Hong Kong's economy

End of an experiment

The introduction of a minimum wage marks the further erosion of Hong Kong’s free-market ways

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Readers' comments



I think the reason that Hong Kong politics have taken a bend to the left is partly because of the income distribution. With a gini coefficient standing at around 0.5, it is one of the highest in the world.

Income distribution itself gives us no useful insight if we do not take into account the equivalent purchasing power of the population's income. And that seems to be going down as well. To illustrate this point, land and in turn property has been exceptionally expensive. A decent apartment will cost north of 500 USD per sq ft. In the US, 1 M USD will buy you a decent home, but in Hong Kong that will buy you a 500 sq ft apartment. This is partly because of the hot money coming straight from the mainland, but also partly because of the underlying scarcity of land and housing. Property prices have been soaring, and for some of the properties, levels of 97 pre asian fin crisis is not that far out of reach. In contrast, income of the lower classes of Hong Kong has been largely stagnant.

I think a falling purchasing power + a widening income gap is just a perfect environment for more left leaning policies; and if handled carelessly, could bear huge consequences


SilentChinese: Hehehe...as a young Singaporean commented in a forum on Japan's latest election, he will not vote for his country's ruling party because of its disconnect with the people. He is even prepared to see Singapore's top-charting GDP per capita drop if that's what it takes! Beat that! Better that everybody ends up poor and poorer!


It's clear that HK has always broken the laws of free market when it benefitted the rich and powerful, but maintained strict orthodoxy in the cases where it would have benefitted the ordinary people and the poor. Typical capitalist hubris.


These type of articles are why I let my subscription to the Economist expire and don't plan on resubscribing.

Let me summarize the article for you.

"A terrible thing has happened in Hong Kong. This perfect free market economy... Well, it's not perfect, I guess it did hand out a bunch of handouts to rich tycoons here and there and bailed out a few banks here and there and basically continued the so called crony capitalism that the rest of the so called "free market" world practices. But all those are just minor transgressions. Today poor Hong Kong has erred terribly. It has guaranteed a minimum wage for the poorest of its citizens. TRAGEDY!"


Want Free Market Capitalism? Try the Wise-Platonic philosopher King (i.e. british colonial governor)
Want One person one vote? Good bye Non-intrusive government, Hello Redistribution of Wealth.

Because Likely or Not, the poor people will always outnumber the rich people. and sooner or later they will figure out how to get what they want via the vote.

I am harsh. but hey, truth hurts.


My conjecture is right.
Political Liberalism leads to death of Economic Liberalism. It was true in Britian, it was true in US, and it will be true in HK.

The British Colonial Governors can do with out much social welfare because they can largely ignore the demand of the poors - The poors in HK don't get a vote back in the day. and frankly I don't think any of the brits give a rat's a** for the poorer HKers.

but today through political liberalisation (all under the supposily repressive and intrusive chinese that economist and other activists wouldn't hestitate a second to mud ruck), the fact is that it is principlly the the left in HK is making demands for both more welfare and more vote.

If free market is so near and dear to economist writers. then economist magazine in must choose between a free market and liberal politics.
face it, there is no paradise on earth where those two principle can stand.

Sense Seeker

Hong Kong is rich, which is nice. But in addition to GDP per capita I would find an indicator of the distribution of this wealth helpful.

I also attach little value to the stories about the number of people that will lose their jobs. Did the liberal parlamentarian have anything to back up those figures? Typical scare mongering, if you ask me.


Wait... How's tolerating monopolies against free-markets?

"Another exception to the free-market rule is the currency’s peg at around $7.80 to the American dollar. And the state has also had a habit of granting or tolerating monopolies"



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