Micro flats and crackdown on Uber in Hong Kong show monopolies win, while consumers suffer

The venality of Hong Kong’s government-protected cartels recently reached a crescendo as government officials like Secretary for Transport and Housing Frank Chan Fan staunchly defended property developers and taxi licence owners from much needed reform. 

Hong Kong has become the land that economic time forgot, where the outdated practices of monopoly-entrenched dinosaurs are defended by government officials. Dogmatic beliefs in a free market that are actually failed-and-rigged markets continue to tell the world that Hong Kong is an intellectually backward village, dominated by post-colonials with cosy back-room deals who cannot keep up with China’s economic and technological change. 

Chan recently mounted a depressing defence of the city’s property developers, refusing to intervene in the private flat market where prices have not only continued to rise, but unregulated sizes continue to shrink to past the point of a parking space. According to a Post report, 691 micro flats – of 200 square feet or less – were offered in 2017, representing over eight times more than the 79 in 2015. Smaller flats between 215 and 430 sq ft jumped to 6,200 in 2017 from 2,056 in 2015. 

Instead of acknowledging a trend that threatens the health, social and economic welfare of Hongkongers, Chan outright dismissed calls to regulate private developers’ supply of micro flats. He said flat buyers might not be able to afford larger homes if a minimum size was enforced. But, he fails to understand, or perhaps understands too well, that restricting flat sizes would lead to a fall in prices as developers would need to lower selling prices.

Failing to regulate property as a strategic public asset and allowing it to be freely used as raw material for speculation has made property developers into economic oligarchs staking out their own special economic zone in Hong Kong. The inability to muster up the courage to invoke policies such as expropriating developers’ land banks and restricting flat sales to Hong Kong residents only prolongs the litany of falsehood, fantasy and folly that rots our economy and standard of living. 

Not to be outdone in his transport portfolio, Chan privately admonished Uber, according to another Post report, for its “ugly American” business practices and failing to obey the government’s outdated taxi licensing regulations. Stubbornly oblivious to the meaning of technological disintermediation wrought by ride-hailing, the government protects existing taxi licence holders as if they were an endangered species of prehistoric creatures – at the great expense of consumers.