House Buying As Hope Mechanism: the Culture of Homeownership in Hong Kong (1970S – 2010S)

HOUSE BUYING AS HOPE MECHANISM: THE CULTURE OF HOMEOWNERSHIP IN HONG KONG (1970S – 2010S)

Chung-kin Tsang

A dissertation submitted to the faculty at the University of North Carolina at Chapel Hill in partial fulfillment of the requirements for the degree of Doctor of the Philosophy in the Department of Communication.

Chapel Hill 2018

Approved by:

Lawrence Grossberg

Sarah Dempsey

Po-keung Hui

Christian O. Lundberg

Michael Palm

ABSTRACT

Chung-kin Tsang: House Buying as Hope Mechanism: the Culture of Homeownership in Hong Kong (1970s – 2010s) (Under the direction of Lawrence Grossberg)

Hong Kong, a global financial hub, is well-known for being the world's “freest” economy,

and the least affordable city for housing. The rapid and stable financialization process through which Hong Kong was transformed from a light industrial city in the 1970s to a financial hub with real estate as the engine of growth since the 1980s was not only a top-down imposition; it also relied on securing the consent across the population, albeit temporarily and contingently, in a unique context. By piecing academic and non-academic literatures together, this research proposes that homeownership and financialization were articulated jointly by the British

colonial state and the local population from the 1970s to the 1990s into a cultural mechanism

of hope – House Buying.

This hope mechanism requires: 1. a self-reliant subject acting through the market, 2. a

narrative of life-goals that characterize a middle-class way of living; 3. a temporal mapping of

the future based on the social route of a “housing ladder” from public rental, subsidized

homeownership to private homeownership, and a social plane with a relatively open

opportunity structure. The formation of House Buying was part of, and reinforced the

depoliticization of the local population from the 1970s to the 1990s through producing “hope

in the tunnel”.

iii

After the 1997 handover, Hong Kong became the Special Administrative Region

(HKSAR) under the rule of China. The context changed dramatically, and the hope mechanism was seriously challenged. People's individual effort was unable to keep up with the booming property market when the housing ladder collapsed, and the objective opportunity structure was narrowing. Through conducting focus group interviews among 73 relatively better educated young adults, this research finds that the hope mechanism of House Buying is still dominant yet with a different formula. These young adults remain self-reliant in the individual level, and attach a sense of safety net to homeownership as both a shelter and a financial tool to secure their own future. They gain hope through “waiting for the coming crisis” (like SARS or terrorist attack) as the connection to the future. The supposedly devastating crisis is now domesticated as an excellent homeownership and real estate investment opportunity for being a “normal” part of the market economic cycle.

ACKNOWLEDGEMENTS

The completion of a dissertation always requires a massive amount of material,

emotional and intellectual supports, and the purpose of Acknowledgements is to reveal these

otherwise hidden conditions.

I am very lucky to be supported by many teachers, friends, and family members. My

supervisor, Lawrence Grossberg, has had a no-nonsense commenting style that can always

make me stressful, and hence push me further forwards. And I will always remember the fried

chicken in Mama Dips, and the Chinese buffet in 35 Cafe. Meaghan Morris has faith in my

abilities, encouraged me to pursue the academic career, and treated me an expensive French

meal in Wanchai. Donna Chu has been my interlocutor on intellectual and emotional issues

throughout this long journey from the first day, and has forced me to join parties that rescue me from isolation and loneliness. And if my memory is reliable, I drank almost a whole bottle of expensive Japanese whisky in one of these parties. I regularly met with Ng Chun-hung and

Charles Cheung in the Japanese restaurant Oishi around HKU. Ng always advised me with caring and inspirational aphorisms like shedding light in the darkness, and Cheung has never hesitated to give me a helping hand whenever I was in need.

The chance of participating in the focus group interviews with Francis Lee, Leung Kai- chi, Gary Tang, Chan Chi-kit, and Vivien Zhang is key to the completion of this research. I can never thank enough for Tang’s invitation, and Lee’s prompt reply and thoughtful comments to my preliminary ideas and drafts. Eva Li, Joseph Li, Dennis Leung, Shannon Wong Lerner, and

Grover Wehman-Brown are my academic comrades. I constantly bombarded Eva Li with rough drafts that should never be read by anyone, and she still replied with encouragements and

suggestions. I discussed with Joseph Li and Dennis Leung numerous times about the

framework, and they continued to sort out the findings together with me. Shannon Wong Lerner

and I have always been supporting each other in our long journey of dissertation writing. And

Grover Wehman-Brown helped me copyedit this dissertation and unconfused the confusing

sentences and paragraphs.

Many friends in Chapel Hill and Hong Kong have helped and stayed with me. Alex

Chan, Jackie Tang and Kaman Lau hung around with me in Chapel Hill, and spent time together

in Mint & Basil, Buns, University Mall and South Point. My classmates, Adam Rottinghaus

and Justin Flores, housed me when I traveled between Hong Kong and Chapel Hill. Wayne

Erik Rysavy, HyunJoo Mo, Tu Lan, and Jing Jiang drove me to do grocery shopping in Harris

Teeter, and thus sustained my life in critical moments. In Hong Kong, Daisy Chu, Moffy Lee,

Kelvin Yau and Kathy Yu are my interlocutors on social and cultural issues, and Alex Leung is my long-term gym comrade. Kitty Ho, Sampson Wong and the Alcohol Salon they host also gave me a sense of self-worth amid my darkest hour in dissertation writing. Karen Chan, Kim

Lee and Benny To generously offered me teaching opportunities that secured my living expenses and tuition fee.

My parents trust me unconditionally and have kept their worries about my progress and concerns of family expenses only to themselves. I am blessed that we can make ends meet during the years of my study. Kim Cheung chooses to stand by me when I was most uncertain about the future. The dissertation can be finished because of her support.

TABLE OF CONTENTS

ABSTRACT ...... iii

ACKNOWLEDGEMENTS ...... v

LIST OF FIGURES ...... ix

CHAPTER 1 – INTRODUCTION ...... 1

1.1 Making a Dialogue in the Financialization of Housing and Hope ...... 8

1.2 Engaging in Local Discussion ...... 12

CHAPTER 2 – FINANCIALIZATION AND HOPE: THE CASE OF HONG KONG.. 20

2.1 Approaches to Financialization and Housing ...... 20

2.2 Cultural Mechanism of Hope – the Case of Hong Kong ...... 30

2.3 Thinking through Hope – the Social Subject, the Good Life, and Temporal

Mapping of the Future ...... 32

2.4 House Buying as Hope Mechanism under the Discourse of the Market ...... 37

2.5 Gloominess in Hong Kong among Young Adults ...... 47

CHAPTER 3 – HISTORICAL FORMATION AND POLITICAL EFFECT OF HOUSE BUYING IN HONG KONG (1970S – 1990S)...... 56

3.1 The Watershed of Hong Kong – 1966 and 1967 Riots ...... 59

3.2 Three Steps of “Housing Ladder” in Hong Kong ...... 64

3.3 Self-reliance in the Official Discourse ...... 71

3.4 From Shelter to Home – the Middle-class Good Life ...... 77

vii

3.5 Financialization of Homeownership – Homeownership as a Good Investment

Decision ...... 82

3.6 Belief in Open Opportunities, Generally-felt Optimism and Hope in the Tunnel

with Undercurrents of Social Inequality ...... 90

CHAPTER 4 – COLLAPSE OF HOUSING LADDER AND NARROWING OF OPPORTUNITY STRUCTURE IN THE STRUGGLED PERIOD ...... 97

4.1 Social Policy: Failed Response from the State ...... 99

4.2 Political: Corporatist State ...... 105

4.3 Economic: Deindustrialization and Financialization ...... 109

4.4 Social: Increasing Social Polarization and Narrowing of Opportunity Structure 115

4.5 Cultural: Emergence of Post-materialist Values and Discourses ...... 120

CHAPTER 5 – HOPE THROUGH WAITING FOR THE COMING CRISIS ...... 128

5.1 Gloominess of Young Adults with Social Awareness ...... 133

5.2 Identifying the Social Factors in Stagnation ...... 137

5.3 Imagination of a Stagnant Social Plane ...... 139

5.4 Self-government in Waiting – “Heroism of the Stuck” (the Case of Australia) .. 147

5.5 The “Coming Crisis”...... 150

5.6 Self-reliance – Buying a House as a Shackle and/or a Safety Net ...... 157

5.7 Undercurrents besides House Buying ...... 164

CHAPTER 6 – DISCUSSION...... 168

6.1 Passive and Active Hope ...... 169

6.2 Hope as the Resource of Survival ...... 172

REFERENCES ...... 177

viii

LIST OF FIGURES

Figure 1.1 Hope Mechanism of House Buying (The Formative Period: 1970s - 1990s) ...... 3

Figure 1.2 Hope Mechanism of House Buying (The Struggle Period: 2010s) ...... 5

Figure 2.1 Price Indices for Selected Popular Developments (1992 - 2017) ...... 53

Figure 2.2 Median Monthly Employment Earnings of Employed Persons (2001 – 2016) ..... 53

Figure 2.3 Domestic Households by type of Housing (2015)...... 54

Figure 3.1 Historical Timeline of Hong Kong before 1967 ...... 59

Figure 3.2 Historical Timeline of Hong Kong from the 1970s to the 1990s ...... 61

Figure 3.3 Private Domestic (1980 – 2003) Price Indices for Selected Popular Developments.

...... 67

Figure 3.4 Percentage of Households Living in Self-owned Premises (1986 – 2001)...... 79

Figure 3.5 Median monthly household income indices for a family of four (1981 - 2001). ... 84

Figure 3.6 Share of total household expenditure on housing (1981 - 2005)...... 84

Figure 3.7 Gini Coefficient Indicator (1971 – 2001)...... 95

Figure 4.1 Historical Timeline of Hong Kong from 1997 to the 2010s ...... 98

Figure 4.2 Year-on-year % change in Gross Domestic Product (GDP) (1997 - 2016)...... 111

Figure 4.3 Unemployment Rate (%) (1997 – 2017)...... 112

Figure 4.4 Gini Coefficient Indicator (1971 – 2016)...... 115

Figure 4.5 Number of Persons Engaged by Industry Section (1981 – 1996)...... 116

Figure 4.6 Number of Persons Engaged by Industry Section (2000 – 2017)...... 117

Figure 5.1 Background of Focus Group Interviewees in 2014 and 2016 ...... 132

Figure 5.2 Best Lending Rate (1980 – 2017)...... 163

Chapter 1 – Introduction

Hong Kong is a peculiar case in the financialization of housing. Housing in Hong

Kong has at least three bizarre characteristics. First, Hong Kong’s private housing prices have

been exceptionally high. It has been the least affordable private housing market in the world

since 2010 for eight consecutive years, far surpassing other developed cities, in a one of a

kind way. Hong Kong’s housing unaffordability ratio was 19.4 in 2017, while the ratios of

the cities at the second and the third places were “only” around 12 – 13.1 Meanwhile, Hong

Kong was the second-most unequal city in the world behind New York in terms of income in

2016.2 Second, despite the skyrocketing housing price, homeownership has been the most

desirable life goal local population have said they desire to achieve according to many

surveys and studies throughout the late 2000s and the 2010s.3 Third, Hong Kong has been

one of the major global financial hubs since the 1980s; it is fueled by a finance-led growth

regime that is real-estate-centric. This model is different from the Anglo-Saxon model of

financialization based on capital gains, dividends, interest, and pension income from

sufficient stocks of property.4 The Hong Kong government, since its early colonial era, which

1 The unaffordability ratio is calculated by dividing the median house price with median pre-tax household income. The survey suggests that a region with more than 5.1 is “severely unaffordable”. The ratio of Hong Kong in 2017 was 19.4, far surpassed the runner-up and second runner-up cities, Sydney (12.9) and Vancouver (12.6). Demographia (2018). “14th Annual Demographia International Housing Affordability Survey”. 2 Census and Statistics Department, HKSAR. (2017). “Thematic Report on Household Income Distribution in Hong Kong”. P. 9. 3 HKUPOP (2009) “Back to Basics: a survey on Risk, Protection and Long-term financial planning”, Bauhinia Foundation Research Centre (2010) “Research on the Diversity of Youth Aspiration”, HKUPOP (2013) “Opinion Survey on Wealth Management and Life Planning of Hong Kong Post 80 & 90 Generations”, HKUPOP (2014) “Survey on Public Attitude towards Financial Management 2014”, & HKUPOP (2015) “Survey on Public Attitude towards Financial Management 2015”. 4 Haila, A. (2000). “Real Estate in Global Cities: Singapore and Hong Kong as Property States”; Smart, A. & Lee, J. (2003a). “Housing and regulation theory – Domestic demand and global financialization”; Smart, 1

began in 1842 and after the handover of sovereignty from the British to the Chinese in 1997, has carefully managed the land supply. Government revenue has relied heavily on land- related income.5 Five major real estate conglomerates dominate the private housing market

and have extended their reach to other businesses that service the operation of daily life, like

supermarkets, telecommunications, energy and transportation.6

This research project answers the following questions: Why does and how has

homeownership occupied the position of the most desirable life goal in Hong Kong society –

the least affordable private housing market in the world? What are the political effects of the

desire towards homeownership on the population? How do these effects mitigate and/or channel the social discontent that derives from having one of the greatest gaps between rich and poor in the world?

My research proposes that a perspective of hope is key to answer the above questions.

