Hong Kong is the city of paradoxes par excellence. Hosting the most famous global financial institutions, it is known all over the world as Asia’s financial hub. Yet, the wealthy Hong Kong only represents a minuscule fraction of the city; nestled around Central, Southern Hong Kong Island, or West Kowloon (to name a few).
The vast majority of Hong Kongers, the Hong Kongers we choose not to see, the Hong Kongers that didn’t give the city its glorious status in the world, the Hong Kongers that don’t matter, on the other hand, represent -by far- the bulk of the population. Massed mainly in Kowloon and the New Territories, they are Hong Kong’s torn in the flesh. Well, not exactly, in fact. Because, however poor they are, they remain remarkably tame.
And considering their numbers and just how poor they are, this is quite astonishing. Poverty rates in Hong Kong are high. Very high. Horribly high. According to the Census and Statistics Department, in 2018, a staggering 20.4% of the population (1.406 million people) lived in poverty before any intervention of the Policy Effectiveness in Poverty Alleviation. And, after said policy intervention, the share of the population that remained in poverty… still reached a mind-blowing 14.9% (1.024 million people)[1].

You may think that those high poverty rates are the result of a poverty line that was set very high. And you would be sadly mistaken. If anything, the poverty threshold in Hong Kong is ludicrously low. As a matter of fact, in Hong Kong, the poverty line for a 1-person household was set at $4,000HKD per month (in 2018), and $10,000HKD per month for a 2-person household[2].

In comparison, the national poverty lines in the United States for the year 2018 were set at $12,170USD per year ($7,897.76HKD per month) for a 1-person household, and $16,460USD per year for a 2-person household ($10,681.67HKD per month)[3]. In Germany and France, for the year 2018, the respective poverty lines were set at €13,098EUR and €12,180EUR per year ($9,498.40HKD and $8,832HKD per month) for a 1-person household[4] (no data for 2-person households was available).
Those numbers show that, compared to other first-world countries, the poverty line in Hong Kong is set ridiculously low. And yet, notwithstanding those low thresholds, 20.4% live under the poverty line. Or, put otherwise, 1.406 million people live with less than $5,000HKD ($640USD) per month. How is that possible?
Now, how come the poverty line in Hong Kong is so low compared to other first-world countries? To answer this question we must first understand how the poverty line is determined. In the member states of the European Union, for instance, the poverty line “is set at 60 % of the national median equivalised disposable income (after social transfers).”[5] In Hong Kong, on the other hand, the poverty line is “set at 50% of the median monthly household income before policy intervention (i.e. before taxation and social welfare transfer).”[6]
As such, both Hong Kong and the member states of the European Union use a similar Relative Income Poverty Lines. Yet, the threshold varies differs dramatically between Hong Kong and the European countries. This is especially the case when comparing the poverty line in Hong Kong with the thresholds in West European countries.
What this means, in fine, is that the median household income in Hong Kong is much lower than in other first world countries. Bear in mind that poverty thresholds in the European Union are set after taxation; whereas in Hong Kong poverty thresholds are set before taxation.
If you think that this lower median income in Hong Kong reflects a lower cost of living in relative to the United States, Germany or France, you’d be sadly wrong. Sort of. Life in Hong Kong is indeed very cheap… as long as you don’t take into account housing. Once housing is factored in, however, life in Hong Kong becomes excruciatingly expensive.
In fact, a 2019 study by the Economist Intelligent Unit concluded that Hong Kong was the most expensive city in the world alongside Singapore and Paris[7]. And a survey by Demographia International Housing Affordability points out that, as of 2019, Hong Kong, topped the ranking of most expensive housing markets in the world “for the ninth straight year”[8].

With a Median Multiple (“median house price divided by the median household income”[9]) of 20.9, not only was the housing market in Hong Kong the least affordable in the world, it literally obliterated the market in Vancouver, Canada which ended with a Median Multiple of “only” 12.6[10]. Needless to say that, with such terrible figures, Hong Kong is ranked among the Severely Unaffordable housing markets. In fact, it is by far the most severely unaffordable housing market in the world.

