Sustainable Living Hong Kong

If you’re wondering if there’ll be an end to the bad news confronting the world, wonder no longer – for the bankers still rule the world.

Yes, more stringent regulations mean Hong Kong escaped the worst of the 2008-09 crisis, but don’t forget there were still local investors who were misled into buying financial products that lost their life savings. Compensation may have been arranged and the rules may have been updated, but having received a simple letter from one bank asking me to declare myself an “experienced investor” by simply signing and returning that piece of paper, it’s clear that nothing’s really changed for the better.

But that’s not all, ‘cos the bankers who were responsible for the crisis in the first place are still in charge – and in line for hefty bonuses.

If we want the world’s financial system reformed to improve its stability, shouldn’t we look for fresh ideas from people untainted by the failed system’s ideology and practices?

Apparently not. The new head of the European Central Bank, Mario Draghi and the new Italian prime minister, Mario Monti, were respectively a partner and international adviser of Goldman Sachs – yes, the same firm that arranged the credit default swaps used by Greece to hide its debts. That’s right, the firm that had to sell its stake in Industrial & Commercial Bank of China in order to pay back some of the US$10 billion given it by the US Treasury – then headed by another Goldman alumni, Henry Paulson, under the Troubled Asset Recovery Program (Tarp) set up in the wake of the 2008-09 crisis. The firm that lost 98% of Gaddafi’s US$1.3 billion worth of funds. The firm that made a mistake in its warrant prospectus that cost Hong Kong investors but which wouldn’t pay up.

And guess what? Even as Goldman itself issued a highly pessimistic report on the Eurozone’s prospects, it and other investment banks stand to make huge amounts in fees as the European Financial Stability Fund issues billions of Euros worth of bonds in its bid to rescue member states.

The economic outlook may augur ill for most of us; for those who created the crisis though, it’ll be another nice payday.

I’m not talking about those referred to as such in an Apple Daily ad. The locusts I’m talking about hurt ordinary mainlanders and Hong Kongers alike.

The Financial Secretary’s 2012 budget has been criticised for narrowing the tax base by increasing the allowances of middle-class taxpayers, but what is of more concern is not the number of people eligible to pay tax, but the number of people who ought to pay much more but who at the moment are not.

What a frightening idea, eh, for a city that’s used its low tax regime to attract talent from around the world. But think about this: a small number of people have profited hugely thanks to a revenue policy that’s heavily dependent on expensive land to bring funds into government coffers. In order to make a tidy sum after accounting for the high land premium, the property market is manipulated to push prices ever higher. As a result, every resident who has to pay rent or rates or has a mortgage is effectively paying an indirect tax on top of whatever they have to pay in salaries tax.

In the meantime, the profits generated by Hong Kong’s property market has enabled the developers to push aggressively into the mainland property market. You must have heard heartbreaking stories of rural land grabs, forced relocations and violent demolitions, right? Such atrocities aren’t necessarily perpetrated by Hong Kong developers, but industry insiders are well aware of such incidences, especially since Hong Kongers have similar experiences too.

So do we want money extracted from the city used to bully ordinary folks, or do we want something done to get that money put into better use for everyone? The anger that drove the placement of that advertisement in Apple Daily should be directed at the government, for failing to institute long-term reform of its tax policy; and at the developers/landlords who are building luxury flats designed to attract mainlanders with deep pockets as well as throwing out cinema chains in their shopping malls and replacing them with luxury shops. All the profits accrue to the developers/landlords while ordinary people can only hope for jobs that require few skills and offer little security. Unless this problem is addressed, Hong Kong will never resolve the widening wealth gap.

A friend recounted the story of a salesperson who clung on to her even as a sea of mainlanders swirled about the shop where she worked.

She was reluctant to serve them, so she stuck to the only Hong Konger in sight for as long as she could.

You will hear different stories from different people, no doubt about it. Some salespeople will tell you that, yes, mainlanders shout, but Hong Kong customers are more familiar with the channels for making complaints and can get you fired if they’re not happy with your service, which is true too.

