London Daily

Focus on the big picture.
Wednesday, Oct 01, 2025

Social Justice: China presses Hong Kong magnates to share the wealth

Social Justice: China presses Hong Kong magnates to share the wealth

Beijing pushes super-rich to help solve city's chronic housing shortage
Hong Kong's real estate tycoons are belatedly learning the merits of inclusive capitalism -- but only with a prod from Beijing.

When Chinese state media accused Hong Kong's billionaires last month of land hoarding, sowing the seeds of the housing shortage now fueling the biggest protests in the city's history, three of the "big four" developers worth a combined $120 billion took heed.

"In the past, companies only talked about [creating] shareholder value," Adrian Cheng, designated heir to the New World Development property empire told reporters last month. "In the future, I think we need to think more about stakeholder value."

Vowing to donate a sixth of his family's vast agricultural land holdings, or three million square feet valued at HK$3.4 billion ($434 million), Cheng outlined a plan to build homes for the underprivileged.

While calls for democratic inclusion and investigations into police brutality have ranked high on the protest movement's list of demands, authorities were more concerned by the large-scale displays of violence being deployed by protesters acting as if they had nothing to lose.

Best summed up by a line of graffiti painted on a city wall during this long, hot summer of unrest -- "7K for a house like a cell and you really think we out here are afraid of jail?" -- that sentiment is to a large extent true.

With HK$7,000 being the monthly rent one can expect to pay for flat the size of a prison cell, more than half the monthly salary of HK$12,000 for most university graduates.

The extraordinary influx of capital into the former British colony over the last 50 years has created such a yawning wealth gap that not even the city's professional middle classes can today afford to enter the property market.

All of which has started to unnerve Hong Kong's overseers in Beijing.

In a rare move, several Communist Party mouthpieces last month singled out the housing shortage as a key reason for the turmoil that one official has described as the worst crisis since the semi-autonomous enclave was returned to China in 1997.

"To solve the problems of people's livelihood, it's time for property developers to show their utmost goodwill instead of just minding their own business, hoarding lands and earning the last penny," thundered one People's Daily editorial.

Following Adrian Cheng's promise to make farm land available for housing, the Lee family, which controls Henderson Land Development, the property conglomerate valued at more than HK$180 billion, quickly followed suit.

The group announced that it was considering lending about 100,000 square feet of farmland to the government to build " transitional housing", as well as donating land to various charities.

Not to be outdone, a spokesman for the Kwok family's Sun Hung Kai Properties said that while accusations that the family had engaged in land hoarding land were "unfair" and "untrue," the group was nevertheless "keen" to support the government's attempt to increase the supply of affordable housing.

Sun Hung Kai Properties' self-sacrifice nevertheless came with layers of get-out clauses: The land could only used for public housing and could not be put to public tender in future.

The spokesman also stressed that Hong Kong's Lands Resumption Ordinance used to to seize private owners' land should not cover land earmarked for private housing or commercial development purposes, as such land enjoys "private property rights enshrined in the Basic Law," the city's mini-constitution.

"They hope to let the society know that they have done something for alleviating the problems," said Victor Zheng, assistant director of the Hong Kong Institute of Asia-Pacific Studies.

Zheng added that Hong Kong's powerful families had "to a very large extent contributed to the current inherent social problems" after benefiting from decades-long monopolies property and key utilities.

According to the latest Gini coefficient, a widely used index to measure income disparity, Hong Kong had reached an all-time high at 0.539 in 2016, well above passed 0.4 level that the United Nations has defined as "alarming."

Another Hong Kong government study indicated that the richest 10% of households earned on average 44 times more than the poorest 10%.

"It is time to let the property tycoons know that the rising Gini coefficient and worsening social problems may require them to ultimately pay the price," Zheng said. "They need to do more instead of less."

While making outsized donations goes against a cut-throat business philosophy of making biggest gains, many believe Hong Kong's real estate tycoons now have little choice but to accommodate Beijing's wishes.

For major developers who have accumulated extensive mainland portfolios over the years in order to ride the growth wave of the world's second largest economy, the consequences of not satisfying Beijing can be enormous.

In the six months to June 30, mainland China contributed 32.45% of New World Development's revenue, 21.33% for Henderson Land and 7.83% for SHKP. And that proportion is only expected to get bigger with so many projects in the pipeline.

"The donation will be viewed favorably by the central government as such gestures are conducive to easing the social tensions," said Phillip Zhong, an analyst at Morningstar Investment Management. "And the political value is important," he said, adding that in return, they could expect the government to accommodate other, more commercially valuable projects.

Conspicuous by his indifference to Beijing's foot-stamping was Li Ka-shing, Hong Kong's richest man and the founder of the multinational conglomerate CK Hutchison Holdings.

Stressing other donations Li has made toward education and supporting small businesses, a spokeswoman for Li's property vehicle CK Assets Holdings told Nikkei Asian Review that "building houses on farmland is a time-consuming project and it will take long time to benefit the people in need."

After Li sold a string of mainland properties over the past few years, bringing down the mainland contribution to CK Assets' bottom line from 48% in 2016 to just 13% in the first half of this year, Li's decision not to follow Beijing's lead becomes more understandable.

Despite the People's Daily blasting him as "ungrateful" and questioning his patriotism, Li has brushed off the criticism as "ridiculous and illogical". And given the political and policy uncertainties across the border thanks to the trade war with the U.S., Li's sell down of his mainland assets looks even more prescient.

Some are even questioning whether the sudden generosity of property tycoons can actually help ease the housing shortage.

"Developers are likely to select farmland with minimal commercial value, either due to zoning or lack of infrastructure.. and the farmland conversion has generally been a long and difficult process," said Morningstar Investment Management's Zhong. He expects little impact to companies' profitability in the near term.

Still, with the current political winds shifting against them, trying to bargain with Beijing with might not help the tycoons get what they want either.

"What Beijing needs them to do now is to make a sacrifice to balance the interests of society," said Joseph P.H. Fan, professor of finance at the Chinese University of Hong Kong. With the central government now more aware of the outsized influence exerted by Hong Kong's elite, Beijing can be expected to pay much closer attention.

"Those families' interest is deeply intertwined with China and Hong Kong," Fan said "Whether [the successors] like it or not, how willing they are to accommodate Beijing's requests will determine the fate of their families."
Newsletter

Related Articles

0:00
0:00
Close
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
Nvidia Pledges Up to $100 Billion Investment in OpenAI to Power Massive AI Data Center Build-Out
U.S. Signals ‘Large and Forceful’ Support for Argentina Amid Market Turmoil
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
Vietnam Faces Up to $25 Billion Export Loss as U.S. Tariffs Bite
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Indonesia Court Upholds Military Law Amid Concerns Over Expanded Civilian Role
Larry Ellison, Michael Dell and Rupert Murdoch Join Trump-Backed Bid to Take Over TikTok
Trump and Musk Reunite Publicly for First Time Since Fallout at Kirk Memorial
Vietnam Closes 86 Million Untouched Bank Accounts Over Biometric ID Rules
×