Understanding homeownership as a hope mechanism, a phenomenon I name House Buying,7 contributes a cultural and temporal understanding of how the financialization of housing in

Hong Kong is able to operate amid severe social inequality. Hope, in this research, is understood as an accumulation of expectations based on personal efforts, care, attention, knowledge, and experience, which is articulated by and mediated through discourses. I use the term mechanism to describe the combinations of objective social structures and

A. & Lee, J. (2003b). “Financialization and the Role of Real Estate in Hong Kong ’ s Regime of Accumulation”. 5 For instance, 31.9% of the government revenue in 2014 – 2015 came from land-related income. Research Office, Legislative Council Secretariat. (7th December 2015). “Fact Sheet: Major sources of government revenue”. 6 Poon, A. (2011). Land and the Ruling Class in Hong Kong. 7 I use “House Buying” in capital letter when I delineate it as a hope mechanism.

discourses that articulate the socially defined, yet personally internalized, subject positions,

trajectories, benchmarks, and life goals.

Society has always been distributing hope through different mechanisms, and House

Buying is one of the dominant mechanisms in the history of Hong Kong since the 1970s.

“House Buying” is deliberately used to name this hope mechanism to emphasize the inseparable connection between homeownership and real estate investment in the context of

Hong Kong. While the English language separates “home” and “real estate” into the social and economic realms respectively, in Hong Kong’s Cantonese language, people use maai

(buying) lau (house) to signify the act of acquiring homeownership.8

Figure 1.1 Hope Mechanism of House Buying (The Formative Period: 1970s - 1990s)

House Buying as a hope mechanism connects subject formation, life goals, and

temporal mapping of the future. This research traced the historical development of House

Buying, and argues that House Buying was established in Hong Kong during the period of

the 1970s to the 1990s, and that the discourse among the young adults of Hong Kong has

8 This usage will further be discussed in Chapter 2 Section 2.4.

changed in the 2010s. In the 1970s to the 1990s period, which I call the Formative Period of

House Buying (as shown in Figure 1.1), the self-reliant subject emerged through articulations as evidenced in both the official discourse of the colonial state and the experience of the local population. In this period, homeownership became the symbol of the middle-class good life and good investment decisions, and were connected through a temporal mapping of the future. This temporal mapping combined two elements – a housing path constructed by the colonial state as a hierarchical housing ladder with three steps (public rental housing, subsidized homeownership and private homeownership), and an imagination of the social plane as a structure with open opportunity. This mechanism produced individualization, self- governing, and hope effects – Hong Kong people believed that their waiting in the housing ladder would be temporary, and would eventually pay off in the future. One would enjoy the middle-class good life if one was self-reliant, worked hard and invested wisely.

The 1997 Asian Financial Crisis and the subsequent economic recession until 2003 changed the temporal mapping that was central to the above hope mechanism. First, the housing ladder collapsed following the HKSAR government’s retreat from active participation in the housing market, ending the subsidized homeownership program in 2003.9

Second, the objective opportunity structure among the local population, especially the new comers to the job market, was narrowing even though the economy had steadily recovered since 2004. On one hand, the deindustrialization and the expansion of the tertiary sectors began in the 1990s and became more drastic in the 2000s. Young adults who had lower educational qualifications often end up in the entry level jobs in the retail sectors, and suffer

9 The government officially stated that, it “should withdraw from its role as property developer”. “…Home ownership should be a matter for the market with which Government should refrain from competing.” Legislative Council, HKSAR. (2003). “A Statement on Housing Policy by Hon. Michael M Y SUEN, GBS, JP Secretary for Housing, Planning and Lands”. P. 3 & P. 15. The Home Ownership Scheme was gradually restored since 2011, and the first batch have been inaugurated in 2017.

from job insecurity and temporary contract work.10 On the other hand, polarization has also happened among the middle-class. Local professionals, like teachers and doctors, do not benefit from the opportunities created from the rapid economic development of China starting from 2003.11 These opportunities fall mostly to the high-end, transnational workers in the sectors of trade, commerce and finance.

Figure 1.2 Hope Mechanism of House Buying (The Struggle Period: 2010s)

Following the above structural changes, this research discusses the modification in

House Buying as hope mechanism in the 2010s, which I call the Struggled Period. (See

Figure 1.2) Scholars have proposed that in the aftermath of the increasing social polarization and widening gap between the rich and poor on one hand, and a series of social movement since 200312 on the other, Hong Kong has showed signs of the emergence of a stronger civil

10 Lee, K. M. and Law, K. Y. (2014). “Economic Insecurity and Social Protection for Labour: The Limitations of Hong Kong’s Adhocism during the Financial Crises”. 11 Lui, T. L. (2008). “Fear of Falling”. 12 These movements include the “Hong Kong 1 July Marches” in 2003 and 2004 with approximately 500,000 protestors in each, “New Preservation Movement” from 2003 to 2008 which is a series of social movements aim at preserving the local landmarks and communities, and the Umbrella Movement in 2014 – the largest sit-in protest in the history of Hong Kong that lasted for three months.

society,13 progressive localism,14 and post-materialism.15 The younger generation has

especially had much stronger social awareness about social inequality and injustice than the

older generations.16 Against this backdrop, this research interviewed a total of 73 young

adults (20s to 30s years old who are relatively better educated) in 12 focus groups during the

summers of 2014 and 2016. As shown in these discussions, having stronger social awareness

cannot be taken as rejecting the status quo of commodification and financialization of

homeownership. House Buying as hope mechanism persisted with a modified formula under

the discourse of “waiting for the coming crisis”.

The young adults in these focus groups all shared indications that they had a gloomy

imagination about the Hong Kong society as a stagnant social plane – “a pool of stagnant

water”.17 “Stagnation” signifies a condition which a person is not suffering from immediate

problems, like homelessness or unemployment, but is concerned about the sluggish, if not

worsening, future direction of the society. Unlike the relatively depoliticized older generations, these young adults in general could effectively articulate their personal frustrations beyond an existential account. They could connect their discontent with problems in the social system, like the collapse of the housing ladder and the collaboration between the state and the real estate conglomerates, yet they also shared a strong sense of political impotence.

13 Ma, N. (2007). Political Development in Hong Kong: State, Political Society, and Civil Society. 14 Chen, Y. C. and Szeto, M. M. (2015). “The Forgotten Road of Progressive Localism: New Preservation Movement in Hong Kong”. 15 Lee, F. L. F. and Tang, K. Y. (2013). “Economic Development, Political Change, and the Post-material Turn of Hong Kong Young People”. (in Chinese). 16 Ibid. 17 “A pool of stagnant water” was a phrase used by one of the interviewees to describe the social plane they were situated in. This phrase crystalizes their social imagination, and its meaning will further be elaborated in Chapter 5. 6

As I show in my analysis of their discussions about the issue of homeownership, most of the social discontent was not connected to a reflection on the capitalist system in Hong

Kong, but was channeled into a response to these conditions by being self-reliant through the market. Pursuing homeownership in the private market was desirable and seen as a symbol of a safety net. Yet, without the housing ladder, waiting for the “coming crisis” became the way they hoped to achieve this goal. Especially within the middle-class and the higher-educated groups, the young adults were waiting and preparing themselves for the next crisis, like

SARS,18 a terrorist attack, or the next financial crisis. The supposedly devastating crisis,

which most people want to avoid, now has become domesticated and welcomed by these

young adults to be an excellent investment opportunity. These young adults justify this hope

through waiting for a crisis by referring to the economic opportunities present within a

historical narrative of the housing market in Hong Kong. To these participants, this economic

narrative “revealed” that crisis is part of the “normal” economic cycle. It will certainly come,

and will eventually go. Homeownership, more than being an ordinary good investment

object, is too “risk-free” to even be called an “investment” in this historical narrative. The fall

of its price is only temporary, and will be restored in the future. Hence, one should grab the

opportunity in the coming crisis to achieve homeownership, which has become the taken-for-

granted ultimate destination of one’s savings. People gain hope, no matter how slim and

distant this hope is, by waiting for the coming crisis, and continue their day-to-day work and

plan for the future.

Through the discourse of “waiting for the coming crisis”, House Buying as a hope

mechanism is modified, and still produces the political effects of individualization and self- governing amid increasing social inequality. In this discourse, the social system is

18 Severe Acute Respiratory Syndrome (SARS) epidemic in Hong Kong broke out during the Spring of 2003. Hong Kong was an infected area where 1,755 cases and 299 deaths were reported.

problematic and cannot be changed easily but at least the problems in people’s personal life can be solved through using homeownership as the safety net. The image of the home as a safety net is contradictory because homeownership cannot enable people to live within a shelter and to sell the property as an investment object simultaneously. But, the young adults take for granted its wealth accumulation effect in a booming housing market, and reconcile this contradiction through possible financial methods like scaling down to a cheaper apartment, re-mortgage and reverse mortgage.19

1.1 Making a Dialogue in the Financialization of Housing and Hope

This research intervenes into two academic dialogues – the financialization of housing, and local housing studies in Hong Kong. The first body of literatures will be further reviewed in Chapter 2. Here I only briefly highlight the studies this research has learned from and developed into the concept of hope mechanism.

After the financial crisis in 2008, financialization became a popular topic of scholarly inquiry. The micro approach to financialization in the realm of real estate and housing concerned the importance of the mortgage and its influence on people’s everyday life, as well as the social need of sheltering and home-making. Hope is a shared, yet theoretically underdeveloped common theme throughout these analyses. Garcıa-Lamarca and Kaika20

conduct a historical review to study the trajectory of financialization in Spain as a biopolitical

process since 1939. Mortgage contracts in this context promised the local population a future

19 Re-mortgage and reverse mortgage will be further discussed in Chapter 5 Section 5.6. “Re-mortgage” is to take advantage from the inflated housing price through taking loan from the bank, and “reverse mortgage” is usually treated as a pension funding. 20 Garcıa-Lamarca, M. & Kaika, M. (2016). “Mortgaged lives - the biopolitics of debt and housing financialization”.

with the optimization of income and wealth, yet connected their livelihoods with risk in the global capitalism and real-estate speculation.

Pellandini-Simanyi, Hammer, and Vargha21 discuss the calculative behavior over

future planning in choosing mortgage plans, and explored the interaction between financial

knowledge, and the local cultural and social context. They study the promotion of new

financial knowledge about mortgage loans in the Hungarian context, and find that the state-

subsidized mortgage borrowers were indeed more calculative than the market-based

mortgage borrowers. The former group made use of their existing cultural framework – the

knowledge and common-sense learned in the previous socialist state era – to spot and take

advantage from the loopholes of state policy.

Lastly, and most related to this research is Allon’s22 study of the subprime mortgage

borrowers in the US. Allon identify an affective dimension among these borrowers who

imagined the future, hopefully and anxiously, through using mortgage “as key to the freedom of a more secure future”.23 These borrowers shared “a feeling of being propelled into a better

future, of no time to lose, not even the time to read the fine print of mortgage documents”.24

Together these studies provide a historical review about how financialization interacts with

the webs of the local cultural and social contexts with an imagination towards the future.

My research proposes to understand hope as a mechanism to extend the shared element of hope in the above studies. I derive the concept of hope mechanism from Ghassan

21 Pellandini-Simanyi, L. Hammer, F. & Vargha Z. (2015). “The Financialization of Everyday life or the Domestication of Finance”. 22 Allon, F. (2015). “Everyday Leverage, or Leveraging the Everyday”. 23 Ibid. P. 700. 24 Ibid.

Hage’s discussion25 about hope. In his book, he focuses on the scarcity of hope as the context

behind the paranoid nationalists in Australia. He proposes that capitalism and the nation-state

have been distributing hope in a relatively egalitarian way. Having hope to move upward

socially is the secret to ease the discontent that arises alongside social inequality, and it is necessary to uphold the status quo.

The secret of capitalism is its capacity in hope distribution: This capacity to distribute hope (particularly the capitalist-specific dreams of upward social mobility) in the midst of massive social inequality has been the secret of the ability of the nation-state to provide such an enduring framework for capitalist accumulation.26

Recent developments in hope studies further enrich our understanding of hope as the

secret to maintaining social stability by grounding the study of hope in specific social and

cultural context. Zigon’s study27 of Moscow argues that hope has specific historical and

religious roots developed in the communist regime. Eggerman and Panter-Brick’s28 study of

the suffering in Afghanistan shows how the bedrock of their long-lived hope that is evident in

their cultural values are based on religious belief. Finally, Jansen’s29 recent research of the

Bosnian and Herzegovinian context connects hope with the belief in returning to “normal

lives”.

Methodologically, Jansen30 and Robbins31 both argue for the historicization of and

attention to how particularized items and goals are arranged in the study of hope. Jansen, in

his above research, emphasizes that historicization “allows us to foreground contingency by

25 Hage, G. (2003). Against Paranoid Nationalism: Searching for Hope in a Shrinking Society. 26 Ibid. P. 14. 27 Zigon, J. (2009). “Hope dies last - Two aspects of hope in contemporary Moscow”. 28 Eggerman, M. and Panter-Brick, C. (2010). “Suffering, hope, and entrapment: Resilience and cultural values in Afghanistan”. 29 Jansen, F. (2016). “For a Relational, Historical Ethnography of Hope: Indeterminacy and Determination in the Bosnian and Herzegovinian Meantime”. 30 Ibid. 31 Robbins, B. (2016). “Hope”.

investigating the conditions of existence and possibility of particular instances of hope as

relational phenomena in particular historical moments”.32 Likewise, Robbins also asks us to

look at history to identify the grounds of hoping in a given context.33 Instead of asking “what

can I hope?”, he proposes to ask, “looking at history”, what grounds do I have for hoping?

“Grounds” in this sense are the conditions of possibility that enable and limit one to look

forward to the happenings in the future.34 On the “grounds”, he particularly pays attention to

particularized items and goals. Each item or goal, which lies seemingly within our reach,

leads us forward one-step-at-a-time.

