18 October 2019
Protesters march in the July 1 rally. The annual protest started in 2003 when half a million Hongkongers took to the streets. Photo: Bloomberg
Protesters march in the July 1 rally. The annual protest started in 2003 when half a million Hongkongers took to the streets. Photo: Bloomberg

2003-2015: How things have changed between two years of the goat

If you’re feeling a bit depressed right now, chances are things will get a lot worse.

Such a feeling has nothing to do with the recent slump in mainland shares, but rather, it’s because of the sense of hopelessness that pervaded this year’s July 1 protest.

Hong Kong youth feel the future is bleak when home prices have gone way beyond their reach, and many feel they won’t be able to afford a home in their lifetime.

But here’s the truth: Just when you feel that everything looks gloomy, hope may just be around the corner.

Let me take you down memory lane. The year was 2003, just 12 years ago, the sixth year after the handover.

Hong Kong then was really in the pits: the economy was undergoing a structural depression, growth in pillar sectors stalled, governance was a failure, and the deadly severe acute respiratory syndrome (SARS) was stalking the land.

Tung Chee-hwa insisted on enacting Article 23 of the Basic Law, igniting that year’s massive July 1 rally in which over 500,000 people took to the streets, but it was really the deteriorating economic and livelihood conditions that sent people’s discontent to a boiling point.

In 2003 Hong Kong’s gross domestic product was HK$1.23 trillion, contracting 10.2 percent from the 1997 level of HK$1.37 trillion.

Unemployment surged to a record high of 8.3 percent in the second quarter of that year with nearly one in every five workers aged below 24 out of work.

The median monthly household income was HK$15,500, or 18.4 percent lower than the 1997 figure of HK$19,000.

The number of bankruptcy cases spiked to 22,000 and over 106,000 properties slipped into negative equity as of the end of June 2003.

One proof of widespread despair in the city was that 1,238 Hongkongers killed themselves that year, 59 percent higher than the 777 suicide cases in 1997.

My own experience that year was all about bitterness, too.

Although lacking in experience, I was lucky enough to have kept my job. But lots of people lost theirs. A fresh graduate from a prestigious local university with glowing honors was having a tough time in the desolate job market.

As the economy was at its trough, jobs were sparse and pay very little. In order to make a living, that poor guy even applied for a clerical post with a monthly wage of HK$6,000. Still he didn’t find a proper full-time job until after one year of part-timing as a broadband service promoter and a supermarket worker.

Now I have two things to share with today’s youngsters:

1. Every generation has to face its own difficulties and hardships – in 2003 it meant no job or low pay and one had to struggle for food and shelter. Today, almost everyone has a job and making a living is not that difficult, although home prices are so exorbitant that few can own a roof over their head. But which year is more miserable, 2003 or 2015? I think the answer is obvious.

2. The economy and asset prices move up and down periodically. Just like the 12-year cycle from 2003 to 2015, both are the years of goat on the Chinese zodiac calendar, during which Hong Kong’s economy and realty market have shot from hell to heaven.

Even in their wildest imagination, those “negative equity” home owners could never know that within just a few years the prices of their properties would rebound to jaw-dropping levels. The average price of a unit at Taikoo Shing, for instance, stood at HK$3,000 per square foot in 2003 but now a home there goes for at least HK$14,000 psf, a fourfold increase in 12 years. Those bankrupt mortgagors would surely strike gold if they were able to weather the few bleak years.

I’m not saying that Hong Kong’s home market will tumble back to the 2003 level. No one would like to see that happen again, and the situation back then was the result of government incompetence coupled with a deadly epidemic. But the truth is that everything has its ups and downs.

Home prices are determined by countless factors, but they can’t sustain at levels far beyond the reach of the middle-income group.

If you can’t afford a home today, it doesn’t mean you can’t afford it tomorrow. What you need to do, as I believe, is stay patient and sharpen your competitive edge.

One day, sooner or later, you will be able to put a roof over your head.

This article first appeared in the Hong Kong Economic Journal on July 2.

Translation by Frank Chen

[Chinese version 中文版]

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Which year is more miserable, 2003 or 2015?

Hong Kong Economic Journal columnist