With many Hong Kongers still raging over the comments made by Kong Qingdong, voices calling for calm have emerged, including one commentator who pointed out that Hong Kong’s future depends on mainlanders.

He went on to talk about the number of retail jobs created by the boom in mainland visitors. In absolute terms, Hong Kong is certainly doing well on the jobs front. What with all the mega projects hiring construction workers and the retail trade hiring people to serve the visitors, Hong Kong has maintained a consistently low unemployment rate.

But what kind of jobs are these? Do they offer security? Do they give those who have them a sense of empowerment? Or do they just pay enough to cover rent and food, at the expense of the job holders’ mental and physical health?

As the epidemiologists who authored the book The Spirit Level have pointed out, our preoccupation with status has an effect on our overall well-being, which is why they’re promoting better equality as a means of improving our quality of life. By contrast, the kind of jobs being created by pandering to mainland visitors’ taste for luxury goods serves to throw inequality into sharp relief. The resentment it breeds is clear for all to see. And that’s not to mention the stress brought on by the pressure to perform, work long hours and cope with verbal if not physical abuse.

The low unemployment rate may look good at the official level, but at the social and individual level the pain is all too apparent.

Recently I’ve been told stories of people who have quit their jobs to take up farming. Now why would people with decent office jobs quit to subject themselves to sun and rain? Yes, there’s a lot of hard work involved in farming, but you nurture seeds and young shoots into mature plants and vegetables that will in turn nurture you and your friends. Contrast that with being in an environment where one is constantly a witness of if not participant in cynical corporate practices, suffering and imposing immense stress.

Farming may be tough, but it’s good, spiritually rewarding work. Being a salesperson or a waiter or a clerk – well, that’s just a job, and the amount these jobs pay may not even cover the cost to the job holders’ health and self-esteem.

The Gregorian new year arrived more than three weeks ago and we’re already into the Chinese Year of the Dragon.

Most experts have predicted a tough year ahead but the truth is, it’s going to be a bumpy ride for much longer than that. As the turnip cakes follow the Christmas pudding, it’s worth chewing on the following statistics: according to research in the US, 75% of that country’s healthcare costs is attributable to chronic diseases which can be prevented. Furthermore, older adults who exercise for just 90 minutes a week save, on average, US$2,200 in medical costs a year.

Last year the United Nations issued a wake-up call, declaring lifestyle-related, non-communicable diseases such as diabetes and heart disease “a socio-economic and development challenge of epidemic proportions”. It’s worth asking whether, apart from building more hospitals and importing doctors, there are more effective means of lowering Hong Kong’s long-term healthcare costs? In addition to publicity campaigns to promote healthy eating and nudging restaurants to offer options that few customers order, are there better, revenue-generating ways of reducing those costs? It’s really just the “polluter pays” principle applied, in the case of our health, to our internal rather than external environment.

Current trends are alarming. According to the Hong Kong Association for the Study of Obesity, as much as 80% of grossly overweight people aged between 30 and 70 suffer from at least one chronic disease. Treating obesity-related problems alone is expected to cost HK$2.8 billion this year.

At the individual level, if we don’t want to fork out a fortune for medical treatment as we age, we’d better get off the chair and start moving around a bit more.

Heard the news that LV will replace UA Cinemas in Times Square?

Many large-scale shopping malls have a cinema or cineplex because film-goers generate additional revenue when they eat and shop before and after watching a film, but with mainlanders bussed in for the express purpose of shopping and Times Square designed in such a way that there is less benefit to be gained from having UA there, Wharf, having been offered ten times the rent, has no compunction about kicking the cinema chain out.

Any good architect/space planner can easily point out the sins of this shopping mall – the reliance on a few sets of escalators to circulate customers, the disconnect between the different elements that discourages cross-fertilisation, etc – but such is mainlanders’ appetite for luxury brands that none of it matters.