In a recent special issue on hope studies in the Journal of History and Anthropology,

Kleist and Jansen35 list a series of specific questions that the authors in the issue tried to answer, and have also inspired my research to trace hope as a mechanism. These questions highlighted key terms like “temporal reasonings”, “protracted crisis”, “futures in social configurations”, “projects of government”, and “social immobility”, and pointed to a project to study hope in the realm of the concrete and empirical, “how are they generated, distributed, negotiated, sustained and/or transformed—in other words, how do hopes themselves develop over time?”36

32 Jansen, F. (2016). P. 260. 33 He argues that the perspective of “a religiously-inflected, sacrifical ethics” has been dominated in the academic imagination of hope. Robbins, B. (2016). 34 “The sense of history to which I have been appealing would suggest that there might be grounds for hope in the case of global justice or cosmopolitanism because cosmopolitanism can mobilize self-interest on its side. The term ‘reform’ suggests only a range of particularized items or goals that lie within reach and that also–this is what Clarke says–lead beyond themselves. Hope, like cosmopolitanism, is not an all-or- nothing proposition.” Ibid. 35 Kleist, N. and Jansen, S. (2016). “Hope over Time – Crisis, Immobility and Future-Making”. 36 “Which forms of temporal reasonings can we identify amongst people in situations of protracted crisis? How do they engage with futures in social configurations where the future is a fraught notion, or perhaps: an even more fraught notion than usually? How are hopes incorporated into projects of government? What are the visions and repositories of hope and meaningful futures in situations of outspoken uncertainty and physical or social immobility?” Ibid. P. 388.

This research responds to their call by proposing House Buying as a hope mechanism.

I read the above literatures and questions as pointing towards a contextualized project to

tackle social immobility or stagnation as the shared imagination about our social plane in our

current time across the globe. This sense of stagnation further triggers people to adopt and be limited by specific ways and temporal frameworks to make sense of the past, present and future. In Moscow and Afghanistan, hope may derive from religious belief, but in Hong

Kong, hope has a tradition that rests in being self-reliant by utilizing the market,37 with

property being a good investment object. The strength of thinking of hope as a mechanism

can help us piece different elements together, and can make sense of its historical trajectory.

1.2 Engaging in Local Discussion

Proposing House Buying as a hope mechanism is also a response to a tendency of

taking culture as the mystical cause of the housing problem in the local literatures in the study

of homeownership. This tendency is often assumed in the works of the scholars and writers

who are more critical of the social and land system of Hong Kong. They aim at uncovering

the truth underlying the housing policy, yet were unable to make sense of people’s

“subordination” to the social system. The key exemplars are Alice Poon,38 and a series of

publication by a local think tank, Liber Research Community.39 The series follow the political-economy approach and aim at taking the enchantment out of the myth of “little land, many people” by uncovering the biased land policy of the government that limits the land supply and creates the image of “little land”.

37 This will further be discussed in Chapter 2 Section 2.4. 38 Poon, A. (2011). Land and the Ruling Class in Hong Kong. 39 Liber Research Community. (2013). Myth and Reality: Land Problem in Hong Kong; Liber Research Community (in Chinese). (2015). No Place for Home: New Perspectives for The Long Term Housing Strategy in Hong Kong (in Chinese); Liber Research Community. (2016). Brownfield Sites in Hong Kong 2015: tracing causes, distributions and possible policy framework. (in Chinese).

Alice Poon’s work “Land and the Ruling Class in Hong Kong” is the more influential one. It is one of the few scholarly works that became a bestseller in Hong Kong when it was translated into Chinese in 2010. It has helped the people of Hong Kong recognize the influential roles of real estate conglomerates, and hence its analytical framework is worth examining. Poon provides a detailed discussion of the political economy of land and housing in Hong Kong. Her argument is simple: although Hong Kong has been named as one of the freest economies in the world, “she has in reality been restrained from achieving free market goals, namely, those of promoting competition and consumers’ interests, of maintaining a level playing field in all business sectors and of nurturing fairness and equal opportunities for all.”40 Five major conglomerates that are controlled by a few families have a stranglehold on

“Hong Kong’s economic arteries”.41 They are the major land owners and their influence is not limited to property, and extends to many parts of people’s life, including utilities (gas and electricity), transportation (public bus service), and food retail (supermarket).42 The

government’s role, according to her discussion, is a “behind-the-scene director”.43 The combination of the land system and the lack of competition laws entrench economic and wealth concentration, while the lords derive their financial power from land and its overwhelming effect on the remainder of society.44

Her basic assumption is that land and housing in Hong Kong are a struggle between

two classes: “the humbler social class (ordinary people) and the lordly class (the large

conglomerates)”.45 It is a dependent relation, which she describes as similar to feudalism. But

40 Poon, A. (2011). P. 164. 41 Ibid. P. 44. 42 Ibid. 43 Ibid. P. 131. 44 Ibid. P. 51. 45 Ibid. P. 53.

there is at least one more class, or a sub-class in this analysis. It is the “locally born and educated middle class”.46 She suggests that one major difference between Hong Kong’s

situation and the feudal regime is that we have “an educated community who has democratic

aspirations and expects government to play the role of a referee”.47 But earlier in the chapter,

she is surprised that this class remains “strangely reticent about the growing social injustice

and the gaping divide that separates the rich from the poor”.48 She is perplexed about why

“people in Hong Kong are dangerously apathetic about such phenomenon”.49

This is shared by scholars and critics who are interested in the political economy in

housing policy. When I went to a conference about housing and rental control in Hong Kong

in the summer of 2014, I heard similar perplexity. The conference was organized by a local

university with three speakers: an economist who participated in government’s policy

making; a professor from the host department whose expertise is on social work and housing policy; and a researcher from a concerned group about land and housing issues. The discussion revolved around whether rental control should be reintroduced in Hong Kong, since its abolition in 2004. During the Q&A section, an old lady from the floor asked, “you all agreed that the present housing problem is very serious. So what can we do to change the situation?” While the economist left early, both the professor and the researcher responded similarly as follows, “unless Hong Kong people change the culture of treating housing as an investment, it’s difficult to turn around.” Peculiarly, this perspective of culture was not discussed in the conference, yet it was assumed to be the major cause of the housing problem in Hong Kong.

46 Ibid. P. 46. 47 Ibid. P. 55. 48 Ibid. P. 46. 49 Ibid.

To answer Poon’s perplexity and understand Hong Kong people’s “apathy” and economic culture, this research incorporates local research, local literatures, banking pamphlets, and focus group interviews, piecing them together like a jigsaw puzzle50 to map

the hope mechanism in the 1970s to the 1990s, and its modification in the 2010s. In the local

research, Lee,51 Chan,52 Koo,53 Cheng54 and Cheung and Ma55 are the pioneers. Lee and Koo

document the experience and life narratives of homeownership among middle-aged families

in the late 1990s. Chan outline the government’s “pro-ownership and anti-rental” policy

articulated with the residual Chinese cultural elements, like the concept of “family house”.

Cheng, and Cheung and Ma both study the advertisements of homeownership in Hong Kong.

Cheng discuss the ideological articulation behind the real estate advertisements, and Cheung

and Ma discuss the role of the government’s policy in producing space as a luxury good by

assigning the private housing estates with better location and sea view.

Yet the above researches have not developed a theoretical framework to discuss and

trace people’s attachment to homeownership. For instance, Cheng’s study shows us a subtle

reading of the meanings of the text, yet it also underexplores the contradiction between

people’s awareness of the false and manipulative ideological content in the advertisement,

and the reasons behind these people’s willing “subordination”. In her ideological framework,

Cheng proposes that real estate advertisements in Hong Kong served as “a false connection”

to the homebuyers “between their hopes in the cultural world (that of becoming high-class)

50 Grossberg, L. (2010a). Cultural Studies in the Future Tense. P. 53. 51 Lee, J. (1999), Housing, Home Ownership and Social Change in Hong Kong. 52 Chan, K. W. (2000). “Prosperity or Inequality: Deconstructing the Myth of Home Ownership in Hong Kong.” 53 Koo, A. C. H. (2001). Beyond the Hong Kong Dream - Housing Experience and Social Ethos in Hong Kong. Hong Kong: University of Hong Kong. 54 Cheng, H. H. L. (2001). “Consuming a Dream: Homes in Advertisements and Imagination in Contemporary Hong Kong.” 55 Cheung, S. C. H. and Ma, E. K. W. (2005). “Advertising Modernity - Home. Space and Privacy.”

and their inadequacies in the material world (their lack of space)”.56 Yet, Cheng also reckons

that these people indeed realized the advertisements were “unrealistic and manipulating”,57

but still they were all buying into the dream the advertisements promoted. Cheng at last is

unable to make sense of the reason behind the phenomenon – “their acknowledgement of

such manipulation does not seem to prevent them from being manipulated”.58

Cheng’s case shows that studying only the media text itself and its reception may not

be adequate. People are not passive recipient of the media content. Indeed, they are social

agents who are hoping, planning and calculating about homeownership and its cost and

benefit. The advantage of thinking about House Buying as a hope mechanism is that it gives

us a full picture that pieces people’s understanding of homeownership, life planning, and

social circumstances together; giving us a framework to track its change over time.

Pierre Bourdieu, at the very beginning of his book about the social structures of homeownership in the 1980s France, forcefully cited Bertrand Russell to declare his war on neoclassical economics, “While economics is about how people make choice, sociology is about how they don’t have any choice to make.”59 This research aims at tracing not only the

social structures, but also the dominant discursive structure through which the young adults

make sense of their choices and future.60 This research follows a cultural studies perspective

and “describes how people’s everyday lives are articulated by and with culture. It investigates how people are empowered and disempowered by the particular structures and forces that organize their everyday lives in contradictory ways, and how their (everyday) lives are

56 Cheng, H. H. L. (2001). P. 233. 57 Ibid. P. 230. 58 Ibid. 59 Bourdieu, P. (2005). The Social Structures of the Economy. 60 Other discursive structures do exist yet are less dominant in the historical and social context of Hong Kong, as discussed in the Chapter 5 Section 5.7.

themselves articulated to and by the trajectories of economic, social, cultural, and political power.”61

Chapter 2 first reviews the existing literatures in financialization and housing, then

outlines the concepts of hope and House Buying, including the social subject, the life goal,

and the temporal mapping of the future. It proposes that the dominance of the discourse of the

market in Hong Kong is the condition that makes House Buying as a hope mechanism

possible. Finally, it traces the recent social movements and the sense of gloominess among

the younger generation in Hong Kong, proposing that we should further understand the social

discontent through studying the emergence and modification of House Buying.

Chapter 3 traces how House Buying was formed from the 1970s to the 1990s. It first

discusses the watersheds in Hong Kong history – the 1966 and 1967 riots that marked the

beginning of an era of social reform of the colonial state. It then traces and analyzes the

historical trajectory of House Buying. Over the course of the 1970s to 1990s, the following

elements emerged and connected. First, the housing ladder was constructed by the colonial

state as the housing path, structurally supported by large scale public rental housing projects

and subsidized homeownership schemes. This ladder included three steps: public rental

housing, subsidized homeownership and private homeownership. Second, the self-reliant

subject was jointly articulated by both the colonial state and the local population against the

background of refugee experiences in the past and rapid economic development at the

present. Third, homeownership was transformed from being merely a shelter to a symbol of

the middle-class good life in an increasingly affluent society. Fourth, homeownership was

also perceived as a good investment object based on the belief of “little land, many people”,

and the faith in the colonial state to carry out social reform and urban planning. Fifth, the

61 Grossberg, L. (2010a). P. 8.

social plane of Hong Kong was imagined as a land of opportunity, even though social

inequality had been worsening in the 1990s. House Buying in the Formative Period helped

produce depoliticizing effect through the prioritization of individualization and self-

government.

Chapter 4 traces the reasons behind the collapse of the housing ladder and the

narrowing of the objective opportunity structure in Hong Kong since 1997 to the 2010s.

Politically, the handover of sovereignty from the British to the Chinese government in 1997

has not led to decolonialization. Rather, it formalizes the sectoral interests in the political system through influencing the Legislative Council and the election of the head of the

HKSAR government. Economically, Hong Kong has completed the process of deindustrialization and its economy now is a real-estate centric and finance-led growth regime. Socially, the society is increasingly polarized, and the opportunities derived from the

Chinese market are unequally distributed. Among the middle-class, the local professionals do

not share the benefits of economic growth like the cross-border financial workers do. The

above social problems are deepened when the government policy fails to mitigate the social

inequality and promotes homeownership as the financial solution for self-reliant individuals.

Culturally, a new wave of citizenship and a new discourse of post-materialism seem to be

emerging.

Chapter 5 discusses how the hope mechanism of House Buying was modified in

response to structural changes in the housing ladder and opportunity structure. Drawing from

the focus group data among the better educated young adults and the discussion of Ghassan

Hage’s work on waiting, it proposes that the sense of stagnation does not necessarily turn

people into “an enemy of the established order”.62 Through a discourse of “waiting for the

coming crisis”, House Buying still channels people’s discontent through being self-reliant in

the housing market. These young adults imagine homeownership to be a future safety net as

both a shelter and a financial tool.

Chapter 6 engages in the theoretical debates about hope as passivity and activity. By

reviewing the theoretical debate over hope, it proposes that these two elements coexisted in a

concrete hope mechanism like House Buying in Hong Kong. This discussion expands the

existing discussion of the micro approach in the financialization of housing, and contributes a

subtler understanding of economic culture in Hong Kong by providing a theoretical

framework to understand how hope operates in a financialized capitalist society.

62 Hirschman, A. and Rothschild, M. (1973). “The Changing Tolerance for Income Inequality in the Course of Economic Development”. P. 552.

