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Peter Wong

Why Nannies Make Hong Kong the Greatest among Nylonkong?

 

Peter Wong

Former Chairman of The Lion Rock Institute
Founder of Hong Kong School of Austrian Economics
26th December 2021

  U.S. stock markets are making record highs and commodity prices rebound substantially despite the Omicron threat.  With WTI hovering above $70, the trend of commodity prices continued to show strength. The supply chain, already strained by the pandemic for the past 18 months, will further be disrupted by the Omicron induced new lockdowns. The Federal Reserves finally admitted in their last FOMC meeting that inflation is not transitory. With the headline inflation exceeding 6%, cash is definitely NOT king. People who hoard cash and are too timid to invest will be punished harshly by rampant inflation.

  Isn’t the economy wrecked by the pandemic? Aren’t people losing their jobs? Why do stocks or real estate prices continue to rise? There are certainly some sectors in the economy, tourism and dining for instance, are in depression, whereas investment banks, fintech and information technology are booming at the expense of the old economy, which is being wiped out by government lockdowns. Fortunately enough, Hong Kong has the potential to reap the benefit of this transition because as the leading international financial center in Asia-Pacific, our capital market should be able to attract a lot of talents, investors and entrepreneurs from all over the world. What is crucial is whether our institutions continue to exhibit comparative advantage over our competitors like London, New York, Shanghai, Singapore and Tokyo in the post-pandemic world.  

  To maintain Hong Kong’s comparative advantage, our rule of law is key as it is the cornerstone of every international financial center. But apart from the rule of law, the quality of life and ease of living should never be underestimated if we want to attract talents. From my experience of living in the Western World, there is one institution that makes Hong Kong outpace other international financial centers but is easily overlooked: that is our well-functioning foreign domestic helper system!

  Imagine a mid-grade investment banker, after spending a whole night teleconferencing with his clients in Silicon Valley, dragging his exhausted body back home, he still needs to mop the floor and wash the dishes. What is it like? I'm not saying that there are no people in the world who enjoy cleaning their homes. But if it  can be chosen, most people always want to focus on their own strengths and leave the housekeeping work for someone else.

  Our government often says that undersupply of international schooling will affect Hong Kong's competitiveness. I wonder if our government realizes that if there are not enough foreign domestic helpers to help our expats taking care of their families, would it be even more damaging to our competitiveness? However, because of the dogma of protecting local workers and also recently the martial law-like COVID quarantine requirements, Hong Kong’s domestic helper system is in jeopardy because the prices are becoming prohibitively high. Will our government care to protect this system that makes Hong Kong a unique place among Nylonkong?

  Land supply is also often cited as the paramount issue for Hong Kong’s competitiveness. Hong Kong does not lack land, but the development of new residential land has been paralyzed by bureaucracy for many years. There have been suggestions to change the land use of the Kwai Chung Container Terminal for residential buildings. Since it is an open secret that Hong Kong’s container terminals will eventually merge with other container terminals in the Greater Bay Area, why don’t we redevelop our terminals for residential use as quickly as we can? What is holding us up? I have a number of expat friends leaving Hong Kong for Singapore simply because our housing is prohibitively expensive even for expat investment bankers. If Hong Kong continues to be held back by bureaucracy, the last person who laughs will most likely be Singapore.

 
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