for the elderly. Residents between the ages of 65 and 69 can apply for benefits but approval depends on income and assets. That changes once they're over 70, but either way each provides just over HK$1,000 (U.S. $129) a month.

Mary may own her flat and have four children who help support her, yet she has high medical bills from a fall sustained a few years ago and watches every dollar. On boarding a public mini bus she tells the driver exactly where she wants to get off so he amends the price to $3.90, a saving of 70 Hong Kong or 9 U.S. cents.

As she approaches her stop, she checks the traffic lights to see if they're likely to turn red. They linger on green so she gets off early, struggling down the stairs with her walking stick. She says she's worried about making the driver angry if she asks him to stop again, up the hill.

"Hong Kong people are living under such stress," she explained. "Because the living cost is high, and it's not easy to earn enough money to upkeep your family."

Hong Kong people are living under such stress... the living cost is high, and it's not easy to earn enough money to upkeep your family
Mary, 70-year-old, Hong Konger

A local cab driver says the same, though while he's happy to talk he doesn't want to be named. "It's getting harder," he said, of making a living. He says he now spends half of his wage on rent.

Many locals blame cashed-up buyers from mainland China for driving up Hong Kong property prices and rent. In the 10 years to 2010, expenditure on housing as a share of total household spending gradually rose to 32.8%, according to government statistics.

Earlier this year, anger over the perception that Hong Kongers were unfairly burdened with extra costs incurred by the Chinese was vented in a full page advertisement in a local newspaper which referred to mainland "locusts."

The ad followed a surge in the number of pregnant mainland women crossing the border to Hong Kong to give birth. In April, incoming chief executive CY Leung announced a ban from next year on mainland women, without a Hong Kong husband, giving birth at local private hospitals.

"It depends on how you see the Chinese people," said Ernie Chu, who runs a pet supplies shop and daily dog-minding service charging $120 (U.S. $15.40) a day, around the corner from the Sai Ying Pun market. "For business it's good because there are a lot of chances to grow the business, but on the other hand it's a burden to Hong Kong."

The government has already introduced measures intended to cool the local housing market, but they have not yet made a major impact on the poorest members of society.

Hong Kong's inflation rate rose 4.3% in May, compared to the same period last year. It was slightly less than the rise recorded the previous month which the government attributed to easing food prices and a smaller increase in private rentals.

Mary declines to be pressed on whether she's hopeful that things may improve for the residents of Hong Kong in the years ahead.

"I'm so old, so I always have to keep my spirit up and I always look at the bright side of things," she said. "I always stand facing the front so my shadow is behind me.

"There's a Chinese saying: You have to believe tomorrow is better. Always have this belief the tomorrow is better."

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