Chapter 2 – Financialization and Hope: the Case of Hong Kong

This chapter reviews the current academic discussion of financialization of homeownership, and proposes that Hong Kong is a peculiar case in which the colonial state and the population jointly articulated homeownership and financialization together from the

1970s to the 1990s as a cultural mechanism of hope, which I call “House Buying”.63 House

Buying associates homeownership with three components – a self-reliant subject, an image of the good-life, and a temporal mapping of the future based on a housing path which was constructed as the “housing ladder” (from public rental housing, subsidized homeownership to private homeownership) and an imagined social plane with a relatively open opportunity structure. (See Figure 1.1) This mechanism emerges out of the unique colonial context, which is characterized by an absence of the discourse of the nation-state, and instead relies on the dominant discourse of the market. This research proposes that understanding the transformation of the hope mechanism of House Buying in recent years can help us probe the gloominess and frustration of the life planning of young adults in today’s Hong Kong.

2.1 Approaches to Financialization and Housing

In its 150 years before 1997, Hong Kong was a British colony. During those years,

Hong Kong transformed from an entrepôt before the 1950s into a light industrial city in the

1960s and 1970s, and became one of the major global financial hubs in the 1980s. Now, it is

63 I use “House Buying” in capital letter when I delineate it as a hope mechanism. House Buying (maai lau 買樓), instead of “homeownership” or “real estate”, is used here deliberately. Neither of the latter two common usages can capture the ambiguous nature of housing in the context of Hong Kong in which social need of home making and economic consideration of housing choice and real estate investment always intertwine. I will further elaborate the meaning of house buying on how it serves as a hope mechanism later in Section 2.4.

a Special Administrative Region (HKSAR) under the rule of China, yet it still retained its

position as a financial hub after the handover in 1997. Its finance-led regime of accumulation is different from the Anglo-Saxon model for the centrality of real estate, resulting in a unique historical development. Unlike the post-war UK and US, with relatively benevolent social protection, Hong Kong has been a colonial state with minimal social welfare and a hands-off approach to the population. Public housing is one of the few exceptions, producing housing of good quality since the 1970s. Why, then, would the local population welcome the promotion of subsidized homeownership and the construction of the housing ladder in the

1980s, which may have signaled the “neo-liberal” retreat of the state from providing public housing – the most important, affordable and reliable social policy? In pursuing this question,

I trace how the state and the population jointly constructed a cultural mechanism of hope as

House Buying since the 1970s. This was achieved by articulating financialization and homeownership together with the market discourse, the self-reliant subject formation and an imagination of a social plane with open opportunities.

This section reviews academic approaches to financialization and housing, and then proposes the cultural mechanism of hope – House Buying as the perspective with which to understand the relation of financialized housing to everyday life in Hong Kong. The growing dominance of the financial sector in the economic structure, and the popularization of financial products in people’s everyday lives has caught the attention of many scholars ranging from political economists to cultural theorists. “Financialization” has become a common keyword in many academic discussions, especially after the global financial crisis in

2008.64 Financialization as a keyword, when used loosely, “is a bit like ‘globalization’ – a

64 For instance, see Engelen, E. (2008). “The Case for Financialization”; Montgomerie, J. and Williams, K. (2009). “Financialised Capitalism: After the Crisis and Beyond Neoliberalism”, and van der Zwan, N. (2014). “Making Sense of Financialization”.

convenient word for a bundle of more or less discrete structural changes in the economies of the industrialized world”.65 van der Zwan nonetheless provides a useful topology and summarizes three approaches in the academic debates of financialization – the macro, the meso and the micro.66

The macro approach points to financialization as an emerging regime of accumulation

in the global capitalist system that is superseded industrialization since 1970s. Krippner’s

definition would be an exemplar of this approach: financialization is seen as “a pattern of

accumulation in which profits accrue primarily through financial channels rather than through

trade and commodity production”.67 One core concern of this macro approach is the inherent

instability of financialization. The combination of the accumulation of debt on one hand, and

unstable and volatile pricing of assets on the other, alongside recurring crisis and risk are an

inevitable part of this finance-led growth regime.68 In this approach, financialization is often

seen as a process that is driven by two key actors: “a wealth-maximizing rentier class or the

imperial aspirations of the American state”.69 In the face of heighted international

competition, the capitalist elites divert their investment from production to finance while the

American state resolves its “crisis of hegemony” after the Vietnam War.70

The meso approach probes into the influence of financial market and related

shareholder value on the managerial practice in the non-financial corporations. The attention

shifts from steady and reliable profit to quarter-to-quarter performance in stock price. The

65 Dore, R. (2008). “Financialization of the global economy”. P. 1097. 66 van der Zwan, N. (2014). Pp. 101 – 102 67 Krippner, G. (2005). The Financialization of the American Economy. P. 174. 68 Stockhammer, E. (2012). “Financialization, Income Distribution and the Crisis”. 69 van der Zwan, N. (2014). P. 105 70 Arrighi, G. (1994). The Long Twentieth Century: Money, Power and the Origins of Our Times; Arrighi, G. (2003). The Social and Political Economy of Global Turbulence.

management class in these corporations performs “innovation” and “efficiency” through

downsizing, offshoring and contracting-out, and this goes along with shifting the pressure

from financial market to the employees.71

The micro approach is concerned with the rise of the citizen as investor and the

influence of “financialized imagination”72 on people’s everyday life.73 The structural changes described in the above macro and meso background include the retreat of the state in social welfare and the fluctuation in economy, increasingly flexible employment practices in the workplace, and the displacement of risk onto individuals. In this context, individuals increasingly resort to financial markets in order to resolve their own financial problems.74

Debts and investment behavior become part of everyday life.75 Under financial capitalism,

there is a preferred subject position – the investor subject. An investor manages money

differently when compared to the traditional way of savings. While savings requires delaying

gratification – save the money and leave it untouched – investment requires people to constantly look after the money. Money and the portfolio have to be “constantly fondled, mined daily like a well-stocked refrigerator”.76 The investor, often addressed as a male

subject, as characterized by an entrepreneur-like mentality that embraces and calculates risk

71 For instance, see Dobbin, F., & Zorn, D. (2005). “Corporate malfeasance and the myth of shareholder value”; Widmer, F. (2011). “Institutional investors, corporate elites and the building of a market for corporate control”. 72 For instance, Havien, M. (2014a) proposed that “financialization also refers to the way financial goals, ideas and practices start to shape and inﬂuence economic actors outside and beyond the financial sector. So, for instance, increasingly corporations don’t see themselves as producers of goods and services (let alone as employers or community members), but rather as vehicles for financial speculation.” Pp. 106 – 107. Havien, M. (2014a). Crises of Imagination, Crises of Power: Capitalism, Creativity and the Commons. 73 Langley, P. (2006). “The making of investor subjects in Anglo-American pensions”. 74 Havien, M. (2014b). Cultures of Financialization: Fictitious Capital in Popular Culture and Everyday Life. P. 51. 75 Garcıa-Lamarca, M. & Kaika, M. (2016). “Mortgaged lives - the biopolitics of debt and housing financialization”. 76 Martin, R. (2002). Financialization of Daily Life. P. 7

actively and is willing to take up the financial responsibility for himself and his family.77

Paradoxically, from the macro perspective, financialization regularly creates crisis and

precarity. Yet on the micro level, investment is offered by the state and financial institutions

to be the “remedy” to their personal precariousness with the promise that one can thrive or at

least safeguard oneself and his/her family through putting effort into acquiring investment

knowledge and playing the investment game carefully.78 The investor subject and the cultural

formation of financialization are visible in keywords like, “security” and “creativity”,79 and in media such as popular children’s culture80 or financial news and media programs.81

Within the above broad discussion of financialization, real estate is a major financial

sector alongside finance and insurance (together they are called FIRE) that is an as yet

underexplored area in the humanities and cultural studies. Real estate is often rendered as

“playing a minor role” or being “seen as one of the bearers of financialization”.82

But real estate has two characteristics that mark its difference from other sectors.

First, real estate is the financial name for the built environment, with housing as one of its

most important areas. Housing as real estate can be in conflict with other social uses of

77 For the discussion of the gendered subject in financialization, see Joseph, M. (2013). “Gender, entrepreneurial subjectivity, and pathologies of personal finance”; and also Langley, P. (2006). 78 Haiven, M. (2014a). Cultures of Financialization: Fictitious Capital in Popular Culture and Everyday Life. “As such, the recent application of the metaphor of investment to all areas of social life is far from innocent. It is both symptomatic and constitutive of a shift towards financialization. That is, the fact that the metaphor of ‘investment’ has become an expedient way for people to articulate their relationships and choices is, from one angle, evidence of the saturation of the general consciousness of society with financial ideas. But it is also a key means by which that saturation is advanced, the way financial modes of thinking and understanding are stitched into and throughout the social fabric. This cultural and linguistic shift both reveals and advances a broader socio-economic reality of financialization.” P. 17. 79 Ibid. P. 1. 80 Ibid. Chapter 3. 81 Wang, J. (2017). “’Stir-frying’ Internet finance: Financialization and the institutional role of financial news in China”. 82 Fernandez, R. & Aalbers, M. (2016). “Financialization and Housing between Globalization and Varieties of Capitalism”. P. 72

housing including sheltering and family making.83 Second, real estate consists of a unique financial technology – the mortgage, which is the most accessible financial tool to ordinary people. In recent years, a series of studies84 on the financialization of housing began to emerge suggesting “the financialization of home forces more and more households to see acquiring a house not just as a home, as a place to live, but as an investment, as something to put equity into and take equity from”.85

The macro approach addresses the specificity of real estate in financialization as an accumulation regime by exploring the mortgage market’s role in the process of capital switching,86 “when capital flows from one sector of the economy to the other”.87 Aalbers discusses four circuits of capital switching: the primary, which includes production, manufacturing, and industrial sectors; the secondary, which refers to the production and consumption of built environment, like infrastructure for production and housing for consumption; the tertiary, or social infrastructure, like investment in technology, science, conditions of employees, health and education, etc.; and the quaternary – financial markets for the trade in money, credit, securities, etc..88 The role of the mortgage market helped in

83 See Pattillo, M. (2013) and Rolnik, R. (2013) for the academic debate between commodification and social rights of housing. Pattillo, M. (2013). “Housing: Commodity versus Right”; Rolnik, R. (2013). “Late Neoliberalism: The Financialization of Homeownership and Housing Rights”. 84 To name a few: Aalbers, M. (2008) “The Financialization of Home and the Mortgage Market Crisis”; Allon, F. (2015). “Everyday Leverage, or Leveraging the Everyday”; Chua, B. H. (2015) “Financialising public housing as an asset for retirement in Singapore”; Forrest, R. (2015) “The ongoing financialisation of homeownership new times new contexts”; Garcıa-Lamarca, M. & Kaika, M. (2016) “Mortgaged lives - the biopolitics of debt and housing financialisation”; Pellandini-Simanyi, L. Hammer, F. & Vargha Z. (2015). “The Financialization of Everyday life or the Domestication of Finance”; Smith, S. J. (2015). “Owner occupation: at home in a spatial, financial paradox” & van Loon, J. & Aalbers, M. (2017) “How Real Estate Became Just another Asset Class: The Financialization of the Investment Strategies of Dutch Institutional Investors”. 85 Aalbers, M. (2008). P. 152. Likewise, Forrest, R. (2015), in the introduction to the special issue of the financialization of housing, also similar observed that “if we are home owners, we need to be primarily portfolio managers with the equity in our property as our main asset”. P. 2. 86 Aalbers, M. (2008); Fernandez, R. & Aalbers, M. (2016) 87 Aalbers, M. (2008). P. 149. 88 Aalbers, M. (2008). P. 149.

facilitating capital switching from the primary to the secondary circuit. The mortgage market and the loosening of mortgage requirements fueled rising housing prices by allowing the

homeowners access to capital.

In the age of the financialization, mortgage markets became “markets in their own

right” in the global capitalist system.89 One of the consequences was the securitization of

mortgage loans and secondary mortgage markets. This development of financialized

mortgage markets leads to the global economic crisis caused by subprime mortgages in 2008.

Consequently, the fate of local homeowners is now tied to that of global investors. After

years of quantitative easing in the US and the Chinese economic stimulus program90 since

2008, the financialization of housing has further expanded. The housing market has been used to absorb the wall of money – the large amount of money generated by the US and the

Chinese economic programs, albeit under uneven trajectories based on national institutional structures.91 The financialization of housing can cause problems to the state’s legitimacy if the government fails to negotiate the demands of social rights and welfare, and to regulate the market forces in relation to the housing needs of the population. Chua,92 a researcher in

housing of Singapore, presents a case for the financialization of public housing as an asset for retirement planning in which such financialization resulted in a crisis of the state’s legitimacy.