People may prefer to watch DVDs at home or on their mobile devices these days, but cinemas have remained popular because of the big-screen experience and the opportunity for social bonding. UA Times Square has never been known to serve up arthouse fare, but it has a distinct cultural function, offering mostly Cantonese versions of popular films. Now locals who prefer to see the latest animated movie in Cantonese rather than English will have to look elsewhere.

The tills will ring at LV, no doubt about it, but who will benefit? And if mainlanders’ sole interest is buying a bigger variety of luxury brands at better prices, what hope is there that tourist arrivals will bolster attendance of cultural venues at the West Kowloon Cultural District?

The Peking University professor and purported descendant of Confucius has described Hong Kongers as “dogs” in reaction to a video showing a mainland boy being scolded for eating on an MTR train.

In an internet TV interview, since deleted by YouTube, Kong Qingdong also criticised Hong Kongers for an unjustified superiority complex, pointing out that Hong Kong is entirely dependent on China for its food, water and tourist revenue.

Isn’t it similar to the sarcasm with which Chinese officials greeted US treasury secretary Timothy Geithner after the financial crisis of 2008-09 broke? The chip, alas, is on the other’s shoulder.

But, you know, he is right, and both the D&G and MTR incidents are good reflections of the level of frustration Hong Kong people increasingly feel about being swamped by mainlanders whose presence is a constant reminder of the extent to which the local economy now depends on these visitors.

The “dogs” though, are not ordinary Hong Kong people, but those who have ignored the age-old advice that everyone must be familiar with, to not put all our eggs in one basket. Criticism really should be levelled at those officials who have pursued yuan business, red chips, mainland tourism, etc, to such an extent that the city no longer has any of the resilience that it once boasted.

Kong wondered how Hong Kong would survive without China’s largesse, but the more likely scenario is that, because of this lack of resilience, the city will not be able to recover when those who laughed at Geithner find themselves in the same predicament. He would do well to recall what Cheng Siwei, former vice-chairman of the standing committee of the National People’s Congress, had said about China’s equivalent of the US’s subprime crisis. The national government may be aware of the threat posed by local government lending practices, but with a worldwide recession looming and given its obsession with economic growth, the temptation to pump-prime again is tremendous and the problem, instead of being tackled, will sooner or later emerge to silence those who are so ready to berate anyone who makes them feel inferior.

Be careful what you ask for, ‘cos the government will quickly turn round and charge you – heftily – for it.

There’s nothing wrong with the “polluter pays” principle, nor prices that reflect supply shortages, but when there are alternatives that could mitigate the extra burden on end-users, it’s time to ask why the government is doing everything to exacerbate it instead.

Having announced the introduction of new air quality objectives – conveniently to take effect in 2014, after all the environmental impact assessments for the mega projects have been carried out (and not taking into account the three-year grace period for private developments) – the public has now been warned that cleaner air will come at a price, in the form of higher electricity tariffs and transport costs.

However, this is inevitable only if nothing is done to change Hong Kong’s electricity generation infrastructure and urban form. Has enough been done to improve the city’s energy efficiency and encourage use of electricity from locally produced renewable energy? Why is it that, instead of reducing the cost and drudgery of travelling long distances to and from work, the government is still pursuing an urban development model that kicks those who can least afford the extra cost the farthest away from the city centre?

Tenants of subdivided flats in industrial buildings are being evicted in the name of fire safety concerns. Even assuming public housing can be allocated for them, it’s highly doubtful that they will be allocated public housing flats anywhere near the city centre. This is not just a question of having an affordable roof over one’s head, but also one of having the means to pay for the added transport costs of taking buses and/or trains to and from work.

Right now, the government’s also holding a “public consultation” on waste charging. We are being asked to consider one of four options:

1. A charge based on the amount of waste to be treated or disposed of
2. A charge linked to water consumption
3. A fixed charge applicable to all waste producers within the same category or district, regardless of how much they produce individually
4. A charge based on weight as assessed when the waste is delivered to disposal facilities

Considering this is a city where some families send their helpers to the changing rooms of their residential clubhouses for their showers, any one of the options promise enough fun to start a new sitcom that revolves around the clever little ways people will go to avoid the extra expense.

