World’s Most Expensive Real Estate Hong Kong is considered the most dynamic region in Asia, from finance to industry to culture. After the Chinese reform, Hong Kong, which began to develop in earnest in the 1970s and has grown into a hub for the global financial industry, belongs to Greater China, but has established itself as the financial center of Asia, with the world’s largest hands flocking to free foreign exchange trading, flexible labor markets, minimal regulations to attract investment, low tax rates, and a foreign-friendly environment. Today, however, Hong Kong has been battling population and capital outflows, and rising immigration rates for years. Many multinational corporations have left Hong Kong for mainland China and established Asian hubs in rival Singapore, where foreign investors are also exiting the stock market, where many major Chinese companies are listed. What is the reason for the decline in Hong Kong, which was expected to take off, and what will Hong Kong do? Hong Kong’s population has grown steadily since official statistics began to be released in 1961, before peaking at 7.5 million in June 2019. However, the population, which has since slowed down, has gone downhill until last year, widening its decline. According to the decreasing trend, ▲ 7.48 million in 2020 ▲ 7.41 million in 2021 ▲ 7.29 million in June 2022, a decrease of 2.5% of Hong Kong’s total population in two years.
In particular, 110,000 out of 120,000 people who fell last year left Hong Kong by free will, not by natural decline such as death. China’s intervention and the passage of Hong Kong’s version of “Article 23 of the Basic Law” are largely responsible for the fall of Hong Kong. The law includes a maximum life sentence for treason and civil war, and China’s excessive intervention in Hong Kong and the passage of the National Security Law from 2020 have clouded its status as a free trade hub. Unlike mainland China, the abolition of the U.S. “Hong Kong Policy Act,” which specializes in customs duties, investment, trade, and visa issuance, has also affected Hong Kong. In 2020, then-U.S. President Donald Trump deprived Hong Kong of its status as a free trade zone, which has been in place since 1992, saying, “China has broken its promise to guarantee a high level of autonomy in Hong Kong.” The prolonged U.S.-China conflict that threatens commercial real estate around the world has plunged the Hong Kong real estate market into recession. High-rise buildings that filled downtown Hong Kong are filled with vacancies and house prices have plummeted. Investment demand has shifted to South Korea, Vietnam, and Singapore. According to the Financial Times, the 41-story “Cheongkong Center,” which is scheduled to be completed this year, has a standard occupancy rate of only 10%.
EJ SONG
US ASIA JOURNAL
