Two elephants are lurking in the government’s latest announcement regarding the increased cost of the Lantau Tomorrow Vision project, or as it is now known, the Kau Yi Chau Artificial Islands. One of those elephants is white, while the other one is sitting undetected in a room. 

To recap, the project involves creating three artificial islands off Lantau, including transportation links to the city. It was originally proposed as a solution to Hong Kong’s dire housing shortage and slated to cost HK$500 billion.

An artist’s impression of the Kau Yi Chau Artificial Islands. Screenshot: Development Bureau.
An artist’s impression of the Kau Yi Chau Artificial Islands. Screenshot: Development Bureau.

The latest estimate has soared well beyond that, which is hardly surprising given the complexity the project, not to mention today’s inflationary environment. The projected spend sits at well over half a trillion Hong Kong dollars and is expected to begin initial occupancy in 2033. 

Until now, much of the debate over the feasibility of the project has focused on the immense cost and the damage that it would cause to marine life. However, there is another menacing matter, and that’s where the elephants come in, one of which is sitting in a room that few seem to be talking about, namely, future demographics. 

Apparently, 210,000 housing units will be built on the islands to accommodate over half a million residents. This plan is being lauded as the solution to reducing Hong Kong’s severe housing shortage, which sees hundreds of thousands living in sub-divided flats. Presumably, in 2033, when the first units become available, those who are now residing in substandard housing will have more options. 

However, this thinking assumes that Hong Kong’s population will grow, and the housing situation in the 2030s and 2040s will be the same as it is now. In 2020, the government projected Hong Kong’s population would reach a peak of 8.1 million in 2041, but this estimate already appears flawed. The population has fallen from 7.48 million to 7.29 million in the past two years.

Although this recent decline may simply be a temporary result of the pandemic restrictions and the uprising in 2019, other more long-term factors may also be at play.

national day flag raising polytechnic university poly
A family takes a selfie with flags in the background at a flag-raising ceremony at the Hong Kong Polytechnic University on Oct. 1, 2022. Photo: Lea Mok/HKFP.

Hong Kong’s fertility rate, which is presently well under one baby per woman and much below the replacement level of two, suggests the decline will continue. At the other end of life, Hong Kong’s large cohort of aging boomers will be reaching their expiry date in greater numbers in the next decade or two.

Therefore, just as the Kau Yi Chau project is slated to house its first residents, rather than having a housing shortage, Hong Kong is more likely to be experiencing a housing glut, much like Japan is presently suffering. 

Adding to this notional surplus is the Northern Metropolis, a much more sensible project built on existing land, which proposes to house up to 2.5 million residents. 

Thus, the question arises: where will all the people come from to live in the proposed flats in Kau Yi Chau? It is true that more and better housing is desperately needed for those presently living in cramped quarters. However, as Hong Kong’s population numbers continue to languish or even decline, it is likely that through simple attrition, the housing shortage will gradually be resolved on its own, especially if the Northern Metropolis is built.

Yuen Long Kai Shan Shenzhen New Territories
The view from Kai Shan at Yuen Long. Across the harbour is the Chinese city of Shenzhen. Photo: GovHK.

Some may argue that immigration from our huge neighbor to the north could easily fill up housing in Kau Yi Chau. However, this ignores the fact that the mainland is going through their own population bust. Attesting to this, the present daily quota of 150 migrants from China to Hong Kong has not been achieved in years, and the government predicts only 100 arrivals a day in the current five-year period. 

In fact, the decline in fertility coupled with an aging population is not only a local or domestic phenomenon. Worldwide population growth estimates are being rewritten in recognition of the dramatic drop in growth. As Darrell Bricker and John Ibbitson claim in their book, Empty Planet: The Shock of Global Population Decline, “we do not face the challenge of a population bomb but of a population bust”. Clearly, the same applies to Hong Kong.

Now, here’s where that other elephant comes into play. The Kau Yi Chau project, like most enormous projects, is likely to miss its initial target of 2033. And it is also very likely to massively exceed its proposed half a trillion-dollar budget.

Taking all these facts together, that white elephant looms large.

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Paul Stapleton is a long-time resident of several countries in Asia, where he has been teaching and researching at various universities. He writes about environmental, social and educational issues. In his op-eds, Paul's goal is to shed some light on issues of interest as well as generate a bit of heat. Paul’s website is at Academic Proofreading Plus.