City Beat | Should capitalist Hong Kong worry about Beijing’s common prosperity drive? Deng Xiaoping had the answer ready decades ago
- State media has denied any Chinese version of a Robin Hood-style approach to wealth inequality
- But message to Hong Kong is loud and clear: it cannot rely on real estate to be its engine for future development
What is really behind the recent stock market volatility in Hong Kong, especially the plunge in property share prices?
It could be a perfect storm, coming at a time when Beijing has reportedly had enough of the city’s housing shortage and a clampdown may be looming to force local developers to speed up home building, while the market is shaken by the unprecedented debt crisis of Hong Kong-listed Evergrande, China’s – perhaps the world’s – most indebted property giant.
Some have linked this to President Xi Jinping’s “common prosperity” drive to narrow China’s wealth gap and warned of more profound implications.
Market sentiment is one thing, but oversimplifying the complexity of Hong Kong’s deeply rooted wealth inequality, well reflected by skyrocketing property prices, is quite another.
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Hong Kong wealth gap worst in five decades
While major local developers have publicly dismissed reports that Beijing has ordered them to get their act together, the fuller picture suggests the central government may just have one loud and clear message: Hong Kong can no longer afford to rely on real estate to be its engine for future development.
