Oct 9, 2021
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After the pogroms, Hong Kong will be rebuilt

© REUTERS / Tyrone Siu

Imagine a city that has lived for about two years in an atmosphere of civil war, which undermined the economy and intimidated the majority of the population. And now one of the parties in this war won. What to do next? The answer appeared: to build a new city on the outskirts of the old one to eliminate the root cause of all problems, that is, the wild high cost of housing.

We are talking about Hong Kong, a special territory of the PRC, which, after returning to China in 1997, has retained many local features and laws, in fact, about an almost separate economy, with its own currency and place in international organizations. The last days were marked there by a symbolic event: the barricades were removed from the building of the local administration and several other buildings. They consisted of light two-meter plastic containers, into which water was pumped, which drastically made them heavier and turned the entire structure into a fortress. Now the water has been drained, the containers have been taken away. National Day of China (October 1) was held in Hong Kong under the shadow of thousands of red five-star flags of the PRC, mixed with the flags of this territory itself, also red, but with a bauhinia flower instead of stars. Patriotic actions took place everywhere, with or without flags. There were no unpatriotic ones.

Let’s ask: at what cost has all this been achieved? It is clear that the administration of the territory in alliance with the central, Beijing authorities, after a long discussion, took tough measures – in fact, the defeat of the pogromists and a ban on their participation in politics. Several legislative acts have been adopted on this topic, first of all, that only patriots can govern Hong Kong and be elected to local government bodies, that is, those who do not demand secession from China and return to Great Britain (the British, with their current disasters, only Hong Kong still and not enough). Numerous arrests have been carried out, and the leaders of the riot have been charged with imprisonment up to life. The headquarters of the riot disbanded. Universities have again become places of study instead of nests of anarchy. In general, no democracy.

But, on the other hand, what kind of democracy is this if a well-organized minority of the population (from 0.5 to a maximum of a million out of seven million inhabitants) took the majority hostage? If this minority was building up the military, in fact, actions with the aim of paralyzing the life of the territory with demonstrations, demoralizing the authorities and all those who support it? When it comes to bricks and incendiary shells, including in the subway? As a result, the former economic miracle at the height of the riots in 2019 showed minimal economic growth – never before.

After all, if the government demonstrates “endurance” (it is also powerlessness), then the non-aggressive and politically, perhaps, neutral majority, which, most likely, is not ready to stock up on their bricks and go out to battle with fellow activists, feels powerless as well. Revolutions, as you know, are not necessarily carried out by those who have the majority, but rather by daring and decisive ones. And what kind of democracy is there if several million people are deprived of the opportunity to live as they want and make any plans for the future because one seventh (or one fourteenth) of the population has decided to declare war on the local authorities and all of China? What if patriotism, or simply realism (the world needs Hong Kong only as a gateway to China), almost began to be persecuted by an active minority?

What is happening in Hong Kong today: a total replacement of all branches of government, which will stretch for most of 2022. We repeat, people who tried to impose their ideas on the majority, people who called on foreign states to impose sanctions against their country – they cannot participate in government under the new laws. So, what is next?

There is an interesting plot here. Hong Kong chief executive Carey Lam, who delivered the keynote speech this week, devoted almost entirely to one project: building a new city in Hong Kong. It will be located in the north of the territory, at the very border with the rest of China, at 300 square kilometers. It will accommodate 926 thousand apartments for about 2.5 million people. That will create jobs not only for builders, but above all for 150 thousand people in technological and innovative fields. That is, as the members of the Legislative Assembly of the territory now say, it has received a direction, a development benchmark for 20-30 years ahead and corrects the omissions of the last twenty years.

The fact is that throughout most of Hong Kong’s history, land, housing and office space were among the most expensive in the world. The mechanism of a very meager allocation of government-owned land to private developers worked (including during the time of British colonialism). Artificially inflated real estate prices were part of the system to keep real estate stocks at the right level – and these land spills to the market held together the entire financial structure of Hong Kong, including the local dollar.

But this meant for a person who was beginning life to live in wildly expensive rented communal apartments or, for the lucky ones, in dwarf apartments, about which there were jokes (“I reach out from the front door and close the window in the kitchen”). There were also municipal subsidized housing programs, but recently the waiting period for such has increased to 5.5 years.

In Hong Kong, there is a complete consensus that the ordinary participants in chronic riots are schoolchildren and students who knew well that getting their own housing was almost impossible for them. In principle, we can say that the political crisis and the crisis in the real estate market entered into a complex chemical reaction between themselves, which prevented the situation from moving forward.

That is, local and central authorities would have long ago put forward the idea of ​​building a new city – but we are talking about a public-private partnership, nothing could be done with budget money alone. And business, like the state budget of China or the money of Chinese and other developers, would not have gone into such a large-scale project in the territory where the political crisis was growing.

What we see now: some rating agencies have just returned the title of world leader in free economies to Hong Kong (however, based on the data of the rebellious 2019, it turned out ridiculous). Others returned territory to the top four global financial centers. The economy is now growing at eight percent a year – recovering from the pandemic and riots; growth is expected by the end of the year, perhaps six percent, almost like the good old days. All together, it confirms the thesis, even if it was not born in Hong Kong: the less politics, the more business and normal life in general.

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