Hong Kong is “finally back on track,” proclaimed Chief Executive Carrie Lam in a forum marking the upcoming 25th anniversary of the city’s handover from Britain. The city has seen dramatic changes since its return to China on July 1, 1997. In six graphs, HKFP looks at some of them.
Richer, but also more unaffordable
Hong Kong’s economy has shrugged off two financial crises, two pandemics and months of civil unrest to flourish over the past quarter-century, with per capita real GDP increasing by 67 per cent from HK$229,810 in 1997 to HK$383,838 last year. But it has also become more unaffordable, especially in terms of housing.
The median monthly household income increased by HK$8,500 from the handover to last year. But adjusted for inflation, the rise was just over HK$1,600 in that period, a 6.5 per cent increase.
While the cumulative inflation rate was 35.9 per cent from 1997-2021, domestic property prices shot up by 140.8 per cent, according to an index calculated by the Ratings and Valuation Department.
Successive post-handover administrations have tried and failed to curb sky-high housing prices, by increasing land supply, promoting construction and introducing harsher taxes to curb speculation.
But the long-term market has been undeterred by protests, pandemics, and overseas sanctions. It declined after the 1997 financial crisis and the 2003 SARS pandemic but has yet to see a significant prolonged dip, even during the anti-extradition bill protests in 2019, which the government branded “black riots,” and the Covid-19 pandemic.
Living space is also shrinking, with flats under 40 square metres (430 square feet) becoming the dominant size and the category with the most significant increase in prices.
In 1997, flats smaller than 40 square metres only accounted for seven per cent of the total number of completed domestic properties. In 2021 the figure was 36.5 per cent. At its peak in 2019, these small flats accounted for almost half of housing completed that year.
Politics: it’s patriots only
Last-minute efforts spearheaded by British Governor Chris Patten to introduce a degree of democracy before the handover faltered in the face of Beijing’s opposition.
Patten wanted a “through train” – a Legislative Council that could remain in office through the handover. But his plans to increase the number of directly elected lawmakers and add nine new “functional constituency” seats angered Beijing, which called them a violation of the Sino-British Joint Declaration on the handover and of the Basic Law, the city’s constitution.
Rather than a “through train,” a Provisional LegCo, whose term ran from January 1997 to June 1998, was elected by a 400-member Selection Committee. With the majority of the pro-democracy camp, including the Democratic Party, boycotting the interim legislature, only six out of 60 seats were occupied by democrats.
The first full LegCo was elected in May 1998, with fewer than half of the 60 seats elected by all eligible voters. The pro-democracy camp took 20 seats.
The number of directly elected seats rose in subsequent years, accounting for half of the 70 seats until Beijing imposed a sweeping political overhaul on the city in 2021 to ensure that only “patriots” govern Hong Kong. While the number of lawmakers increased to 90, the number of directly elected seats shrank to 20 and candidates had to be approved by a pro-Beijing vetting panel.
The city held its first “patriots-only” legislative election last year. With most of the pro-democracy camp not taking part in the race, only one self-proclaimed non-pro-establishment candidate was elected out of 90 members.
Hong Kong’s Basic Law proclaims that universal suffrage is the ultimate aim in electing the Chief Executive . But over the course of 25 years, there have been three failed attempts to revamp the process, with the last failed bid sparking the Umbrella Movement in 2014.
Protesters were angry that while a free vote would be allowed, China would pick which candidates could stand. LegCo rejected the proposed changes in 2015.
While the incoming Chief Executive John Lee has played down the prospects of universal suffrage, Lam, said last year following the LegCo election that the goal “will be realised” if the city stays on the right track.
“That’s why as long as we continue to walk down this right track, after the new Legislative Council takes office, and shows that there can be constructive interaction between the executive and legislature performing meaningful deeds for Hong Kong citizens, I believe that selecting the chief executive by universal suffrage will be realised, and it might not take a long time to realise.”
Emigration: déjà vu
After months of sometimes violent street protests in 2019, Beijing in 2020 imposed a sweeping national security law which has seen scores of arrests and dozens of civil society groups disbanding. Tough Covid restrictions also came into force. For the first time since 1997, Hong Kong has witnessed a considerable decrease in its population and labour force.
The labour force decreased by over 126,000 people between 2019 and 2021, while the city’s population dropped by over 117,000 people in that period, according to official figures.
The trend is not unfamiliar for the older generation. The city also witnessed an exodus in the years leading up to 1997, with people fearful of the uncertainty ahead. Many returned after securing overseas passports as a form of insurance policy.
The Carrie Lam administration has questioned the scale of the current exodus. Lee, who was elected unopposed, told an election forum he hoped to prove that Hong Kong was a place for “chasing dreams, development, freedom, and tolerance.”
Before Hong Kong was handed back to China, the city was promised that its “capitalist system and way of life shall remain unchanged for 50 years.” But 25 year on, political pledges under the Basic Law remain unfulfilled and deep-rooted problems of inequality and scarce housing are still unsolved.
Critics say the security law – seen by the government as essential to curbing violent unrest allegedly fomented by foreign forces – has silenced the city’s once-vibrant civil society.
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