Unfortunately, a more proactive approach is not on the table. Suppose there are district-level waste treatment facilities and the public is given the option to either throw everything out and pay for doing so; or separate their waste for recycling or treatment at these facilities at no cost?

The Construction Industry Council is building a low rise in Kowloon Bay that will use waste cooking oil to provide 70% of its electricity. According to those involved in the project, the building will consume 50 tonnes of biofuel a year – equivalent to 2.5% of the 2000-tonne capacity the two biofuel companies in Hong Kong has. Should demand rise, there is little doubt the two companies will scale up their operation. Imagine how happy the catering industry – and even households – will be to be given the option of collecting their waste cooking oil for recycling rather than be charged for its treatment and disposal.

The government itself has run a pilot project that demonstrated the feasibility of running a composting facility with a capacity to process 400 tonnes of food waste a year. Imagine dotting similar facilities all over Hong Kong to deal with some of the domestic waste, of which 6,135 tonnes was produced per day in 2010. Instead, it still favours large-scale, centralised facilities that will incur increasing transportation costs by virtue of their location in remote areas.

CE hopeful Henry Tang is already alarming people with the noises he’s making to appease the Heung Yee Kuk, suggesting that villagers may be allowed to build taller blocks.

He seems to think that would solve the problem brought on by the small-house policy when the problem won’t be solved at all unless the policy is abolished completely.

His opponent, C Y Leung, knows the problem – he was a suveyor after all – but offers no solution either. Instead, he has displayed a degree of eco-illiteracy which is truly startling for one who is patron chair of the Climate Change Business Forum, by suggesting he’d introduce incentives to boost the local birth rate.

For those of us who are not aware that the planet doesn’t have the resources to sustain an ever-growing human population, please spend a little time watching David Attenborough explain the problem in the video below.

For the purpose of this post, suffice to observe that Hong Kongers are already becoming agitated over overcrowding on streets as more and more mainlanders come over to shop, even for daily necessities. Locals are also up in arms over the flood of mainland mothers rushing over to give birth in Hong Kong. It’s not just the fact that they’re overwhelming the city’s healthcare services; it’s also because the people are wiser than the CE hopefuls and can see into a future in which Hong Kong will strain to provide the education, healthcare and other services required by the resulting larger population.

Of course, Mr Leung’s idea is driven by the typically erroneous assumption that an ageing population will have a negative impact on economic growth so the only solution is to expand the population. Is that why grand schemes for reclaiming vast tracts of land from the sea have been proposed? Well, maybe we could create sufficient land to build enough high rises to accommodate a much larger population, but will we have the teachers, nurses, doctors, etc, in sufficient number and of sufficient quality, to care for them all? Will we even have the energy to power them all, at affordable prices?

It’s interesting to note how, in Japan, a highly lucrative gaming market has emerged, catering to retirees with time on their hands, money in their pockets, and the robust health with which to enjoy themselves. Politicians need to understand that an ageing population, far from being a burden, is a source of great wealth, in terms of work experience as well as consuming power. The elderly will only constitute a burden if they fail to look after themselves when they are young, by eating too much junk food, smoking, watching TV rather than exercising, etc. Governments can reduce the cost of treating lifestyle diseases such as diabetes and heart diseases by implementing measures to ensure people adopt healthier lifestyles, or at least accumulate revenue to safeguard public coffers against the cost of treatment, for example, by taxing junk food, as international experts are advising.

Pursuing the kind of policies being pushed by the two CE contenders may please vested interests but won’t do Hong Kong any favours at all.

The Doomsday Clock, which atomic scientists introduced in 1947 to indicate how close the world is to catastrophe, has had its long hand moved one minute closer to that moment.

“Faced with clear and present dangers of nuclear proliferation and climate change, and the need to find sustainable and safe sources of energy, world leaders are failing to change business as usual,” said Prof Lawrence Krauss, co-chair of the Bulletin of Atomic Scientists’ Board of Sponsors.

