Sustainable Living Hong Kong

China and Hong Kong, in different ways, are both fretting over the prospect of an ageing population and how that will impact on the cost of healthcare and productivity.

Various indicators, however, are suggesting that the problem lies elsewhere: the population may not live to impose a long-term health burden; instead, the burden and impact on productivity will come much sooner than the governments think, in the medium term.

The shift to a high-protein, western diet has given rise to a population with a health profile that is much inferior to that of previous generations. This is documented in the book Fat China: How Expanding Waistlines Are Changing a Nation, by Paul French and Matthew Crabbe (Anthem Press, 2010). In Hong Kong the shift was made earlier and the impact is getting worse: heart attacks are becoming common among the middle-aged and more young people have become obese.

A population on such a diet is unlikely to live to a ripe old age; instead, they are likely to require treatment for diabetes, heart disease, cancer and other diseases from a young age – if they can still be treated in ten years’ time: the World Health Organisation has warned of humanity’s impending loss of the battle against bacteria, which would render most surgeries impossible due to the risk of life-threatening infections.

The irony of course is that part of the strategy for pushing up the GDP, which has nothing to do with our quality of life; is to encourage a poor diet. Many multinational fast food companies are targeting the China market to boost revenue as their domestic market in the US stagnate. At the same time, local food companies that run fast food chains or produce junk food from cup noodles to sugary drinks are falling over each other to list on stock markets and expand.

This is all good news for the pharmaceutical companies that make drugs for treating such lifestyle diseases, but their profit is society’s loss, in the form of reduced productivity and compromised health, not to mention the mental, physical and emotional burden imposed on carers.

Simply encouraging exercise and healthy menus is like encouraging smokers to quit, without raising taxes or instituting a ban on smoking in public places: it just doesn’t work. A tax on junk food is the bare minimum the government should consider. At the very least, this would place the cost of treating diet-related ailments on those responsible for causing them, and reduce the burden on the public purse.

Having taken a knock on the knuckles from the Ombudsman, Hongkong Post has finally acted: from September 1, we will be able to collect free stickers from any post office to put on the top right corner of our mail boxes as an indication that we don’t want unsolicited mail.

Hongkong Post stresses that the opt-out does not apply to official circulars from government departments, election candidates or approved charities. Fair enough.

The ploy will enable Hongkong Post to continue making money from their junk mail service without receiving repeated complaints about them, but one wonders what happens to the forests still being felled to print the junk mail, even when it’s not distributed. Eventually, one hopes, so many people will opt out that marketers will take a hint and stop.

There’s a hotline for enquiries as well: 2921 2222.

Australian entrepreneur Dick Smith has set up a A$1 million prize for anyone below the age of 30 who can come up with the best solution to stop capitalist society’s addiction to consumption and population growth.

The Wilberforce Award is named after the 19th century English politician William Wilberforce, who campaigned for the abolition of slavery despite warnings that it would lead to economic collapse.

As some of us are already all too aware, Mr Smith believes the planet, with its finite resources, cannot cope with the exponential expansion of the human population and, if nothing is done to reverse it, human civilisation will collapse. He said he was looking for a person brave enough to go against the grain of growing populations. “We need our Wilberforce winner to abolish the slavery of today, which is to abolish the ridiculous addiction to exponential growth.”

Potential winners do not have to apply. Instead, Mr Smith said he would monitor the global media to look for someone who has made a “significant contribution” to the discussion and “who also becomes famous through his or her contribution to the debate”.

The award is to be announced in one year’s time. To be eligible, one has to:

• be under the age of 30
• believe in maintaining stable population numbers and a sustainable consumption of energy and resources
• come up with and communicate successfully alternatives to consumption-driven economic growth
• get noticed in the media for campaigning on such issues.

Watch Mr Smith explain the prize below.

With all the discussion about property prices and the many problems it spawns – such as the rising gap between the rich and the poor, mental illness and overwork from living in pint-sized apartments and spending hours in a metal tube getting to and from work, disillusionment amongst youth at the prospect of never owning their own home—it is worthwhile to step back and ask:  just how bad is the situation?  Is it all huff and politicking, with various interests using property as a way to advance their own agendas?

It’s always a good idea to start with facts.  The  Economist looks at “fair value” of property in major economies, which is based on comparing current ratio of house prices to rents, with its long-term average.  In other words, this will tell us how much the current situation is out of line with the long term.

The chart shows that prices in Hong Kong have risen the 2nd most globally on a year-on-year basis, exceeded only by Singapore.  But on a fair value basis, Hong Kong’s property is extremely overvalued, again ranking 2nd.  Hong Kong’s fair value reading is 53.6, with 0 being fair value, i.e. Hong Kong property is at 53.6% above its fair value.  And despite the much reported rise in Singapore property prices, prices are just 20.3% above long term trends.

We already know that Hong Kong’s residential property prices are already among the world’s highest—exceeded only by Monaco and London. What the Economist chart tells us is that things are getting worse, and that we are hitting the extremes of our own trends.

But this is not a “political” blog; so does it have anything to do with sustainability?

