Harbour View: Free the people – or disappear

people on pedestrian lane
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Impossible to imagine today, diminishing the right of free movement of people could see Hong Kong’s population decline and our city collapse.

Note: a variation of this op/ed appeared in Next Magazine’s May 27th 2015 edition.

Hong Kong has a rich tradition of importing the essentials for survival to this barren rock. Water, food, construction materials and power have ‎been fertilised by our imagination to grow a great world city. There was a time when importing people, through an open door, ‘touch base’ policy, allowed the people under the Lion Rock to flower, flourish and grow. If we don’t learn how to better import people now, our garden will wither and die.

The antidote to low birthrate is, of course, immigration.

Visits to Japan and Singapore show the choices before us in stark relief. Conversations with intelligentsia in Japan are about the one in seven houses standing empty with no hope of future occupancy. Inherited homes are not a windfall, but rather a curse as elderly inheritors struggle with demolition and disposal costs.  There is simply no one to buy them as the populations shrinks.

Reports are of peak price 140 million yen houses in posh Yokohama districts ‎now unsellable at 30 million yen. The government is considering charging a residential tax at six times normal rates to vacant properties to force owners to deal with them.  Municipalities compete to ‘steal’ people from each other, ‎in a zero-sum game for the nation, with cash handouts for families.

Import people!
The antidote to low birthrate is, of course, immigration. But in a country where accusing a politician of having hidden Korean or Chinese ancestry‎, and thereby divided loyalties, is a very effective smear, no one is talking about the mass immigration it would take to reverse this terminal decline.

Indeed, in a presentation at Setsunan University near Osaka about Hong Kong, one line of audience questioning was about Singapore and ‘wasn’t it ‘crowded’ with all those new arrivals.’

Indeed, switched on Japanese must be looking curiously at a place that has, by all accounts, done well by mass immigration with a rising GDP and rising GDP per person.

The Merlion City has gone whole hog for mass immigration with explicit targets to attract young, educated foreigners‎ to the Merlion City. It’s been made possible by a government with no opposition and an educated and efficient bureaucracy to assess needs and recruit people. Even there, though, the mass immigration  has produced enough public resistance to force a slowdown of government plans, a rare change of direction in policy in Singapore.

Cake. Eat it.

In a perfect world, free movement of people would allow everyone to go where their dreams could be realised.

Hong Kong seems to have a foot in both camps. It is relatively easy to get a visa if you have a job offer and university degree. Obtaining permanent residence is fairly‎ painless process after seven years of continuous residence if  you are not a domestic helper. However, an aging population means we still face a decline in our working population in just a couple of years. This means a decline in our ability to fund healthcare for increasingly long lived seniors with chronic health problems, and to fund education for a future workforce that must be even more productive than in the past.

The free movement of people, to Hong Kong, is therefore vital for our survival. Lack of education spots, housing shortages and rental costs make broader immigration problematic. ‎The numbers needed to reverse a drop in our working population cannot be filled by billionaires alone. Middle class immigrants need places to live and educate their children too.  With the ESF’s recent announcement that fees may go up by as much as 30%, the last hope of middle class anglophones in Hong Kong is fading.

Politically, immigration is sensitive, especially when too many people come from one place. Large groups are visible and scare those who feel unable to keep up by holding onto a job at their current salary, fearful of  being undercut by hungry new arrivals. Some fear for their welfare payments if unproductive arrivals can’t survive unaided.

From all corners of the earth

Places like Singapore and Canada seem to have gotten it right by attracting (or allowing) a mix of many people from different parts of the world. Governments have sold their citizens hard on the idea that immigration is a good thing that enriches everyone. Economists largely believe that is broadly correct, as recently reported in a study cited in The Economist about the UK. Singapore and Canada certainly don’t seem to be hurting for it.

In a perfect world, free movement of people would allow everyone to go where their dreams – and best economic potential – could be realised. It is right and just.

In reality, people’s fears must be addressed but hopefully not indulged with crass populism. Addressing concerns effectively can allow for the maximum of freedom possible. That means smart choices and honest communication in government actions.

Our workforce shortage may become a people shortage and real estate glut.

Hong Kong shares the fears that most nations, rich or poor, have about too many immigrants. Add to the fears about mainland dominance from our most natural source of immigrants, China, and we have a political challenge on our hands in doing what is right and smart.

While the city may be in the throes of a perceived real estate shortage today, a visit to Japan – the only place with an older population than Hong Kong – warns us that a reluctance to open our doors may see a reversal of our prosperity. Our workforce shortage may become a people shortage and real estate glut. This is what keeps John Tsang up at night.

If we do not get smart about ‎more people the freedom  to move to Hong Kong, we may find ourselves in a position of declining affluence right when we need it the most.