The meso approach concerns the influence of the mortgage market on the urban setting and local community through the role of financial institutions and institutional

89 Ibid. P. 150. 90 It was a US$586 billion stimulus package announced by the Chinese government in 2008. One key area was the investment in housing and infrastructure. 91 Fernandez, R. & Aalbers, M. (2016). 92 Chua, B. H. (1997). Political Legitimacy and Housing: Stakeholding in Singapore; Chua, B. H. (2015).

investors. On one hand, the mortgage market heightened gender, race and class segregation in the local community, and uneven development between different districts via gentrification and ghettoization.93 For instance, when the federal government in the US intervened into the private mortgage market by insuring or providing direct home loans, it developed a system of appraisal that evaluated individual dwelling units as well as neighborhoods in order to determine value and risk.94 But this system was intertwined with racial, ethnic, gender and

anti-urban biases, and nonwhite people and women were by and large penalized.95 The

marginalization of these populations in the mortgage market provided the ideal condition for

predatory lending (high interest rates, high fees and onerous non-payment penalties)

following the deregulation of the finance market and the invention of new financial products in the late 1990s.96 On the other hand, van Loon and Aalbers’s research on institutional

investors in Netherlands shows that the investors withdrew from direct ownership of

properties and have been disconnected from the locality since the 1980s. They transform real

estate from “opaque, local, non-standardized goods” into an abstract form of finance capital –

real estate shares. This financialization of real estate removes the connection between

institutional investors and the geographies of their investment, and turns real estates into

“liquid, globally traded financial assets”.97

Adding to the previous discussion of the “investor subject” in financialization, the

micro approach highlights the importance of the mortgage and its relation to people’s

everyday life and the social need of sheltering and home making. Garcıa-Lamarca and

93 Harvey, D. (1985). The Urbanization of Capital: Studies in the History and Theory of Capitalist Urbanization; Aalbers, M. (2007). “Geographies of Housing Finance: The Mortgage Market in Milan, Italy”. 94 Stuart, G. (2003). Discriminating Risk: The U.S. Mortgage Lending Industry in the Twentieth Century. 95 Pattillo, M. (2013). Pp. 513 – 514. 96 Rugh, J. & Massey, D. (2010). “Racial Segregation and the American Foreclosure Crisis”. 97 For instance, van Loon, J. & Aalbers, M. (2017) discusses the case of Dutch institutional investors. P. 221.

Kaika98 exemplify this approach. They propose that financialization isn’t only a process of

macroeconomic and policy change, but also a biopolitical process that recruits the local

population and their livelihoods. Mortgage contracts connect the livelihood of local

populations to the global capitalist system and real-estate speculation with the promise of

optimizing income and wealth. Through the concept of “mortgaged lives”, they historicize

the process of these embodied practices in housing financialization in Spain since 1939 and

the further liberalization of mortgages starting from the late 1990s.

The process of embodiment of financial knowledge and mentality isn’t a one-sided,

top-down imposition, but a process of negotiating with existing knowledge and social

relations. Pellandini-Simanyi, Hammer, and Vargha99 discuss the domestication of mortgage loans in Hungary and explore the complex subject formation process of the investor subject through their ethnography of Hungarian mortgage borrowers. They argue that financialization and the promotion of mortgage loans don’t directly lead to people embracing more risk.

Rather, the mortgage interacts with and is domesticated within people’s existing social relations and cultural frameworks. For instance, market-based mortgage borrowers are supposedly more influenced by investment knowledge. But, in actual practice, the state- subsidized mortgage borrowers are more financially savvy and calculative than those with market-based mortgage. They make use of the calculative mentality they learned in socialist times to spot profit opportunities, as they were used to taking advantage of the loopholes of socialist state policy and to appropriating state property for personal use. In other words, borrowers of mortgage loan incorporate or domesticate the logic of finance within the realm of their existing cultural and social framework of everyday life.

98 Garcıa-Lamarca, M. & Kaika, M. (2016). 99 Pellandini-Simanyi, L. Hammer, F. & Vargha Z. (2015).

Mortgage borrowers’ loan practice also consists of an affective dimension towards the future, and borrowers have a more complex relation to mortgage and debt than the abstraction of social relations by financialization. Allon100 discusses the leveraging effect of debt in

subprime mortgage and its relationship with consumers. Instead of viewing debt as part of the

one-sided process of abstraction, depersonalization, and dematerialization in capitalism,

Allon proposes that finance rearticulates and reformulates the everyday settings of debt and

indebtedness into “evergrowing webs of profit-generating interconnection between the public

and the private and between consumer and corporate indebtedness and financial markets”.101

Allon provides evidence of this new affective articulation through a case in Stockton,

California, the sub-prime mortgage capital of the United States. Subprime mortgage borrowers in Stockton were actively embracing debt, risk, and the leveraging effect of mortgage loans not only because of rational calculation and the benefits from asset- acquisition. To them, this was a complex affective attitude, anxious yet hopeful, towards the

future that is articulated with the financial tool of mortgage “as key to the freedom of a more secure future” and “a feeling of being propelled into a better future, of no time to lose, not even the time to read the fine print of mortgage documents”.102 This pressing sense of a future encouraged or even urged people to set foot in the housing market as soon as possible.

It is not only financialization and housing in the US that utilizes this element of “hope and

futurity”. We can find similar promise towards future life goals and calculated life planning

in the aforementioned Spanish and Hungarian context – the promise of optimizing income

and wealth in Spain, and the calculation of taking advantage of the mortgage scheme in

100 Allon, F. (2015). 101 Ibid. P. 702. 102 Ibid. P. 700.

Hungary. But this dimension of “hope and futurity” has not been fully explored in these studies.

2.2 Cultural Mechanism of Hope – the Case of Hong Kong

My research explores this “hope and futurity” dimension in the micro approach to financialization and housing. The contribution of this research to the above approach is twofold. On the one hand, it proposes a framework – the cultural mechanism of hope. On the other hand, this aspect is explored within the unique context of Hong Kong as a colonial global city, in which the discourse of the market has been in dominance since the 1970s. I name the cultural mechanism of hope in the financialization of housing in Hong Kong

“House Buying”.

Choosing Hong Kong as the case through which to study financialization and housing is not accidental. Hong Kong is one of the major global financial hubs since the 1980s and has been the least affordable city for housing in the world since 2010 for eight consecutive years. Smart and Lee,103 exploring the finance-led regime of accumulation through the macro

approach,104 proposed that the Hong Kong (and Japanese)’s real-estate-centric model is

different from the Anglo-Saxon’s model that is based on capital gains, dividends, interest,

and pension income from sufficient stocks of property. One key contextual difference in these

two models is the development of the welfare state and its relation to housing. The post-war

period of the US was characterized by the relatively liberal and benevolent social protection

103 Smart, A. & Lee, J. (2003a). “Housing and regulation theory – Domestic demand and global financialization”; Smart, A. & Lee, J. (2003b). “Financialization and the Role of Real Estate in Hong Kong’s Regime of Accumulation”. 104 Boyer, R. (2000) “Is a Finance-Led Growth Regime a Viable Alternative to Fordism? A Preliminary Analysis.”

under the New Deal. On the contrary, the colonial state of Hong Kong refused to reform its

low taxation system and maintained minimal social welfare in the 1950s and 60s.105

Housing sits at a peculiarly contradictory position in both contexts. In the US context, housing was the “wobbly pillar”106 or the weakest link in the whole system of social

protection where the market remained the dominant force in housing provision. In the Hong

Kong context, housing was the area most invested in and controlled by the colonial state

since the middle of the 1950s, despite its traditionally hands-off approach to the local

population. Since the early 1970s, the colonial government developed the public rental

housing project into one of the largest schemes in the world to provide cheap and intensive

labor to the development of light industry through subsidizing the rent of the working class.

The housing project also won its legitimacy across the population. Since then, the project has

housed nearly half of the population with good quality public housing in affordable rate of

rent.

Emerging out of this context, the financialization of homeownership is not only about

the deregulation of the financial sector and the liberation of mortgage. In Hong Kong, the

colonial state began to promote homeownership in the early 1980s. As a city with good

quality public housing, the success of homeownership promotion is based not only on the

relaxation of mortgage requirements, but also on the persuasion of the colonial state in

attracting the local population to give up the good quality public housing units they were

enjoying and venture into the private housing market.

I propose that one of the major reasons behind the success of housing privatization

was securing the consent of the population in “teeth-gritting harmony”. Financialization and

105 Goodstadt, L. (2010). “Fiscal Freedom and the Making of Hong Kong's Capitalist Society”. 106 Malpass, P. (2003) “Wobbly Pillar? Housing and the British Postwar Welfare State”.

homeownership were articulated to a cultural mechanism of hope – House Buying – jointly by the colonial state and the population. This mechanism articulates different elements together, including the state policy of welfare and housing, the refugee experience, the discourse of the market, the self-reliant subject, the ideology of open opportunities, and the

ever-booming housing market from the 1970s to the 1990s.107 The following sections further

examine the concept of hope and futurity, and delineate the specificity of House Buying in

the context of Hong Kong.

2.3 Thinking through Hope – the Social Subject, the Good Life, and Temporal Mapping

of the Future

Hope is both a verb signifying the act of anticipation and a noun denoting the belief in

the attainability of certain goals. In this research, it is understood as an accumulation of

expectations based on personal efforts, care, attention, knowledge, and experience. It is

articulated by and mediated through discourses.108 A subtle distinction must be made between

hope as a cognitive understanding and hopefulness/hopelessness as an emotion/affect,

although they are usually in a direct, even corresponding relation. One who accumulates and

possesses more hope is more hopeful than those who don’t, and vice versa. Taken together,

hope is a mixture of calculation and emotion with a temporal relation in which people are

influenced, if not determined, “by the future”.109 In this research, the expectations associated with hope are social – expecting to augment one’s social being in a society. In other words, hope is about how one fancies the chance of improving one’s self and/or one’s social position

107 The historical formation of House Buying will be elaborated in detail in Chapter 3. 108 Hage’s discussion on hope, social beings and stuckedness is the theoretical foundation for me to think through the issue of house buying and hope in this research. There can be other qualitatively different ‘hope’ in terms of present and future connection. Hage, G. (2003). Against Paranoid Nationalism: Searching for Hope in a Shrinking Society. 109 Bloch, E. (1986). The Principle of Hope. P. 5. See also Hage (2003). P. 10.

within a society.110 This research focuses on the social dimension and explores the

mechanism that distributes the shares of expectation. A mechanism is the combinations of

objective social structures and discourses that articulate the socially defined yet personally

internalized subject positions, trajectories, benchmarks, and life goals. This framework

provides insight into the questions of futurity that encompass people’s social needs, material interests, practical calculation, cultural expectation, and affective assessment towards their life planning.

The contribution of thinking through hope is to advance our understanding of culture

by bringing forward the importance of futurity. Appardurai111 reflects on the stereotypical

opposition between culture and economy, and suggests that the distinction between them in

our common sense is based on temporality. Culture is often associated with the past, while economy, particularly in the face of development, is future-oriented. Keywords like “habit, custom, heritage, tradition” fall into the category of culture, while “plans, hopes, goals, targets” are often implied in economic development.112 In fact, futurity does exist in most

approaches to culture. Norms, beliefs, and values are central to cultures, and they are not

merely sediments from the past. These are also guidelines, plans, maps and “specific and

multiple designs” for people to imagine and practice in their social life.113

Society has always been distributing hope through different mechanisms. One type of

mechanism was the imperial examination in China. It opened up opportunities of social

mobility based on talent to those from different classes who could then be recruited and

110 For instance, Zigon, J. (2009) discusses that hope in Moscow as the resource for a day-to-day project of living, including “pray, confess, attend classes, study hard, actively avoid alcohol”. Hope “is not necessarily aimed at the future good, but primarily at the perseverance of a sane life”. P. 260. Zigon, J. (2009). “Hope dies last - Two aspects of hope in contemporary Moscow”. 111 Appadurai, A. (2004) “The Capacity to Aspire: Culture and the Terms of Recognition.” 112 Ibid. p. 60 113 Ibid. p. 61

incorporated into the state government. The hope towards achieving social mobility appeared to be egalitarian since this imperial examination was open to all. In reality, the chances remained slim for those with limited social capital and who lacked personal connections with the government officials. The successful candidates were predominantly the descendants of the established official families and the gentry class.114

Religion is perhaps a more common mechanism that has historically distributed hope.

Marxism too, attempts to produce hope by putting the future in the hands of human beings

through the effort and planning of the proletariat, or at least the socialist state. But this belief in hope, that human effort can make a difference or at least a different future, is not the monopoly of either religion or Marxism. It is a common theme in modern societies. In fact, one major characteristic of modernity that distinguishes modern societies from traditional ones is its relatively abundant production and egalitarian distribution of hope. I will further

specify the mechanism of hope by pointing out its three interconnected components – the

social subject, good-life goal, and temporal mapping of the future.

The mechanism of hope assumes people are capable of augmenting their “social

beings”. Here I adapt Hage’s use of “social being”. This term doesn’t only refer to a subject

with agency who is situated in (thus, being in) a society and is affected by the socialization

process. This also concerns the quality of such being – “a life that is more meaningful,

satisfactory, fulfilling, etc”.115 Social being is not a static state and social subjects are not

“passive recipients of being”,116 as the quality and quantity of being can be pursued and

accumulated in one’s social life. In this light, hope is one’s expectation of acquiring more

114 Fairbank, J. K. & Goldman, M. (2006). China: A New History. Pp. 94 - 95; 104. 115 Hage, G. (2004). “Migration, Hope and The Making Of Subjectivity In Transnational Capitalism - Ghassan Hage in Conversation with Dimitris Papadopoulos / Interviewer: D. Papadopoulos.” P. 153. 116 Hage, G. (2003). P. 16.

meaningfulness in the future. However, this is often distributed unevenly. Some may live a

meaningful life with more hope, while others live with less. Furthermore, this distribution

may vary in different historical periods and it can be evaluated differently according to

different value systems with different constructions of subject position. Value systems as the

cultural dimension of hope bring us to the second component of the mechanism.

The mechanism of hope is built upon a collective understanding of the good life.

What is being studied in this research is not the immediate calculative behaviours of one

specific commodity over another, like “for this piece of land or that, for that marriage

connection or another one, for this job in the bureaucracy as opposed to that job overseas, for

this pair of shoes over that pair of trousers”.117 The focus is put on the cultural imagination of the good life. The good life can be composed of social promises, like “upward mobility, job

security, political and social equality, and lively, durable intimacy”.118 It can also be the result

of receiving joy from improving one self and achieving bodily improvement.119 But the key is

that all these imaginations and expectations are guided by “general norms, presumptions and

axioms”,120 and thus, are socially and culturally grounded. The good life as the object of hope

must be attainable, and the one who pursues this knows, or at least believes in, its

attainability. Otherwise this expectation is merely a kind of daydreaming. Attainability requires a temporal mapping towards the future, and this connects to the third component of hope.