One of the keys to a sustainable society is that its citizens feel that what they give is justly in line with what they get, or at least that they have the prospect of reaching such a stage; and that the economic and ecological products of this relation can be sustained over time.  So long as high property prices end up disenfranchising more and more people, we should “call a spade” and say that the trend is unsustainable.

Hong Kong’s double whammy is that most of the building are also environmentally unsound in construction and operation, while producing no economic benefit to society at large (though they do produce profit for a small number of operators).  We need both environmental and economic sustainability.  In Hong Kong’s property market, we get neither.

The South China Morning Post recently discovered that the largest developers are getting bigger and cornering the market for new flats (see an extract of the original article here). Although the article is hardly news to the large numbers of Hong Kongers who work hard, pull down a good salary, and still can’t buy a decent-sized flat, it is nice that it is given such prominence – a front-page billing–  since it does stand as stark evidence that the government’s effort “to respond to the aspirations and the needs of our citizens” is yielding limited results and may even be counter-productive.

Today the paper followed up with an editorial in which it analysed the situation correctly, in that our high property prices are due to the government’s land policy but which produces high property prices which then cascade through the rest of the economy and function like an indirect tax on the population.  The editorial also mentions that the government’s land policy also places disproportionate power (and profits) in the hands of the real estate sector.

As a solution, the SCMP proposes that the government increase the supply of land and sell it off in smaller parcels, thereby enabling more developers to bid to create competition in the property market. Here I realised that the SCMP should just stick to news. Does anyone really believe that the smaller property firms are less single-minded than the larger firms?  If anything, the smaller firms would have less “reputation” at stake and would therefore be more likely to cut corners, renege, and generally engage in unsanitary behavior.   That explains why China chooses to close 2000 small mills and steel plants, rather than persuade them to abide by national policy when they lack incentives and resources. Consolidation can actually clean things up.

In essence, property developers operating under a single fixed framework will vary only incrementally in their actions. It’s like arriving at the airport in the US and seeking a rental car.  There are 10 firms, but surprisingly, they all offer more or less the same package because they operate under the same framework and conditions.  Would adding an 11th or expanding counter space change the nature of the game? Buyers probably would not notice the difference.

Without changing the policy framework and rules of the land policy, expanding supply and changing the nature in which it is sold off will have only a marginal impact on the pricing and availability of flats. Solutions to this problem will only come by admitting that the current system does not provide for the “aspirations and needs of our citizens” and then fixing it, both from a supply and demand point of view, while not undercutting those who have already become homeowners.

First up must be to end the high-land price policy — gradually – and for the government to fund itself from sources more common for an advanced industrial society, namely income.  Having to pay more income tax isn’t as bad as it sounds:  if you only had to pay 15% of your income on housing, rather than 35%, wouldn’t you be glad to cough up a few extra dollars for the government?  First, you would end up ahead. Second, the government is actually obliged to do something useful with the money, whereas the property developers just pocket it as profit. So those gains come back to you indirectly.

Second must be to force speculators to pay the social costs of their speculation – in the form of tax on short term flipping (meaning less than 3-5 years) and greater rights for tenants.

Third would be to end the biases in government which have produced policies that further entrench the power of the real estate developers, such as the Urban Renewal Authority partnership programme, the mainland investors scheme , and the like.

It seems that enough people in positions of power know that the current land/property system is failing.  The key is whether they will have the political will to overcome vested interests, and do what is right for the majority of people in Hong Kong.

The NGOs must be overstretched, what with the flooding and landslides in China, more flooding in Pakistan and the wild fires in Russia.

Is there anything we can do for the suffering millions, apart from making donations to the NGOs involved in emergency relief in the affected regions?

The answer is a resounding yes: we just have to eat less meat, travel less and stop shopping till we drop. These climate change-driven disasters would not have happened if industries are not generating so much greenhouse gas emissions, but the problem is not with industries, but us, because industries only spew greenhouse gas emissions to produce the products we want. If we don’t want them, or at least want less of them, the corresponding amount of greenhouse gas emissions generated will be less.

As the United Nations has predicted, climate change will “hit the poorest and the most marginalised groups the hardest”. Our demand for consumer goods has led to the development of factories that have caused enormous pollution in what was once pristine countryside while the former farmers end up slaving in the same factories for a paltry wage. It would have been better and healthier, for them and us, had the farmland been preserved for the cultivation of organic foodstuff for human consumption.

Doctors around the world are recommending we eat less meat to lead healthier lives, and travelling less would mean less stress from the endless packing and unpacking, jet lag, indigestion and aimless waiting at airports. Consuming less would save Earth’s resources and our wallets at the same time.

If we could do all three, we would save ourselves lots of money as well as the donations we feel the urge to make due to the terrible suffering. And Earth will thank us for it.

Speaking of GDP, the dependence on consumption to boost economic growth is simply unsustainable, but like the issue of overpopulation, governments just want to put off the hard decisions and follow a path that environmentalists have long warned would lead to ecological disaster.

