Saudi Press

Saudi Arabia and the world
Sunday, Jun 01, 2025

Social Justice: China presses Hong Kong magnates to share the wealth

Social Justice: China presses Hong Kong magnates to share the wealth

Beijing pushes super-rich to help solve city's chronic housing shortage
Hong Kong's real estate tycoons are belatedly learning the merits of inclusive capitalism -- but only with a prod from Beijing.

When Chinese state media accused Hong Kong's billionaires last month of land hoarding, sowing the seeds of the housing shortage now fueling the biggest protests in the city's history, three of the "big four" developers worth a combined $120 billion took heed.

"In the past, companies only talked about [creating] shareholder value," Adrian Cheng, designated heir to the New World Development property empire told reporters last month. "In the future, I think we need to think more about stakeholder value."

Vowing to donate a sixth of his family's vast agricultural land holdings, or three million square feet valued at HK$3.4 billion ($434 million), Cheng outlined a plan to build homes for the underprivileged.

While calls for democratic inclusion and investigations into police brutality have ranked high on the protest movement's list of demands, authorities were more concerned by the large-scale displays of violence being deployed by protesters acting as if they had nothing to lose.

Best summed up by a line of graffiti painted on a city wall during this long, hot summer of unrest -- "7K for a house like a cell and you really think we out here are afraid of jail?" -- that sentiment is to a large extent true.

With HK$7,000 being the monthly rent one can expect to pay for flat the size of a prison cell, more than half the monthly salary of HK$12,000 for most university graduates.

The extraordinary influx of capital into the former British colony over the last 50 years has created such a yawning wealth gap that not even the city's professional middle classes can today afford to enter the property market.

All of which has started to unnerve Hong Kong's overseers in Beijing.

In a rare move, several Communist Party mouthpieces last month singled out the housing shortage as a key reason for the turmoil that one official has described as the worst crisis since the semi-autonomous enclave was returned to China in 1997.

"To solve the problems of people's livelihood, it's time for property developers to show their utmost goodwill instead of just minding their own business, hoarding lands and earning the last penny," thundered one People's Daily editorial.

Following Adrian Cheng's promise to make farm land available for housing, the Lee family, which controls Henderson Land Development, the property conglomerate valued at more than HK$180 billion, quickly followed suit.

The group announced that it was considering lending about 100,000 square feet of farmland to the government to build " transitional housing", as well as donating land to various charities.

Not to be outdone, a spokesman for the Kwok family's Sun Hung Kai Properties said that while accusations that the family had engaged in land hoarding land were "unfair" and "untrue," the group was nevertheless "keen" to support the government's attempt to increase the supply of affordable housing.

Sun Hung Kai Properties' self-sacrifice nevertheless came with layers of get-out clauses: The land could only used for public housing and could not be put to public tender in future.

The spokesman also stressed that Hong Kong's Lands Resumption Ordinance used to to seize private owners' land should not cover land earmarked for private housing or commercial development purposes, as such land enjoys "private property rights enshrined in the Basic Law," the city's mini-constitution.

"They hope to let the society know that they have done something for alleviating the problems," said Victor Zheng, assistant director of the Hong Kong Institute of Asia-Pacific Studies.

Zheng added that Hong Kong's powerful families had "to a very large extent contributed to the current inherent social problems" after benefiting from decades-long monopolies property and key utilities.

According to the latest Gini coefficient, a widely used index to measure income disparity, Hong Kong had reached an all-time high at 0.539 in 2016, well above passed 0.4 level that the United Nations has defined as "alarming."

Another Hong Kong government study indicated that the richest 10% of households earned on average 44 times more than the poorest 10%.

"It is time to let the property tycoons know that the rising Gini coefficient and worsening social problems may require them to ultimately pay the price," Zheng said. "They need to do more instead of less."

While making outsized donations goes against a cut-throat business philosophy of making biggest gains, many believe Hong Kong's real estate tycoons now have little choice but to accommodate Beijing's wishes.

For major developers who have accumulated extensive mainland portfolios over the years in order to ride the growth wave of the world's second largest economy, the consequences of not satisfying Beijing can be enormous.

In the six months to June 30, mainland China contributed 32.45% of New World Development's revenue, 21.33% for Henderson Land and 7.83% for SHKP. And that proportion is only expected to get bigger with so many projects in the pipeline.

"The donation will be viewed favorably by the central government as such gestures are conducive to easing the social tensions," said Phillip Zhong, an analyst at Morningstar Investment Management. "And the political value is important," he said, adding that in return, they could expect the government to accommodate other, more commercially valuable projects.

Conspicuous by his indifference to Beijing's foot-stamping was Li Ka-shing, Hong Kong's richest man and the founder of the multinational conglomerate CK Hutchison Holdings.