117 Appadurai, A. (2004). P. 68. 118 Berlant, L. (2011). Cruel Optimism. P. 3. 119 See Hage, G. (2002). “‘On the Side of Life’ - Joy and the Capacity of Being - with Ghassan Hage / Interviewer: M. Zournazi”; Sennett, R. (2007). The Corrosion of Character. 120 Appadurai, A. (2004). P. 68

The mechanism of hope consists of a temporal mapping that connects the present and

future in an indefinite yet causal relation. If identification (i.e. nationalism or localism) is

more about articulating present to the past with glory or suffering, and consumer desire is all

about the present as immediate gratification, then hope is about expecting a better, or at least

different, tomorrow through a social map of the good life. This expectation necessarily

involves a temporal mapping of future movement that is varied in directions, speeds and

patterns. While expecting upward movement on the cultural map is the general desirable goal

of augmenting social being, foreseeing downward movement is often the unpleasant hopeless

condition of which people want to rid themselves. Horizontal movement is a more ambiguous

recent condition that can be interpreted differently as hopeful or hopeless according to

different cultural maps and social positions. For example, freelance workers may perceive

this as being either lack of employment protection, or being freed from the traditional career

path and controlling one’s own fate. Similarly, expecting rapid or slow movement, being

satisfied with being still, discontent about stagnancy in life, and predicting uncertain or

consistent future movements are different temporal mappings, and their relation to hope can

be ambiguous and should be studied historically and empirically.

Recent developments in the study of hope offer us methodological direction in studying the mechanism of hope with an emphasis on historicization. For instance, Kleist and

Jansen,121 in a recent special issue on hope studies, proposed a list of important questions that

the study of hope in our time should answer. These questions connect to this project of hope

mechanisms in Hong Kong where young adults are living in an era of protracted crisis with

121 Kleist, N. and Jansen, S. (2016). “Hope over Time -- Crisis, Immobility and Future-Making”.

uncertainty and social immobility. At the end of their list is the crucial question, how are hopes “generated, distributed, negotiated, sustained and/or transformed” over time?122

2.4 House Buying as Hope Mechanism under the Discourse of the Market

Hage proposes the importance of hope in maintaining the stability of capitalism. In his

discussion of the Australian context, the nation-state took the major role in distributing hope

through providing dreams of upward social mobility.123 To further contextualize this secret of

capitalism, this section is going to review Hong Kong’s peculiar colonial context in the absence of the nation-state and the prominence of the discourse of the market. This context

enables the interconnection of social need and economic calculation in the hope mechanism

of house buying. Mathews, Lui and Ma124 provide this perspective in thinking about the

uniqueness of the Hong Kong context. They propose that in other modern societies, the

discourses of both the state and the market usually coexist and their co-presence is taken for

granted. The state discourse advocates for citizen’s loyalty – for instance, “you must cherish

and defend your nation and its way of life”,125 while the market discourse assumes a free

world of consumption that is unbounded by anything – “You can buy, do, and be anything in

the world that you want”.126 Hidden contradictions exist between these two discourses, but,

122 “Which forms of temporal reasonings can we identify amongst people in situations of protracted crisis? How do they engage with futures in social configurations where the future is a fraught notion, or perhaps: an even more fraught notion than usually? How are hopes incorporated into projects of government? What are the visions and repositories of hope and meaningful futures in situations of outspoken uncertainty and physical or social immobility? Crucially, and here lays a key intended contribution of this Special Issue, they ask: how are they generated, distributed, negotiated, sustained and/or transformed -- in other words, how do hopes themselves develop over time?” Kleist, N. and Jansen, S. (2016). P. 388. 123 Hage, G. (2003). P. 14. 124 Gordon Mathews, Lui Tai-lok and Eric Ma Kit-wai are three key scholars in Hong Kong. Gordon Mathews is an anthropologist studying issues about globalization in Hong Kong. One recent publication of him is a study of Chungking Mansions in Hong Kong as “Ghetto at the Center of the World”. Lui Tai-lok is a sociologist and is interested in the formation of middle-class in Hong Kong. Eric Ma is a communication scholar and the pioneer in studying the identity formation of Hong Kongers. 125 Mathews, G., Lui, T. L. & Ma, E. K. W. (2007). Hong Kong, China: Learning to Belong to a Nation. P. 12. 126 Ibid.

very often, they are too taken for granted for most people to notice. One core contradiction is

on “constraint”; loyalty imposes a constraint in consumer choice (one must be loyal to the

state that is above all market consideration), while consumption secularizes all the sacred

(everything, even one’s loyalty to the state, can be offered for sale). They conclude that the

discourse of the market “entails detachment and calculation”,127 instead of attachment and

love.

Home, land and Hong Kong identity, which usually involve commitment and

attachment towards a specific locality, are articulated to the global market within the

discourse of the market. Home can be anywhere as long as you have the purchasing power to

secure a middle-class lifestyle – “I can make anywhere in the world my home, as long as I’m

near an airport”.128 Land is just yet another commodity which is detached from emotion.

“One newspaper article describes how land in Hong Kong is not viewed as one’s sacred

motherland as in China: ‘in Hong Kong land is not holy … it is just a commodity’.”129 Unlike

the previous refugee generation who fled to Hong Kong after the WWII, the first local-born

Hong Kongers began to treat the city they live as their home only since the 1970s. This

home-making is not in the form of being loyal to Hong Kong, but is based on an economic

discursive framework: “Hong Kong offered better prospects for the attainment of an affluent

life than anywhere else”.130

Hong Kong identity is thus defined “in part, as loyalty to the global market over any

state”.131 In this discourse, self-interest and calculation are valued over love and emotion.

127 Ibid. P. 16. 128 Ibid. P. 15. 129 As cited in Mathews, G., Lui, T. L. & Ma, E. K. W. (2007). P. 16. 130 Ibid. 131 Ibid. P. 15.

Thus, this is all about “a judgment based on personal calculation of proﬁt and loss rather than on one’s belonging to a particular place and society to which one is unstintingly loyal”.132 But

as Mathews, Lui and Ma also noted, we should treat the discourse of the market as an “ideal

type”. People’s actual practices are often messier when involving other social needs and

emotional attachments.133

In capitalist societies, homeownership is situated at the intersection between differing

social needs, such as sheltering and family formation. People in Hong Kong, with the

dominance of the market discourse, take their inseparability for granted. For example, in his

cross-cultural comparison of the ideology of homeownership between East and West, Richard

Roland highlights the inseparable connection between homeownership and property

investment as the unique characteristic of Hong Kong’s housing culture when compared to

other places like the UK and Japan.134 But neither “homeownership” nor “real estate

investment” in the Anglo-American context fully captures this ambiguous nature of housing

culture in Hong Kong. Hence, this research uses House Buying to name the cultural

mechanism of hope that articulates financialization and homeownership together.

In Hong Kong’s Cantonese language, people use maai lau (買樓) to signify the act of acquiring homeownership. “Maai” means “buy” and “lau” means “a house”, and can literally

132 Ibid. P. 16. This globalized home-making in the market has its downside. Zidong Xu, a literary scholar, has already pointed out, finding the lost home and the sense of uprootedness have been the common theme of literatures in the 1990s of Hong Kong. Xu, Z. D. (2000). “Here is an Alienated Place: On Hong Kong Short Stories in Recent Years”. (in Chinese). 133 Ibid. As they said, “of course, in actual practice, buyers and sellers on the market have a vast range of motivations and emotions; but in an abstract sense, in terms of ‘ideal types,’ if the discourse of the state entails attachment, and love, the discourse of the market entails detachment and calculation. This is what we see in Hong Kong.” 134 “The culture of speculation is a peculiar and particularly salient phenomenon within Hong Kong’s homeownership ideology and pattern of housing investment consumption, with home purchases and related activities becoming a significant part of life.” Ronald, R. (2006). The Ideology of Home Ownership: Homeowner Societies and the Role of Housing. P. 135.

be translated as “house buying”.135 This term has very different spatial and temporal implications in its relation to the market if we compare it with “homeownership” and “real estate investment”. “Home” usually carries the meaning of a private space in which one dwells, and home making is a process that transforms a house into a castle with his/her own personal touch. This process involves devoting time, labor, and affection to decorate the private space to suit one’s way of living, taste and family formation. “Ownership” emphasizes the acquisition and possession of the exclusive property rights to that private space. This carries a sense of safeguarding the private space that we call “home” from other people’s invasion through acquiring the exclusive property ownership. The transaction of property rights as commodity and investment good is possible, but is not the denotation in the phrase “homeownership” per se. Other terms, like “real estate” and “property”, are commonly used when a house is placed in the field of economics that involves active behaviours in the market. In this sense, the realms of the social and the economic are separated through different words – “home” or “real estate”.136

“House buying” as a word usage is different in its ambiguous nature that includes

both homeownership as social need and real estate investment as economic calculation.

“House” (most often an apartment in the context of Hong Kong) is a man-made object that encloses a space with unspecific use. One can treat a house as temporary shelter, make it into

home, rent it out as an asset, and/or treat it like an investment object. “House” lacks the

personal attachment and devotion that “home” assumes. “Buying” and “selling” are two sides

of the decision in the marketplace. It highlights the act of transaction in the blink-of-an-eye,

135 Cantonese language uses a separate noun “gaa” (家) to mean “home”. Gaa has a dual meaning of “family” and a “family house”. Chinese people do not say “buy a gaa” like “buy a home” in the English language. 136 “The conflation of ‘home’ and ‘homeownership’ in the English language illustrates why the terms are so resistant to precise translation in other languages.” Gurney, C. M. (1999a) “Lowering the Drawbridge - A Case Study of Analogy and Metaphor in the Social Construction of Homeownership”. P. 1708.

and is different from the longer duration of owning, and the immovability in “real estate”.

“House buying” as a hope mechanism is developed ambiguously in a way that presumes the

possibility of satisfying both social and economic needs through the market. Its connection

with hope was a historical contingent articulation between the 1970s and the 1990s, and such

connection is struggled over and questioned in today’s Hong Kong. As a hope mechanism, it

consists of an individual subject that hopes to achieve self-reliance through the private

market, a good-life goal that connects buying a house with middle-class status and way of

living, and a temporal mapping of the future that connects switching from public to private

housing with a progressive life trajectory.137

A self-reliant individual subject has been constructed in the official discourse of

homeownership in Hong Kong. For instance, the colonial government had repeatedly emphasized nurturing independent citizens who can “stand on their own feet”. “Hong Kong is

not, in the full sense, a welfare state. People are expected to stand on their own feet, a

principle which accords with their proud and independent spirit.”138

When applied to the housing policy, the colonial government constructed a three-step

“housing ladder” to encourage homeownership starting from the mid-1970s. These three

steps are public rental housing, subsidized homeownership, and private homeownership.

Public rental housing is the starting point for the lower-class. The colonial state expected that

after enjoying years of cheap rent, those capable persons and/or their children should have

worked their way up, and they should withdraw from enjoying social resources and set foot in

the private housing market. “Public housing tenants are heavily subsidized by the community,

and many have become quite well-off after enjoying years of cheap rentals.”139 However, the

137 Chapter 2 will further discuss this historical formation. 138 Hong Kong Government. (1976). “A Review of 1975”. P.6. 139 Hong Kong Housing Authority. (1984a). “A Review of Public Housing Allocation Policies”. P.14.

private housing price was already expensive in the 1970s, and hence the colonial government designed a middle step between public rental and private homeownership – the subsidized

Home Ownership Scheme (HOS). In this scheme, the government took the role of building and selling apartments to the local population at a price that was usually lower than the market level (usually 30% to 40% discount). The eligible applicants included the public housing tenants and middle-to-low income families who cannot afford homeownership in the private market.

The message behind the construction of the “housing ladder” is that public housing is only for the needy, and the capable citizen who became well-off should stand on their own

feet and move on to embrace homeownership. The colonial state had helped through

constructing a housing path for the capable to be self-reliant and reach the final destination of

homeownership. This individual subject has been articulated with the emergence of the Hong

Kong Dream in the 1970s within the local population. In this dream, an individual can move

up the social ladder by his own effort and ability under this formula – “hard work plus a little

bit of luck could bring great success”.140

The self-reliant social subject was not only instituted through a top-down construction

of the official discourse, but also through a common life trajectory in the 1970s within the

younger local-born generation, especially when they compared their upwardly mobile

experience with the transient experience of the previous refugee generation. This was

articulated with the discourse of the market as the framework that connected one’s personal

experience with social change. One element – “choice” in the market – is particularly salient.

Thus, an individual social agent can control his/her own fate through acquiring enough

wealth, and having the choice and freedom to determine what to do in the market. One

140 Mathews, G., Lui, T. L. and Ma, E. K. W. (2007). P. 36.

significant example is demonstrated in Rosen’s ethnographic study of Mei Foo Sun Chuen –

the first large private housing estate that marked the rise of the middle class in Hong Kong in

the early 1970s.141 Rosen concludes her fieldwork by pointing out the significance of individual choice and the pleasure associated with it in the housing market.