Economists who are in favour of consumer-led growth have no answer to the question of sustainability and, when push comes to shove, just pass the buck back to the politicians who depend on them for advice. Click here to watch the debate between one such economist and Brian Czech of the Centre for the Advancement of the Steady State Economy.

The average Bhutanese probably doesn’t even make a tiny fraction of the income of a Hong Kong professional, but anyone who’s read yet another story about the little Himalayan kingdom, this time in the Sunday Post Magazine a couple of weeks ago, would be reminded of how much better off they are compared to us.

That’s because their aim is achieve Gross National Happiness, rather than a high gross national product. What has the relentless pursuit of an ever-growing GDP brought to Hong Kong? According to the Chinese University, it’s an ever-worsening quality of life, as measured by its Quality of Life Index.

The overall score of 102.19 for 2009 is a drop of 2.64 points from 2008 and, tellingly, even worse than the score of 104.20 for 2003, the year of SARS.

A home is becoming less and less affordable by the day, even in a low-interest rate environment, and the prices of everything just keep going up. According to CU associate professor of economics Chong Tai Leung, the housing affordability and rent indicators are not likely to improve even with the enactment of the minimum wage. He suggested the government should allocate 20-30% of land revenue for assisting homebuyers, which seems viable given that Hong Kong’s infrastructure needs will tail off in the coming years and will therefore require less allocation from the Capital Works Reserve Fund – unless we start building roads to nowhere.

The government’s repeated argument that this would amount to intervention in the free market is disingenuous as its use of the Capital Works Reserve Fund to boost the GDP is already a kind of intervention. The following chart shows the indicators that have dropped year-on-year.

We are familiar with the fact that the world is overpopulated, yet instead of rejoicing, governments panic when the fertility rate goes down. Why’s that?

The reason given is always the same: that an ageing population with its increasing demand for healthcare and pensions being supported by a shrinking workforce places too much pressure on public coffers. So the typical solution is to do all they can to boost the fertility rate, so that there will be more younger people paying the taxes that will go towards supporting the older people.

It’s not hard to see what the global implication of this approach is, but tell that to the Hong Kong Government. The head of the Census and Statistics Department is of the opinion that, if Hong Kongers can’t be persuaded to have more babies, then more mainlanders must be persuaded to settle here. And he called it “sustainable development”.

Exactly how many people can you squeeze into this tiny dot in the South China Sea before people get so fed up with the overcrowdedness that they all turn into Bus Uncles, prone to vent themselves at strangers that rub them up the wrong way? And what happens to the young people when they get old? There’ll be quite a lot of them if the government gets its way. Does it then try to get more young people one way or another to ensure sufficient tax revenue comes in?

The crunch is going to come at some point; besides, the planet’s already close to its ecological limits. Rather than rely on boosting population growth to avert a pension and healthcare crisis, governments should, first of all, stop its obsession with economic growth – although the provision of goods and services for the elderly will play a significant role in the economic development of a mature city.

A lifecycle approach towards the issue should also be adopted: many of the problems that typify old age actually trace their origins to the earlier stages of life. For example, someone who is obese as a child is more likely to grow up with diabetes, heart disease and other ailments. Tackling these problems early on by diet and lifestyle interventions will drastically reduce the health cost impact decades down the line. From this perspective, failure to act because the government doesn’t want to interfere with the free market is gross irresponsibility.

Many of today’s older folks are relatively healthy because they’ve grown up eating a traditional diet and are used to being quite active, doing tai chi or regularly visiting the market. By contrast, today’s young people – those who will be old a few decades later – fill their stomachs with junk food and spend all day playing computer games. How the health of this segment of the population will pan out in the long term ought to be a major concern.

The result of short-termism on the part of the government is likely to be future generations that suffer poor health as well as a heavy financial burden, not to mention the environmental degradation that will be too late too reverse. There’s nothing sustainable about such an approach.

The property tycoons want to bite back.

Fed up with negative coverage of their wealth-siphoning activities, one of them – the one who got so much flak over the Hung Hom peninsula saga and the subsequently aborted hiring of a former Buildings Department chief – wants to buy a newspaper so he can get the press to say what he wants them to say.

One shouldn’t be too alarmed perhaps, since the Hong Kong Daily News is already owned by yet another tycoon. But if reports are to be believed and the tycoon plans to turn it into a free tabloid, then civil society had better be prepared for this manipulation of public opinion.

My jaw dropped recently at a presentation about research commissioned by the Climate Change Business Forum, about how buildings can be designed to generate its own electricity and be more energy-efficient. Apparently the research has the support of the Real Estates Developers’ Association, as one of the first slides indicated.

This isn’t surprising if we’re talking about commercial buildings that they build for lease, as they will save operating cost by adopting such technologies. But ordinary residential buildings that they sell at outrageous prices? The only plausible explanation, it seems to me, is that, realising the developers will not implement measures to cut the energy consumption of their buildings when left to self-regulate, the government has finally introduced mandatory building energy codes. And now that they’re forced to spend more money to improve energy efficiency, they’re only too happy to take credit for it.

For more positive news of what the tycoons get up to, wait for the new Hong Kong Daily News.