Well, none of this should be surprising. If we just look at the reaction of world governments to the EU’s decision to impose a carbon tax on flights to and from European countries, we’d have a pretty good idea of the bind we’re in. Instead of following the EU’s lead and introducing a similar carbon tax on aviation, their reaction is condemnation, with those with the biggest clout – ie. the US and China – telling their airlines not to pay or to boycott European routes.

What’s the point of extended climate change negotiations if the reality is governments always readily bow to the demands of the business lobby?

The aviation industry is particularly interesting in that it shows more clearly than any other industry the conflict between business interests and planetary survival. With its profitability constantly threatened by rising fuel costs, a carbon tax can easily tip the industry into losses. IATA has estimated that every US$1 increase in the average annual oil price will cost airlines US$1.6 billion more.

While the International Energy Agency reckons we have already passed peak oil – too soon for any cost-effective alternative like algae or biofuel to become available on a commercial scale – airlines are constantly looking to raise profitability through volume growth. In this they are supported by governments, many of which, including Hong Kong, have become heavily dependent on tourism and conferencing as a source of revenue.

If we want to tackle climate change and make our economy more sustainable by reducing our dependence on oil, we really need to shrink the aviation sector or tax it in proportion to its impact on global warming. But this is not going to happen, of course, because the aviation lobby is so strong.

That’s why a “public consultation” on the construction of a third runway apparently yielded an overwhelmingly favourable response. Nobody told the naïve members of the public who took part that this was a corporate, not public, consultation. Anyone who persists in believing that “public consultations” in Hong Kong are genuine, let this one be a constant reminder of that truth.

According to some fung shui masters, the dragon that will preside over the Chinese New Year is a water dragon. That it should be lurking in deep waters rather than flying in the air heralds upheaval for the world, they say. The way the odds are stacking up against the planet, do we really need the fung shui masters to tell us that?

So now you know: Hong Kong’s one big theme park set up to entertain visitors.

How else to explain Ocean Park’s announcement of a new theme zone called Old Hong Kong?

While conservationists struggle to save historic buildings as well as traditional businesses, the government-owned theme park is busy building replicas that mock the real things. Tours round the theme zone on a “heritage tram” and traditional snacks at faux dai pai dongs are promised, even as buildings of real historic value are destroyed or subjected to “adaptive reuse” and families are driven out of business by high rent and a policy that is stingy with licences for hawkers and dai pai dongs.

Ocean Park’s idea reflects a nostalgia and general appreciation for an aspect of the city that is fast-disappearing. Rather than package all these elements into a replica, why not do more to preserve what is authentic and still very much a part of many a Hong Konger’s life?

The creation of new jobs will no doubt be trumpeted along with the opening of this theme zone, but no one ever bothers to ask what kind of jobs they are? Are they as satisfying as running one’s own little business with the help of one’s family? Or are they just exhausting jobs that earn one’s enough to pay the rent? Will these jobs bring a better quality of life for those who take them on, or will they find themselves slaving away to please visitors, with little means or energy left to pursue their own interests or look after their health?

Every project announcement now comes with an estimate of the number of jobs it will create, but that’s all it is: a number. The living, breathing human beings who will occupy these jobs are barely considered for what they are.

The unemployment rate may be kept down, but the quality of life is hardly going to get better. In the meantime, Hong Kong becomes less and less resilient by the day.

What makes for resilience? An economy built on the provision of what’s essential to life, such as food, healthcare, affordable housing and transport services; is much less susceptible to the wild swings of one that is dependent on non-essential goods and services. And yet, rather than learn the lesson of 2003, when SARS led to a drastic drop in tourist arrivals and brought on a recession, the powers-that-be are increasing the city’s dependence on tourism for its income. This has skewed the authorities’ priorities so badly that it is willing to fork out millions of dollars to pay for a fireworks display when sponsors pulled out, when that money can be much better spent on helping those in need.

But then, the authorities are anxious not to lose face aren’t they? Alas, Hong Kong is all about appearances. All may be well on the surface, but it takes barely a scratch – or a security guard at a luxury fashion store – for all the underlying problems to burst forth and show the ugly reality.