Real Estate firm CBRE came to the same conclusion in April 2019. With an average property price of $1,235,220USD ($9,619,603HKD), Hong Kong ended ahead of Singapore, which average property price reached a respectable $874,372USD (6,809,404HKD)[11]. That is, nearly $3,000,000HKD less than in Hong Kong.

Now, what do all those numbers mean? Well, according to Midland Realty, it means that in 2019, you’d pay, on average between $14,000HKD and $17,000HKD per square foot… in the poorest districts in Hong Kong (Sham Shui Po, Kwai Tsing, Wong Tai Sin, and Kwun Tong)[12].
Putting those numbers in parallel with the poverty rates we saw earlier on, it means that, for one Hong Konger in five, one square foot of an apartment in the poorest districts of Hong Kong represents three to four months of earnings. Now, just to make sure there is no misunderstanding, let’s rephrase this. We’re not talking about three months of savings; but three months of earnings! For one square foot. In the poorest neighborhoods.
Let that sink in: three to four months’ worth of earnings to buy one square foot in the poorest neighborhoods of the city. Just for argument’s sake, it would take those 20.4% of Hong Kongers living below the poverty line nearly half-a-years’ worth of earnings to afford themselves… one square foot in Wan Chai.
With such absurd numbers -three months to buy one square foot in the poorest districts- needless to say that inequality rates in Hong Kong have gone through the roof. And that is a euphemism. The inequality rates in Hong Kong are even more horrendous than one might imagine.
If 20.4% of the population of Hong Kong lives below the poverty line, Hong Kong also boasts the highest density of ultra high net worth (UHNW) people (i.e. “individuals with $30m (USD) or more in net worth”[13]) in the world with 1,364 ultra wealthy individuals per million adults in 2018. Well ahead of Switzerland, which ranked second with “only” 848 ultra wealthy individuals per million adults[14]. This equated to a total of 8,950 ultra high net worth people for a total Hong Kongese population (at the end of 2018) of 7,486,400[15]. Or, in other words 0.12% of the population.

To put those numbers in perspective, in Hong Kong, 0.12% of the population had a net worth of $30 million USD or more (nearly $233,600,000HKD) in 2018, whilst 20.4% of the population lived with roughly $5,000HKD per month (or less). In the United States, which is known for its high inequality rates, only 0.024% of the population had a net worth of $30 million USD or more; and “only” 11.8% of the population lived in poverty[16].
More striking, perhaps, is the case of Switzerland. In 2018, with 848 UHNW people per million adults, Switzerland was home to the second densest UHNW community in the world behind Hong Kong. In absolute numbers, this represented 6,145 people or 0.072% of the Swiss population.
On the other hand, the Swiss Federal Statistics Office indicated that in 2017, 8.2% of the population lived in poverty[17] (against 20.4% in Hong Kong). Bear in mind, though, that in Switzerland the poverty threshold was set at 2,259CHF per month ($18,147HKD per month)[18] for a single-person household, against $4,000HKD per month in Hong Kong, the most expensive city in the world.
It is readily obvious from the abovementioned numbers that inequality in Hong Kong is going to be mind-boggling. And the Gini coefficient -a measure of statistical dispersion intended to represent the income or wealth distribution of a nation’s residents- confirms just that. With an index of 53.9 (0=perfect equality; 100=perfect inequality), Hong Kong is ranked 9th most unequal economy in the world[19].
It is noteworthy that the city is surrounded, in the ranking established by the CIA, exclusively by African and South-American countries -and Papua New Guinea- that are infamously riddled with corruption and/or poverty. For your information, out of 159 assessed economies, the United States is ranked 39th (coefficient of 45.0), which is not great either; and Switzerland is ranked 135th (coefficient of 29.5), which is quite remarkable.
