Hong Kong’s Civil Unrest: Can Local ‘Tycoons’ be the Underlying Problem?
As the civil unrest in Hong Kong continues, a well known independent economist presents his solution to the civil uproar and protests. Andy Xie believes that china has to take appropriate actions to fix its property market.
In an interview recently, he suggested that a major reason behind the protests to have roiled up to this extent in that property tycoons in Hong Kong have been exercising an enormous degree of power, and hence, the Chinese government must take it away from them.
Protests in the city known to be the East-Asian financial hub, initiated with a series of peaceful rallies to oppose a single proposed law. However, over the days, it has converted into fuming city-wide demonstrations. Over the past week, a sit-in organized by the protestors severely disrupted the operations at Hong Kong International Airport.
Andy Xie commented that the outrage that has now taken shape of a wider pro-democracy movement has been fueled by sentiments of the city dwellers regarding stratospheric housing prices in the city.
Centa-City Leading Index, a reliable indicator of Hong Kong’s residential price trends, indicated that the property prices in the city have increased beyond 300% since 2003. The relatively stagnant wage rate over the years makes mounting housing prices even more problematic for the residents of the city.
Xie highlighted how the inflated pricing climate is leading to hopelessness among civilians. He added that the occasional violent outbreaks during protests illustrate the heightened desperation and feelings of unhappiness among the protestors.
As the worsening state of the city threatens the economy, business leaders have started to convey their stance on the situation.
Earlier this week, in a joint petition to newspapers, Hong Kong’s property tycoons called on to the public to halt their illegal protests and restore stability in the city. This was followed by an appeal notice addressed to government and police by the CEO of CITIC Capital, an alternative investment arm of Chinese financial conglomerate CITIC Group.
The economist, Andy Xie, said that despite the several revisions in the housing policies, Hong Kong authorities have always succumbed to favoring big local property tycoons who squeeze the market and inflate the prices against the salaries of the more affluent sector of the society. This approach, then, fails to cater to the need of vast majority of the local population.
Xie’s solution for the housing issue is that Beijing distances itself, recognizes that these tycoons are the very reason behind the issue, and pull away the political power that it has endowed to them all these years.