If (the middle classes) are happier in their daily lives, it is at least partly because they perceive a new element of choice in much of what their days include. … Likewise, the flat in Mei Foo (the middle class private housing estate) is not an assigned accommodation based on waiting lists in the Housing Authority headquarters; Mei Foo was a choice made, and part of the pleasure of the new environment is the pleasure of a choice well made.142

Meanwhile, homeownership had also been seen as a good investment object. Sherry

Rosen also finds that “flats in Mei Foo Sun Chuen are currently considered excellent

investments”.143 This continued to be so in the late 1990s, when Koo summarizes, at the end

of her research, “The positive experience shared by a ‘successful’ group, buying flats in their

thirties or forties in the late 70’s, 80’s or early 90’s, made them hold more strongly to the

spirit or ethos. After years of development, …the ethos – perceive housing as an investment –

is strongly built up among the public.”144

The good life goal that connects homeownership with the middle-class social status

was also visible in the 1970s. Rosen interviewed one resident who stressed social status and

its connection with money in living in Mei Foo, and more broadly in Hong Kong society: “it

takes money to live here, and this society is built on money. If you live here, your friends and

business associates will be very impressed.”145 Likewise, Cheng’s study of housing

141 Rosen, S. (1976). Mei Foo Sun Chuen: middle-class Chinese families in transition. 142 Ibid. P. 214. Besides the pleasure of free choice through the market, Rosen also discusses the articulation of affluence, security and individual choice through the market. 143 Ibid. P. 48. 144 Koo, A. C. H. (2001). “Beyond the Hong Kong Dream - Housing Experience and Social Ethos in Hong Kong.” P. 106. 145 Ibid. P. 52.

advertisements146 in the 1990s enriches our understanding of the connection between social status and homeownership, and the cultural content of such a middle-class way of living. The property developers were selling a middle-class dream of home that included “taste, style, warmth, cultural ethos and assets”.147 This dream is to embrace a set of desires of urban life –

convenience and exclusiveness.148

More than the basic requirement of having a bigger and safer shelter, living the good

life through buying a house in a large private housing estate is about a comfortable, peaceful,

and quiet environment. On one hand, one wishes to live near to the urban center or connect to

the transportation system. On the other hand, one also wishes to live in an isolated

community that excludes outsiders. It ensures the owner will enjoy privacy not only in his/her

apartment, but also within the area of the housing estate, which is self-sufficient. The

exclusiveness reflects personality, taste, and prestige, and serves as an identifier of middle-

class status. After all, this shared understanding of prestige can further sustain the increase of

housing prices. Similar to Rosen’s findings, Cheng concludes that ownership of such a “high-

class” apartment was the most prominent material evidence of one’s monetary achievement

and social status in the form of potential investment value.149

Finally, House Buying consists of a temporal mapping that connects one’s present

with the future. Koo illuminates two elements of this connection in the 1990s – “an ideal

housing path (home-ownership is a better form/ affluent way of accommodation, and private

146 Cheng, H. H. L. (2001). “Consuming a Dream: Homes in Advertisements and Imagination in Contemporary Hong Kong”. 147 Ibid. P. 31. 148 This set of desire is still evidence in the focus group interviews of this research, as we are going to discuss in Chapter 3. 149 Cheng, H. H. L. (2001). P. 224. The historical development of this good life goal will be fully elaborated in the next chapter when we discuss the historical development of house buying in Hong Kong. And the interviewees are not passively accepting these dreams in Cheng’s study.

home-ownership is the best of all)” and “a strong housing belief (everyone would have chance to experience upward housing mobility)”.150 For the former, together with the

aforementioned self-reliant social subject and housing ladder, the government constructed an

ideal cultural map of a housing path through which people could imagine their future. The

government expects the public housing tenants to achieve homeownership through the HOS

and following the steps in the “housing ladder” since the early 1980s. The Introduction of

Home Ownership Scheme clearly states this sense of moving along the ideal trajectory:

The main objectives of the scheme are, firstly to encourage better-off rental estate tenants to purchase their own flats so that their heavily subsidized accommodation can be reallocated to more needy families and secondly, to assist families in the private sector with limited incomes to become home-owners.151

The Housing Authority vision the future society in which homeownership will be the preferred form of housing: “The government’s goal is to encourage homeownership in the

community. Home ownership helps to foster social stability and a sense of belonging and to

provide personal financial security.”152 Hence, in the official discourse, when these

subsidized homeowners continue to enter the private housing market, they enjoy financial

security, and the whole society also benefits by having more home-owners securing social

stability.

The “strong housing belief” was part of the general social ethos in the 1990s.

Sociologist Thomas Wong summarizes that in the 1980s and the 1990s, even though people

150 Koo, A. C. H. (2001). Beyond the Hong Kong Dream - Housing Experience and Social Ethos in Hong Kong. P. 30. Koo’s research aims at understanding how people make sense of the discrepancy between the ideal and the actual housing path. 151 Hong Kong Housing Authority. (1984b). Annual Report, 1983-1984. Ho, D. K. L. (2000b) shows another side of the story by analyzing how the housing movement in the 1980s failed to respond to this wave of privatization and the underlying assumption of self-reliance. Next chapter will further discuss the struggle of the historical development of house buying. Ho, D. K. L. (2000b). “The Rise and Fall of Community Mobilization: The Housing Movement in Hong Kong”. 152 Hong Kong Housing Authority. (1997). Home for Hong Kong People: the Way Forward. Long Term Housing Strategy Review Consultative Document. P. ix.

in Hong Kong suffered from social inequality in the immediate present of their personal life,

they still had hope towards the social future. This hope soothed their strains. This was partly a

result of the ideology of openness and opportunities, and the aforementioned “individualistic

and generally conservative orientations (such as the ‘catch as catch can’ mentality, or ‘to each

according to his contribution’)”.153 On top of this ideology, Thomas Wong adds a temporal

dimension of hope through using the parable of the “tunnel effect” – hope towards one’s

future emerges from observing other people’s advancement, which I call “hope in the

tunnel”. This conjures a scene in which drivers are stuck in a traffic jam inside a tunnel, but

they see cars in the neighboring lane starting to move.

Suppose that I drive through a two-lane tunnel, both lanes going in the same direction, and run into a serious traffic jam. No car moves in either lane as far as I can see (which is not very far). I am in the left lane and feel dejected. After a while the cars in the right lane begin to move. Naturally, my spirits lift considerably, for I know that the jam has been broken and that my lane’s turn to move will surely come any moment now. Even though I still sit still, I feel much better off than before because of the expectation that I shall soon be on the move.154

A sight of the future emerges from seeing “others did move”, and thus hope arises in

the drivers’ mind.155 This hope carries the effect of mitigating the envy and strains of those

who are left behind in the present by receiving information from the prosperous economic

environment. Thomas Wong attributes this tunnel effect to the spectacular economic growth

in the 1970s. In this social context, one man’s gain is not directly another man’s loss.156

Hence, those who are still stuck at the present perceive other people’s gain as a source of

153 Wong, T. W. P. (1995). “Economic Culture and Distributive Justice”. P. 387. As he said, “strain which arises from personal, class-related, circumstances and which could lead to or radical redistributive demands, exists, but its potency is mitigated by the prevailing social ideology”. 154 Hirschman, A. O. and Rothschild, M. (1973). The Changing Tolerance for Income Inequality in the Course of Economic Development. P. 546. 155 Ibid. Pp. 388 – 9. 156 Ibid. Wong’s observation about the social context of Hong Kong: “Hong Kong’s spectacular economic development in the 1960s and 1970s seemed to bring about social advancement for many without a serious opposite and downward effect on others. Prosperity and growth generated a benign external environment; inducing optimism that one’s turn to move ahead was to come soon.”

hope instead of the target of envy. They expect the opportunity to move forward to a better

future within this economic tunnel of social advancement.157 The ideal housing path is one of

these tunnels, alongside career path and entrepreneurship. But Thomas Wong warns about the possible limitations of this tunnel parable. At the early stage of economic development, like

Hong Kong from the 1970s to the 1990s, the state may find the citizens surprisingly easy to

please with the tunnel effect. But, once this tunnel effect runs out and the hope of moving

forward remains unfulfilled for a period of time, he predicts people would become furious

and turn into an enemy of the established order.158 His prediction will be examined in Chapter

5 by using the focus group data collected in 2014 and 2016.

2.5 Gloominess in Hong Kong among Young Adults

Through exploring House Buying as the cultural mechanism of hope, this research

aims to address the organic crisis in today’s Hong Kong. It argues that, contrary to the

“cautious in immediate present, optimistic towards social future” ethos which Thomas Wong

depicts in the 1990s, the generally felt pessimism across the younger generation is not so much about immediate hardship in life and absolute poverty. Rather, it’s about a discrepancy between the material experience of their life and the potential to “improve” that experience or climb social classes. Hence, what is being struggled over in today’s Hong Kong is hope, with

House Buying being one of its hegemonic mechanisms.

157 Ibid. P. 389. He cited from Hirschman and Rothschild (1973) that the tunnel effect “operates because advances of others supply information about a more benign external environment; receipt of this information provides gratification; and this gratification overcomes, or at least, suspends, envy .... As long as the tunnel effect lasts, everybody feels better off, both those who become richer and those who have not.” 158 Ibid. And as Hirschman and Rothschild (1973) also pointed out, “As long as the effect is strong, the developing country will be relatively easy to govern. It may even exhibit a surprising aptitude for democratic forms, which, alas, is likely to be ephemeral; for, after a while the tunnel effect will decay and social injustice will no longer go unperceived and unresisted.” P.561.

In today’s Hong Kong, young adults are gloomy about their personal future. A news report from the BBC finds that young adults, aged 18 – 29 years old, are the least likely group to agree with the statement – “life is really worth living”.159 A recent report on inequality

reveals a discrepancy between present material well-being and subjective happiness. Hong

Kong is an affluent society and ranks no. 8 on GDP per capita. People in general enjoy a

relatively convenient and comfortable living standard. But Hong Kong ranks only no. 71 on the ranking of happiness. The gap between these two rankings is the widest among the top 20 countries by GDP per capita, far exceeding other countries with a similar gap like Qatar and

Kuwait.160

In the realm of life planning, young adults are frustrated about their personal future,

mostly in terms of practical expectations of career prospects and housing. One interviewee

from the BBC news report further commented on his observation about these two areas of life

planning in Hong Kong, “The atmosphere of society doesn’t really lend itself to a future for

young people. …they don’t know what will happen… – including in their own careers, and

whether they can afford housing.”161 A leader of the Umbrella Movement,162 Joshua Wong,

discusses similar factors behind this social movement in 2014. “Job prospects are depressing;

rents and real estate are beyond most young people’s means.”163 Wong believes that this

159 Cheung, H. (April 29th, 2017). “Have Hong Kong’s youth lost hope in the future?” 160 These two countries rank no. 1 and no. 4 on GDP per capita, and happiness rank at no. 35 and no. 39 subsequently. Barr, C. (April 26th, 2017). “Inequality index: where are the world’s most unequal countries?” 161 The discontent is not only about the economic environment. Over 80% of the interviewees in the survey are unhappy with the political system. This political discontent is also the theme of Umbrella Movement in 2014. Young people hence treated leaving Hong Kong as a way-out. In the survey, among people aged 18 – 29, 60% of them want to emigrate. Cheung, H. (April 29th, 2017). 162 Umbrella Movement in 2014 was the largest social movement in Hong Kong since the 1967 riot, but ended without achieving any closer to the goal of the election of the Chief Executive through universal suffrage. Hong Kong people has asked for the universal suffrage of the Chief Executive since the drafting of the Basic Law in the 1980s and 1990s. This 30-year struggle was detained by the Chinese Central Government in the August of 2014. The Central Government issued a restriction over the election through having a pre-screening of the Chief Executive candidates. This triggered the Umbrella Movement, a sit-in protest lasted for three months since the September of 2014. 163 Wong, J. C. F. (October 30th, 2014). “Taking Back Hong Kong’s Future”.

bleak economic situation was part of the frustration underlining the movement. In another survey of the happiness index that compares Hong Kong with two other Asian cities (Seoul and Osaka), Hong Kong people were found to be the unhappiest ones. Housing is the most unsatisfying area named in the index of quality of life, lower than other components such as politics and society, and environment.164

The bleak economic situation of work and housing is not unique to young people in

Hong Kong. Job insecurity and flexible employment are common characteristics of flexible capitalism and the proliferation of precarious labor in the global context.165 Long term life planning, which was previously based on a stable career path and bureaucratic system, now has been challenged.166 Unstable income from precarious labor and flexible employment practices influence housing and its unaffordability for the younger generation. Housing unaffordability has happened in other developed societies when the costs of independent living, such as rent and first deposit, have become too high for most young adults. For

164 Wong, S. W. (2016). “CityU’s Happiness Index for Hong Kong, Japan and South Korea” (January 25th, 2016) 165 Kalleberg (2009) has provided an overview of this discussion of precarious labor. Other examples include Ross (2009) and Standing (2011). Standing uses the term, “The Precariat” to describe a new class of people who works without job security in intermittent employment or underemployment. For the discussion of Hong Kong, see Tam (2005) and Chiu, So & Tam (2008). Chiu and Lui (2004) has discussed the larger social background of deindustrialization in Hong Kong since the 1990s, and how deindustrialization leads to social polarization in occupational and income structure in the local context. Kalleberg, A. L. (2009). Precarious work, insecure workers: Employment relations in transition; Ross, A. (2009). Nice work if you can get it: Life and Labor in Precarious Times; Standing, G. (2011). The Precariat: The New Dangerous Class; Tam, M. Y. K. (2005). “Job Security and Flexible Employment”; Chiu, S. W. K., So, A. Y. and Tam, M. Y. M. (2008). “Flexible Employment in Hong Kong: Trends and Patterns in Comparative Perspective”; Chiu, S. W. K. & Lui, T. K. (2004). “Global city, Dual city? Globalization and Social Polarization in Hong Kong since the 1990s”. 166 Richard Sennett (2000; 2006) has discussed the cultural influence of flexible employment which corrodes people’s long-term values, like commitment and craftsmanship. Sennett, R. (2006). The Culture of New Capitalism.

instance, the young adults (aged around 20 to early 30) in the US167 and UK168 today are more likely to live with their parents than in the 2000s. In Japan, the group of young adults that live with their parents beyond their early 30s are called “Parasite singles”. The total population of these singles is estimated to be around 4.5 million.169 Hong Kong shares a similar phenomenon. In 2016, young adults (aged 25 – 34) are more likely to live with their parents when compared to 2006 with an increase varying from 6% to 9%.170 In this age group, around 40% of female and 60% of male are living with their parents.