To sum it up, in Hong Kong, poverty rates are tremendously high, notwithstanding a poverty threshold that has been set very low. The housing market in Hong Kong is head and shoulders above its competitors in the ranking of least affordable markets in the world. Inequality rates in Hong Kong are matched only by countries with rampant corruption and/or poverty.
With such horrifying figures, the situation is ripe for large-scale revolts all over the city. In fact, the situation has been ripe for wide-spread revolts for years now. In no country in the world would the population have let the situation reach such extremes with such passivity.
Yet, in Hong Kong, no one seems to be bothered by the high poverty rates. Or the horribly unaffordable housing market. No one demands changes. Or, rather, Hong Kongers would like changes, but with such lack of passion and urgency that decision-makers don’t feel compelled to take immediate and drastic actions.
Quite the contrary. An article published by the Cato Institute in 2004 sheds light on the Legislative Council’s ambitions for Hong Kong. Then financial secretary Henry Tang “emphasized that the underlying principle guiding future development should be that the ‘market leads and the government facilitates.’”[20]
As a matter of fact, according to both Fraser Institute and the Heritage Foundation, Hong Kong was the freest market in the world in 2017 and 2018 respectively[21][22]. Fraser Institute further indicates that Hong Kong has been the freest economy since 1990; whilst the Heritage Foundation concluded that Hong Kong has been the freest market ever since they started publishing their annual Index on Economic Freedom, 25 years ago.

The Cato Institute pointed out that “Hong Kong has been able to make the transition to a service economy because of its flexible labor (…)”. Otherwise put, because labor in Hong Kong is not (was not?) very specialized. Or, to use crude words, the economy of Hong Kong back in 2004 was based on unskilled -cheap- labor.
It is a secret to no one that Hong Kong’s policy is geared entirely toward the economy. What’s good for the economy is good for Hong Kong. What’s good for the capital owners is good for Hong Kong.
But in 2015, already, the South China Morning Post (SCMP) pointed out the limits of the so-called laissez-faire policy dear to the Legislative Council. “(…) the working class who only have labour capital have seen their real disposable incomes stagnate. Housing conditions are poor, with the less fortunate living in shelters resembling slums in less developed economies. Our public hospitals are overcrowded, and standards are falling in our public schools.”[23]
This is particularly clear when studying the evolution of poverty rates in Hong Kong. Between 2009 and 2018, poverty rates have dropped by a measly 0.2% (before policy intervention) and 1,1% (after policy intervention), which translates the government’s im-passionate involvement in social matters.
In the meantime, the Midland Realty Property Index has increased from 69.29 (December 2009) to 161.01 (December 2018)[24]. That is, a 132.37% increase. Cumulative inflation in Hong Kong over that same time-period, on the other hand, was 31.7%[25].
In comparison, cumulative inflation over the same time period was 1.5% (!) in Switzerland[26]; 8.6% in France[27]; 10.9% in Germany[28]; 13.8% in the United States[29]; and 20.1% in the United Kingdom[30]. And in China, which has witnessed a mind-blowing yearly growth in GDP over the last thirty years, cumulative inflation rate between 2009 and 2018 was only 22.0%[31]. Well behind the inflation rate in Hong Kong.
In those ten years, the poverty line in Hong Kong has only been leveled-up by 21.21% (1-person household) and 44.93% (2-person household).Those figures show that the poverty line for a single-person household in Hong Kong did not follow the same trend as the inflation and the Property Index.
The poverty line for a two-person household, however, rose faster than the inflation rate, which is good news. But, considering the Property Index rose by a whopping 132.37% over that time-frame, it is obvious that Hong Kongers living below the poverty line were worse off in 2018 than they were in 2009.