Stressing other donations Li has made toward education and supporting small businesses, a spokeswoman for Li's property vehicle CK Assets Holdings told Nikkei Asian Review that "building houses on farmland is a time-consuming project and it will take long time to benefit the people in need."

After Li sold a string of mainland properties over the past few years, bringing down the mainland contribution to CK Assets' bottom line from 48% in 2016 to just 13% in the first half of this year, Li's decision not to follow Beijing's lead becomes more understandable.

Despite the People's Daily blasting him as "ungrateful" and questioning his patriotism, Li has brushed off the criticism as "ridiculous and illogical". And given the political and policy uncertainties across the border thanks to the trade war with the U.S., Li's sell down of his mainland assets looks even more prescient.

Some are even questioning whether the sudden generosity of property tycoons can actually help ease the housing shortage.

"Developers are likely to select farmland with minimal commercial value, either due to zoning or lack of infrastructure.. and the farmland conversion has generally been a long and difficult process," said Morningstar Investment Management's Zhong. He expects little impact to companies' profitability in the near term.

Still, with the current political winds shifting against them, trying to bargain with Beijing with might not help the tycoons get what they want either.

"What Beijing needs them to do now is to make a sacrifice to balance the interests of society," said Joseph P.H. Fan, professor of finance at the Chinese University of Hong Kong. With the central government now more aware of the outsized influence exerted by Hong Kong's elite, Beijing can be expected to pay much closer attention.

"Those families' interest is deeply intertwined with China and Hong Kong," Fan said "Whether [the successors] like it or not, how willing they are to accommodate Beijing's requests will determine the fate of their families."
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
European and Arab Ministers Convene in Madrid to Address Gaza Conflict
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
UAE Offers Free ChatGPT Plus Subscriptions to Citizens
Lebanon Initiates Plan to Disarm Palestinian Factions
Iran and U.S. Make Limited Progress in Nuclear Talks
The Daily Debate: The Fall of the Dollar — Strategic Reset or Economic Self-Destruction?
Trump Administration's Tariff Policies and Dollar Strategy Spark Global Economic Debate
OpenAI Acquires Jony Ive’s Startup for $6.5 Billion to Build a Revolutionary “Third Core Device”
Turkey Weighs Citizens in Public as Erdoğan Launches National Slimming Campaign
Saudi-Spanish Business Forum Commences in Riyadh
Saudi Arabia and Spain Sign MoU to Boost SME Sectors
UK Suspends Trade Talks with Israel Amid Gaza Offensive
Iran and U.S. Set for Fifth Round of Nuclear Talks Amid Rising Tensions
Russia Expands Military Presence Near Finland Amid Rising Tensions
Indian Scholar Arrested in Crackdown Over Pakistan Conflict Commentary
Israel Eases Gaza Blockade Amid Internal Dispute Over Military Strategy
President Biden’s announcement of advanced prostate cancer sparked public sympathy—but behind closed doors, Democrats are in panic
A Chinese company made solar tiles that look way nicer than regular panels!
Indian jet shootdown: the all-robot legion behind China’s PL-15E missiles
The Chinese Dragon: The True Winner in the India-Pakistan Clash
Australia's Venomous Creatures Contribute to Life-Saving Antivenom Programme
The Spanish Were Right: Long Working Hours Harm Brain Function
Did Former FBI Director Call for Violence Against Trump? Instagram Post Sparks Uproar
US and UAE Partner to Develop Massive AI Data Center Complex
Apple's $95 Million Siri Settlement: Eligible Users Have Until July 2 to File Claims
US and UAE Reach Preliminary Agreement on Nvidia AI Chip Imports
President Trump and Elon Musk Welcomed by Emir of Qatar Sheikh Tamim with Cybertruck Convoy
Strong Warning Issued: Do Not Use General Chatbots for Medical, Legal, or Educational Guidance
Saudi Arabia Emerges as Global Tech Magnet with U.S. Backing and Trump’s Visit
This was President's departure from Saudi Arabia. The Crown Prince personally escorted him back to the airport.
NVIDIA and Saudi Arabia Launch Strategic Partnership to Establish AI Centers
Trump Meets Syrian President Ahmad al-Shara in Historic Encounter
Trump takes a blow torch to the neocons and interventionists while speaking to the Saudis
US and Saudi Arabia Sign Landmark Agreements Across Multiple Sectors
Why Saudi Arabia Rolled Out a Purple Carpet for Donald Trump Instead of Red
Elon Musk Joins Trump Meeting in Saudi Arabia
Trump says it would be 'stupid' not to accept gift of Qatari plane
Quantum Computing Threatens Bitcoin Security
Michael Jordan to Serve as Analyst for NBA Games
×