Hong Kong and Singapore regularly top the Heritage Foundation’s Index of Economic Freedom. But is Hong Kong really a free country in terms of economic freedom? At a maximum tax rate of 15%, no taxes on capital gains, no VAT or sales tax and a company setup process that takes, well, maybe one hour for an Ltd, the answer is obvious – YES. But if you look at the local economy and who runs the show, the answer is a clear – NO!
I came across this article on Chinasmack, taken out of Time Out Hong Kong. It’s a fairly long read but nicely describes how Hong Kongers get screwed over by the men who rule Hong Kong. And these men are not the politicians but the businessmen.
So far, I haven’t seen a country or city where the influence of a few men is so profound. Example? How about Hong Kong’s tycoon, Mr Li Ka Shing. Through his company Hutchison and other companies he is involved in Hong Kong’s telecommunication (PCCW, 3), real estate, retailing (Park’N Shop), harbor facilities and much, much more.
In a “normal” free economy you’d have a government institution taken care of fair competition. Not so in Hong Kong. There is none. And that’s why consumers in Hong Kong gets pretty much screwed over.
Grocery shops are limited to Park’N Shop and Wellcome. The former part of Mr Li Ka Shing’s empire, the latter part of Jardine’s. A few years back the French retailer Carrefour tried to enter the market, but was thrown out by Park’N Shop and Wellcome (the conglomerates also control a large part the property supply so Carrefour couldn’t find enough sites).There are only two drug stores, Watsons and Mannings, owned by the conglomerates. Property? There are a handful of tycoons keeping prices up, supply low while screwing you over. A 700 square feet apartment might only be 500 square feet. How does it work? Well, the property developers include the “open area”, that means the area outside your door, part of the club house, swimming pool, etc into your apartments area. Sounds very stupid? It certainly is!
The next Chief Executive seems to become Henry Tang. As a son’s tycoon, the situation will certainly not improve. I reckon if the same situation in Hong Kong developed in Europe, say France, the country would be up in arms and marching towards the Elysee…..