More telling, perhaps, regarding the lack of involvement of the Legislative Council in social matters, is the fact that the Minimum Wage Ordinance wasn’t voted before January 2011, and didn’t come into effect before 1 May 2011 at a staggering hourly rate of $28HKD (Ordinance Cap. 608; Sch. 3[32]). Since then, the hourly minimum wage rate has been revised four times and, as of 1 May 2019, the minimum wage in Hong Kong is set at $37.5HKD ($4.82USD). This represents a 34% raise since 2011.
As a comparison, minimum wage in the State of New York, USA is set at $15.00USD ($116.78HKD) per hour[33]; in Vancouver, Canada -second most unaffordable housing market according to Demographia International Housing Affordability- as of 1 June 2019, minimum wage is $13.85CAD ($83HKD) per hour; in Switzerland -second highest density of UHNW people in the world according to Wealth-X- minimum wage is 2,200CHF per month (approximately $100HKD per hour); in Germany -largest economy in Europe- minimum wage is set at €9.19EUR ($80.22HKD) per hour[34] as of 1 January 2019; and in France, €10.03EUR ($87.56HKD) per hour as of 1 January 2019[35].
It is, further, noteworthy that in most European countries, contrary to Hong Kong, minimum wages are revised once a year. As such, as of 1 January 2020, minimum wage was set at €10.15EUR[36] ($88.61HKD) and €9.35EUR[37] ($81.74HKD) in France and Germany respectively (for example).
One may think that minimum wage is low in Hong Kong because Hong Kongers are the beneficiaries to a first-grade social security system, but nothing could be further from the truth, as can be seen from the high poverty rates. Remember the words from former financial secretary Henry Tang: “market leads and the government facilitates.”[38]
As mentioned previously, Hong Kong is the freest economy in the world, which means that the government does not regulate the market. This, consequently, also means that both corporate and personal tax rates are very low. In fact, Hong Kong’s corporate and personal tax rates are among the lowest in the world.
As a result, Hong Kong’s government revenues are not as high as one may expect from such a thriving economy. With revenues amounting to $560,000,000,000HKD in 2017[39], Hong Kong’s budget amounted to only 31.5% of the budget of Switzerland that same year (221,806,285,000CHF[40][41] or $1,776,117,339,000HKD). Or, if we take into account the 1,000,000 population difference between both countries, Hong Kong’s government revenues still only amounted to 35.7% of the Swiss government revenues for the year 2017.
Now, Switzerland is the perfect Western country to compare Hong Kong with. Not only is Switzerland the Western country most similar in size, population-wise, to Hong Kong (8.5 million inhabitants in Switzerland for 7.5 million inhabitants in Hong Kong); in 2017 both countries also recorded the exact same GDP per capita -$61,400USD- according to the CIA World Factbook[42].
And yet, in 2017, social security in Hong Kong only represented 14% ($501,000,000,000HKD) of the government’s expenditures[43]. In Switzerland, however, social security amounted to 87,284,522CHF ($698,736,776HKD) in 2017, whilst total expenditures reached 216,179,286CHF ($1,730,642,087HKD)[44][45]. In other words, social security in Switzerland represented 40% of the total government’s expenditures.
Remember that in 2017, in Switzerland only 8.2% of the population lived under the poverty line[46], which was set at an astronomical 2,259CHF per month ($18,147HKD per month)[47] for a single-person household. In Hong Kong, 20.1% of the population (in 2017) lived under the poverty line, which was set at a measly $4,000HKD per month for a single-person household.
To make this comparison even more compelling than it already is, 15,0% of the population in Switzerland was considered at-risk-of-poverty in 2017 –i.e. earning less than 30,018CHF per year ($20,022HKD per month)[48]. Otherwise put, the proportion of the Swiss population that lived below the at-risk-of-poverty threshold was lower than the proportion of the Hong Kongese population that lived below the poverty line.
To be considered at-risk-of poverty, the monthly earnings of a Hong Konger may not exceed $4,800HKD[49](1/4th of the Swiss threshold). And, in 2017, no less than a quarter (25.9%) of the population in Hong Kong -1 person in 4- was considered to be at-risk-of-poverty before recurrent cash intervention and 22.1% was still at risk after intervention[50]. In 2018, those figures had risen to 26.5% and 20.6% of the population respectively[51].

