How Hong Kong became one of the world’s most unequal cities

Summary

Hong Kong is a city of stark inequality, where the richest earn 81 times more than the poorest. Despite its booming economy, with wealth concentrated in the hands of a few, over a million residents live in poverty. The city's shift from manufacturing to finance and real estate has fueled the wealth gap, leaving many struggling to survive. Tax policies favor the wealthy, while wages for the rest remain stagnant. Though the government has made efforts to address poverty, experts argue more needs to be done to tackle the growing divide and ensure equitable opportunities for all.

Takeaways

• 😀 Hong Kong has a stark wealth gap, with the richest earning 81 times more than the poorest residents, according to Oxfam.
• 😀 The wealth gap in Hong Kong has more than doubled over the past five years, with the top 0.001% owning 85% of the city's wealth.
• 😀 The city's transition from a manufacturing hub to a finance and services center has contributed to increasing inequality.
• 😀 Highly skilled professionals now dominate the economy, while manual laborers have lost their jobs due to factory closures.
• 😀 Hong Kong's tax system is designed to benefit the wealthy, with no wealth tax, no inheritance tax, and low corporate profits taxes.
• 😀 As the wealthy see their assets grow, wages for the majority have stagnated, deepening income inequality.
• 😀 The city's policy-making bodies, such as the Executive Council, have significant representation from business and finance sectors, which shape policy to benefit the rich.
• 😀 Despite working full-time, many of Hong Kong's low-income workers, like street cleaner Ly Ping, are unable to escape poverty due to high living costs.
• 😀 The government has set poverty alleviation as a priority, but social workers argue that more comprehensive and effective solutions are needed.
• 😀 The rapid rise of Hong Kong's wealth has left over 1 million residents below the poverty line, highlighting the struggles of the working poor.
• 😀 The city's wealth engine has contributed to immense prosperity for the rich, but left many, including vulnerable groups like the mentally ill and the disabled, behind.

Q & A

What is the current state of income inequality in Hong Kong?

Hong Kong is facing a staggering wealth gap, with the richest residents earning 81 times more than the poorest. The wealthiest 50 people own 10% of the city's total wealth, while over a million residents live at or below the poverty line.

How has Hong Kong's wealth gap evolved over time?

The wealth gap in Hong Kong has significantly worsened, more than doubling in the five years leading up to 2024. This expansion is linked to a shift in the city's economic focus, particularly towards finance and real estate.

Why is Hong Kong considered one of the most unequal societies in the world?

Hong Kong's wealth disparity is extreme, with the top 0.001% of residents owning about 85% of the total wealth. This level of inequality is unparalleled, even compared to other wealthy nations.

What led to the rise in income inequality in Hong Kong?

The shift from manufacturing to finance and services, along with rapid expansion in the financial and real estate sectors, has resulted in higher salaries for skilled professionals while leaving manual laborers struggling as factories closed down.

How did China's economic policies impact Hong Kong's economy?

China's liberalization of its economy in the late 1970s and 1980s led to the relocation of many manufacturing industries to mainland China, weakening Hong Kong’s position. In response, Hong Kong pivoted to finance and services, but at the cost of rising inequality.

What role has Hong Kong's tax system played in increasing wealth disparity?

Hong Kong’s tax system is structured to favor the wealthy, with low taxes on income, investments, and corporate profits. The absence of a wealth tax, along with tax exemptions for certain assets, has contributed to the growing wealth gap.

How has the government’s economic focus impacted the working class?

While the economy grew, wages for the majority stagnated. The rich saw significant increases in income through investments, while the working class, especially in manual labor, faced stagnant or declining wages.

What is the role of the Executive Council in shaping Hong Kong’s policies?

The Executive Council, which advises the city’s leader on policy decisions, includes representatives from business and finance sectors, giving the wealthiest individuals considerable influence over policy, often to their benefit.

What is the situation of the working poor in Hong Kong?

Many workers in Hong Kong, such as street cleaners like Ly Ping, earn far below the median income and live close to or below the poverty line, despite being employed full-time. The high cost of living in the city makes it difficult for them to escape poverty.

Has the Hong Kong government taken any steps to alleviate poverty?

The Hong Kong government has set poverty alleviation as a priority, with initiatives like reducing public housing waiting times and providing more housing. However, experts argue that these measures are not enough, and more comprehensive and effective policies are needed.