Coldplay gives Hong Kong rush of blood to the head
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Hudson Lockett
HONG KONG, Oct 17 (Reuters Breakingviews) -Hong Kong's economy is on the rocks, but the government wants to be there to help — in exhausting detail. Chief Executive John Lee’s 2.5-hour speech on Wednesday outlined a 225-point plan to increase consumption and get its economy out of the doldrums. Top items included easing mortgage rules, streamlining initial public offerings and cutting the city’s liquor tax to “boost the development of high value‑added industries including logistics and storage, tourism as well as high‑end food and beverage consumption.”
Those sectors are all hurting, true. Yet, demand for Coldplay’s first gig in the city in 15 years shows affluent Hong Kongers’ spending power is surprisingly resilient. Tickets for the UK band’s show, with the most expensive priced at $850, were snapped up within 90 minutes of going on sale on last week. Fans who missed out had to scavenge for seats on secondary platforms tying tickets to stays at the city’s underbooked hotels.
So why are locals not spending more? One reason is the growing popularity of shopping and dining excursions across the border in Shenzhen that offer better value than the city’s malls and restaurants. Another is the overwhelming cost of housing, which remains stratospheric despite years of falling home prices.
Lee made tackling the shortage of affordable apartments a major plank of his address, promising to reduce wait times for public housing. But so has every one of the city's leaders for the past two decades, with little to show for it. Official figures from June show 123,000 applications for public rental housing with an average expected wait time of five-and-a-half years, up from 92,000 households waiting less than two years on average in 2004.
Even Lee’s cut to the liquor levy — which accounts for just 0.1% of tax revenue, per the Financial Times — stops short of fully abolishing the duty as was done in 2008 for wine, which promptly boosted sales.
These efforts reflect Lee’s approach as a whole: a deluge of half-measures seeking to keep the city afloat until things get back to normal. But Hong Kong has shown no sign of fully recovering from its post-pandemic slump, with tourism from the mainland still depressed, port throughput down and a fifth of the population still living in poverty, per Oxfam.
But everything's not lost. A better plan to boost spending would be to shrug off the city’s distaste for welfare and enhance the social safety net that Lee’s predecessors spent decades shredding. It shouldn't take a scientist to work out that turning Hong Kong’s 1.4 million impoverished into bigger spenders can be a cost-efficient proposal that even its budget-minded government should be able to get behind.
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CONTEXT NEWS
Hong Kong’s chief executive John Lee said in his annual policy address on Oct. 16 that authorities would streamline listings procedures, cut the city's liquor duty and reduce wait times for public housing, as the city continues to grapple with slow growth and tepid spending.
Tickets for an upcoming Coldplay concert in the city have sold out rapidly, forcing Hong Kongers to turn to secondary sellers offering deals which tie tickets to booking stays at underutilised hotels in the city.
Graphic: Hong Kong's retail slump is worse than China's https://reut.rs/3Y9wWZZ
Graphic: Hong Kong's policy speeches drag on https://reut.rs/3Y8tIGb
Editing by Antony Currie and Ujjaini Dutta
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