Just for the sake of argument, if the Swiss at-risk-of-poverty threshold (30,018CHF per year or $20,022HKD per month) was applied to Hong Kong, no less than 58% of the Hong Kongese working population would be considered at-risk-of-poverty (54% if we domestic helpers are excluded from the calculation)[52].
Bear in mind, again, that Hong Kong is the most expensive city in the world in which to live. Yet, somehow, the poverty line and at-risk-of-poverty threshold are set ridiculously low.
As a consequence of the low thresholds, the requirements to be eligible for social security, in Hong Kong, are ridiculously low as well. And the allowances one has right to follow suit, obviously. In Hong Kong, the Comprehensive Social Security Assistance Scheme (CSSA) “provides a safety net for those who cannot support themselves financially. It is designed to bring their income up to a prescribed level to meet their basic needs.”[53]
And by “basic needs” they really mean basic. Other than legal requirements, applicants’ assets may not exceed $32,000HKD for single able-bodied adults or $48,000HKD for single children, disabled people, and the elderly. In the case of families, the asset limit depends on two factors: the number of members; and the number of disabled or elderly members. Either way, the asset limit remains horrifyingly low[54].
In other words, to be eligible to the CSSA Scheme, one’s total possessions cannot exceed what the overwhelming majority of Gweilos in Hong Kong earn in one month (or even less). Needless to say that with such a low threshold, as of 31 October 2019, only 220,775 Hong Kongers (3% of the population) met the requirements to have right to the CSSA Scheme[55].
People above the age of 65 and severely disabled people can also apply to the Social Security Allowance Scheme (SSA) provided they are “not in receipt of (…) assistance under the Comprehensive Social Security Assistance Scheme.”[56] And, as is the case with the CSSA Scheme, the threshold to be eligible for the Normal Old Age Living Allowance (for people aged 65 and above) is set ridiculously low: a limit of $343,000HKD in assets and/or a monthly income of $7,970HKD for a single person; and a limit of $520,000HKD in assets and/or a combined monthly income of $13,050HK for a married couple. To be eligible for the Higher Old Age Living Allowance, on the other hand, the asset limits are set at $150,000HKD and $227,000HKD for a single person and a married couple respectively. Monthly income limits, however, remain unchanged.
Now, bear in mind that those are people who have worked their entire lives we are talking about. Possessing assets of such low value after 40 years of hard labor proves that recipients of the SSA Scheme earned too little money in their working years to be able to save anything.
And, as of 31 October 2019, a staggering total of 557,765 elderly people -41.86% of the population aged 65 and above- were the recipients of Old Age Living Allowances (Normal & Higher combined). And, if we include the recipients of Disability Allowances and Guangdong or Fuijan Scheme Allowances, that number rises to a total of 988,685 people[57]. That is, 13.14% of the total population of Hong Kong.
What those figures indicate is that, in Hong Kong, to be eligible for social security -CSSA or SSA- you must be poorer than poor. Literally. People living right below the poverty line are still considered too wealthy to be eligible for those Schemes. Indeed, recipients of the CSSA Scheme and the SSA Scheme combined only add up to 1,209,460 people; or 16.23% of the population of Hong Kong. Far from the 20.4% of the population who live below the poverty line.
For the “lucky” ones whose applications are accepted, the allowances they can claim are not very high, though. Regarding the CSSA Scheme, the maximum a person can hope to receive from the government is $6,535HKD per month. And that person would be a single disabled child -as defined by the Social Welfare Department- who requires constant attendance[58].
As a matter of fact, depending on the degree of the disability (and other factors), disabled recipients of the CSSA Scheme can receive allowances ranging from $3,510HKD to $6,535HKD. Able-bodied recipients of the CSSA Scheme, on the other hand, cannot expect more than $1,810HKD (able-bodied member of a four-member family) and $3,050HKD (able-bodied single child) per month[59].
Although, on top of those basic allowances, they can also apply for a limited range of so-called supplements which amount to $285HKD to $355HKD. And an annual long-term supplement of $2,240HKD (single person) or $4,480HKD (family comprising two or more members who are old, disabled, or in ill-health) “is payable to families involving any member who is old, disabled or medically certified to be in ill-health for the replacement of household and durable goods if they have received assistance continuously for 12 months or more.”[60]
Under the SSA Scheme, however, allowances range from $1,385HKD (Old Age Allowance) to $3,585HKD (Higher Old Age Living Allowance). Bear in mind that those allowances are designed for people aged 65 and over with very limited assets and a monthly income limited to $7,970HKD for a single person. How one can pay -the most modest- rent, food, and medical bills -that come with old age- with such limited resources remains a mystery.
All those figures depict a bleak social landscape of Hong Kong. And yet… And yet, against all odds, Hong Kong is one of the safest cities in the world to live in. In fact, in 2019, the Economist Intelligence Unit ranked Hong Kong 20th safest city in the world overall. And 4th safest city in the world when it comes to personal security[61].
Of course, one could mention the protests that have been shaking the city in the latter half of 2019 and in 2020. However, those were political protests. Not social protests. Studying said protests from closer up, one notices that the social situation in Hong Kong played absolutely no role in the unrest. None of the Five Demands protestors held so dearly were related to social issues. And never did the protestors ask for social improvements. No, their demands were strictly political.
In fact, notwithstanding the poverty that has always been rampant in Hong Kong, never have Hong Kongers revolted against their living conditions. The revolts of 1956 between Nationalists and Communists; the revolts of 1967 between Communists and the British ruler; the protests of 2005, 2010, 2014, and 2019-2020 were all politically motivated.
To be totally fair, though, we must mention the Occupy Central movement of 2011-2012, which was a socio-economic demonstration. But with only a few hundreds of participants it never gained any traction in Hong Kong.
The fact is that Hong Kongers have never complained about their living conditions. No matter the terribly high poverty rates, Hong Kongers do not budge. No matter how ridiculously low the minimum wage, Hong Kongers do not budge. No matter how ridiculous the social security in the city, Hong Kongers do not budge. No matter how high the inequality, Hong Kongers do not budge.
Truth be told, one must salute Hong Kongers’ resilience toward… the unacceptable. No matter how you turn the figures provided by the government and other organizations, the social situation in Hong Kong is catastrophic: 20.4% of the population living below the poverty line; 26.9% of the population at-risk-of-poverty. A social security that is a joke. Or, to verbalize it more accurately, a direct and blatant insult thrown at the face of the poor. And yet…
What would it take for the Hong Kongers to realize that they are being taken advantage of? What would it take for the Hong Kongers to finally say “enough!” Hong Kong is not a poor city. Far from. In fact, Hong Kong boasts the 17th highest GDP per capita in the world averaging $61,400USD[62]. Well, needless to say that the 26.9% of Hong Kongers who are at-risk-of-poverty do not benefit from that high GDP per capita.
The funny thing is that Hong Kongers love money. The Hong Kong Jockey Club, for instance, has branches all over the city and the yearly turnover hits record after record; with a record turnover of $247.5 billion HKD in 2019[63]. Said money, obviously, comes from Hong Kongers who dream of winning the lottery. Yet, no Hong Konger would think to demand the money that they rightfully deserve.
No, let’s be serious, that would require too much effort. It’s much better to throw your money away at the lottery. And leave it up to the incredibly unfavorable odds of 1 in 13,983,816 or a chance of 0.000007% to win Mark 6, for instance? Better than to fight for better working and living conditions, apparently.
And year after year, in Hong Kong, the wealthy become wealthier. And year after year, the poor become poorer. And more numerous.
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