The gloominess of young adults in Hong Kong has a peculiar relation to two aspects of economic life in Hong Kong – the real estate-centric regime of accumulation, and people’s strong attachment to property ownership as the future life goal. Hong Kong has been ranked as “the freest economy in the world” since 1995 for the 23rd consecutive years.171 But, underneath the seemingly non-interference economic policy and low direct taxation,172 the government influences the economy through careful management of land supply and urban planning. The government stated that their objective in land policy is to safeguard “public revenue through the policy of not selling land cheap”.173 This policy, unofficially called as

167 Statistics from the US Census Bureau shows that in the age group of 18 to 34 years old, around 30% (24 million) are living in the home of their parents in 2015. It has increased for 8% when comparing to 2005. Vespa, J. (April 2017) “The Changing Economics and Demographics of Young Adulthood: 1975–2016”. 168 In the UK, 25% of the young adults (aged 20 – 34) are living in their parents’ home in 2015, and it has increased 5% since 2008. Office for National Statistics (February 22th, 2016). “Why are more young people living with their parents?” 169 In Japan, 4.5 million adults (aged 35 – 54 years old) are unemployed, unmarried and live in their parents’ homes. England, C. (April 20th 2017). “Japan: More than four million middle-aged ‘parasite singles’ still live with their elderly parents”. 170 And over 95% of people who are under 24 years-old are living with their parents. Census and Statistics Department, HKSAR. (2017). Living Arrangement and Household Characteristics. 171 Heritage Foundation. (2017). “2017 Index of Economic Freedom Report”. 172 The tax system is simple and taxes are low when compared to the US. Only three direct taxes are imposed: 1. Profits tax is capped at 16.5%; 2. Salaries tax is a maximum of 15%; 3. Property tax is 15%. And following taxes are not imposed: no sales tax, withholding tax, capital gains tax, tax on dividends, and estate tax. See InvestHK, HKSAR. (2018). “Low, Simple and Competitive Tax System”. 173 Latter, T. (2007). Hands on or Hands off?: the nature and process of economic policy in Hong Kong. P. 61.

the “high land price policy”, is the foundation for the real estate centered model of the

finance-led regime of accumulation.174 Between 1985 – 2012, over 600 hectares of land were

sold through public auction and tender, and generated a total premium of over HK$400

billion.175 In 2014-15 and 2015-16, land-related income contributed 31.9% and 27.4% to the government revenue respectively.176 These figures do not include the profit from taxes on real estate conglomerates, which will bring the total up to 45%.177 Business in Hong Kong is also

real-estate-inclined. 40 – 50% of capitalization on the stock market in the early 2000s is from

real estate conglomerates. And this field of property development is highly monopolized. The

five largest conglomerates have occupied 70% of the market share in private housing.178

During the last two decades of this economic development system, the difference in

the speed of wealth accumulation between property owners and non-owners in Hong Kong is

drastic. Between 2003 and 2017, housing prices have risen more than 460%,179 while the

median monthly employment earnings have increased only around 50%.180 Non-owners are

facing a more difficult situation to enter the housing market than previous eras and other

cities. Hong Kong has the least affordable private housing in the world since 2010, and the

situation has worsened.181 Despite this, Hong Kong’s cultural values are still dominated by

174 Haila, A. (2000). “Real Estate in Global Cities: Singapore and Hong Kong as Property States”. 175 Lands Department, HKSAR. (2012). “Fact Sheet of Lands Department”. P. 5. 176 Research Office, Legislative Council Secretariat. (7 December, 2015). “Fact Sheet: Major sources of government revenue”. 177 According to the estimation from a local think tank, Civic Exchange, “no less than 45 per cent of government revenue comes from land, including land premiums, property rates and taxes on property developers’ handsome profits.” Pilling, D. (9 March, 2011). “Hong Kong’s land system that time forgot”. 178 Smart, A. and Lee, J. (2003b). P. 159. 179 See Figure 2.1 for the overall trend in the housing market. 180 See Figure 2.2 for more details. The median monthly earnings have increased from $10,000 to $15,000 per month from 2001 to 2016. In the same period, the rise of the median monthly employment earnings among young people aged 20 – 29 is around 30% increase, which is lower than average. 181 See Footnote 1 in Chapter 1 for more details. Demographia (2018). “14th Annual Demographia International Housing Affordability Survey”.

property ownership as the most desirable life goal to be achieved. In several recent surveys of life goals among Hong Kong people, private property ownership continues at the top of the list.182

The housing choice for the young adults are very limited in this context.

Homeownership, private rental housing and public rental housing are not viable choice to them. Homeownership is clearly unaffordable. The average price for one sq. ft. is more than

HK$13,000 in 2018. Thus, the housing price for a 300-sq. ft. apartment is HK$3,900,000

(USD$500,000), and the down payment can be around HK$1,600,000 (USD$200,000). One also has to pay around HK$10,000 as monthly installment, yet in 2017, the median monthly wage in the age group of 25 – 34 years old was HK$17,600.183 And usually an individual has to earn more than HK$22,000 to secure a mortgage loan from the bank. The average cost of private renting is high as well. The rent of a 450-sq. ft. flat was HK$15,900 per month in

2017. Those at the city center were even higher. Renting a 200-sq. ft. studio could cost

HK$16,000 per month.184 Meanwhile, the income ceiling to apply for public rental housing for an individual is HK$11,540. In this way, a capable young adult who earns the average income cannot enter into public housing – the entry of the housing ladder. One cannot fit into

182 The age group and the outcome varied in different surveys depending on how they asked the question, but in general, not only the young adults, but all Hong Kong people value house buying to be their top life goal. In 2010, people aged 16 – 35 years see “buying apartment or improving living condition” to be the top life goal to be achieved in 10 years (57.1%). (Bauhinia Foundation Research Centre, 2010) In HKUPOP (2013), 34% of respondents from 16 – 33 years old value buying their own home as the dream they most want to achieve. Similar findings are there in a series of survey in HKUPOP (2014) and HKUPOP (2015). The life goal that one most want to realize is house buying (18.2% and 19% respectively) in all age groups. The rate is higher among people aged 18 – 29 in 2014. 25.3% of them pursued after house buying, while 15.5% wanted to further study and 11% dreamed of traveling around the world. Another question reveals similar belief. When being asked how they may spend the money from a lottery, buying property (41.4%) tops the list in all age groups from 18 – 65 in HKUPOP (2009). Forrest and Yip (February 6th 2015) also found in their survey that 80% of the young people in Hong Kong view ‘owning property is an essential symbol of being middle class’. Forrest, R. & Yip, N. M. (February 6th 2015). “What young people really think about housing in Hong Kong”. 183 Census and Statistics Department, HKSAR. (2017). Wages and Labour Earnings. 184 SCMP. (10 Oct 2017). “Looking for a flat for under HK$10,000 per month on Hong Kong Island or Kowloon? No chance, says agency”

any one of the above choices, and can only choose between living in a tiny sub-divided unit

(around 100 – 150 sq. ft.) in old buildings, living with parents, or living with partner(s) who can share the renting cost.

Figure 2.1 Price Indices for Selected Popular Developments (1992 - 2017)

Source: Rating and Valuation Department, HKSAR. (2018). Property Market Statistics.

Figure 2.2 Median Monthly Employment Earnings of Employed Persons (2001 – 2016)

Source: Census and Statistics Department, HKSAR. (2018). Employment Earnings.

Figure 2.3 Domestic Households by type of Housing (2015).

Source: Census and Statistics Department, HKSAR. (2016). 2014/15 Household Expenditure Survey.

The combination of job insecurity and unaffordable housing in an economic system

that is real-estate-centric and social values that put great emphasis on property ownership,

make young adults’ gloominess understandable on the surface.185 But this explanation needs to be pursued further. How has homeownership been articulated as the taken-for-granted desirable life goal in people’s life planning? How do young adults connect with the future if they believe that this life goal is desirable yet unachievable? In this research, these questions are explored with the concept of the cultural mechanism of hope in House Buying. The aforementioned phenomenon of a strong desire towards property ownership and a general

185 This picture is further confirmed in the focus group data in Chapter 5 Section 5.2 and 5.3.

sense of gloominess among young adults is part of the struggle over this hope mechanism in recent years.

This research is going to answer three sets of questions by relying on literature and historical reviews,186 and focus group interviews with young adults.187 The three sets of

questions are: first, why and how does property ownership occupy such a prominent position

as people’s life goal in Hong Kong? How has this articulation formed historically? Second,

how has the social context changed in recent years? How has these changes affect the

housing ladder and the social plane? Third, how do young adults imagine and articulate their

pathways to break through and resolve this crisis of gloominess they face? How do they

imagine the connection and/or disconnection between their present condition and the future

possibilities? Chapter 3 explores the first set of questions concerning the historical formation

of this hope mechanism from the 1970s to the 1990s and the process when different elements

of House Buying happened to join force in this period. Chapter 4 considers the contextual

changes since the East Asian Financial Crisis in 1998, the collapse of the housing ladder and

the narrowing of the objective opportunity structure in the Hong Kong society even when the

economy has been recovering since 2004. Chapter 5 discusses how House Buying as a hope

mechanism changes with a new discourse of “waiting for the coming crisis” across the young adults this research interviewed.

186 This consists of a review of ethnographic researches, banking pamphlets, short stories, and documentaries mainly in the 1950s to 2010s. Chapter 3 will use these materials to articulate the context behind the emergence of House Buying. 187 This research interviewed 12 groups with a total of 73 young adults who are in their 20 – 30 years old in 2014 and 2016, and asked them about their future planning. Chapter 5 will further illustrate the details of this methodology, and these data forms the backbone of the chapter.

Chapter 3 – Historical Formation and Political Effect of House Buying in Hong Kong

(1970s – 1990s)

Historicization does not mean losing sight of contingency. Quite on the contrary: it allows us to foreground contingency by investigating the conditions of existence and possibility of particular instances of hope as relational phenomena in particular historical moments.188

This chapter examines the historical formation of house buying from the 1970s to the

1990s. Studying the financialization of homeownership requires studying more than the realm

of economics. The cultural, the political and the economic elements are connected in

transient, contingent, and sticky ways; they merge together to form people's whole way of

living. Understanding House Buying as a hope mechanism weaves the cultural imagination of

the self-reliant subject through the market who makes good investment decision to achieve

homeownership, and also aspires to the middle-class good life. It also requires understanding

the social mapping of the future through the “housing ladder” on a social plane with an open

opportunity structure.

House Buying is a historically contingent construct since the 1980s. The above

elements in house buying did not emerge simultaneously and become connected right away.

Each has its own historical trajectory.189 The belief in self-reliance emerged in the early

1950s under two intersecting historical contexts: the refugee experience and limited social

welfare of Hong Kong. The belief of having real estate as a good investment emerged in the

188 Jansen, S. (2016). “For a Relational Historical Ethnography of Hope”. P. 260. 189 As Grossberg (2005) points out, the new economies have their histories. It’s not that “the present has broken with the past, that there is a radical disjuncture between yesterday and today, so that the past no longer has anything useful to teach us, at least about economy”. Grossberg, L. (2005). Caught in the Crossfire: Kids, Politics, and America's Future. P. 121.

1950s; yet homeownership had not been a popular housing choice until the early 1970s. The middle-class life style emerged in the 1970s and developed into a form of private housing estates in Hong Kong. The housing ladder that paved the way from public rental housing, to

subsidized homeownership, then to the private housing market, was fully established only in

the mid-1980s. Last but not least, the belief of open opportunities in the society had been

strong since the 1970s with widespread feelings of optimism in the social future and a

pragmatic attitude toward personal life.

The above components accidentally joined forces in the 1980s under the colonial

policy of limited and development-centered social welfare,190 the financialization of housing

through the relaxation of mortgage requirements, and the political uncertainty before the

1997 handover. In this context, the formation of house buying carried a political dimension.

The emergence of House Buying reinforced the depoliticization of the population from the

1970s to the 1990s, which was characterized by reframing political problems of colonialism

and capitalism into “governmental responsiveness and administrative efﬁciency”,191 and the

individualization and self-governing effect of minding one's own economic business and

leaving the political issues in the hands of the colonial government.

The following sections aim at outlining the above related elements in the historical

formation of House Buying. I divide the history of House Buying in Hong Kong roughly into two periods – the Formative Period (from the early 1970s to the late 1990s), and the

Struggled Period (from 1997 to the 2010s). In this chapter I will focus on the Formative

Period of house buying, and the next chapter will focus on the Struggled Period. Two

historical moments split these periods – the 1966 and 1967 Riots in colonial Hong Kong, and

190 Holliday, I. (2000). “Productivist Welfare Capitalism: Social Policy in East Asia”. 191 Mathews, Lui and Ma. (2007). Hong Kong, China: Learning to Belong to a Nation. P. 34.

the handover of Hong Kong to China in 1997. The separation between these periods are not

absolute and clear cut. Between these periods, there were times when the future direction of

the Hong Kong society was uncertain and undetermined.

The time between 1967 and 1973 was primarily characterized by activities aimed at

recovering from the 1966 and 1967 riots.192 The colonial government had just begun to

experiment with social reforms such as health care and free education, and the local

population still distrusted the government. The signing of Sino-British Joint Declaration in

1984 and the uncertain political negotiation between the British and Chinese government

over the sovereignty of Hong Kong between 1982 and 1984 were two critical moments in the

political future of Hong Kong, and were central shifts during the Formative Period. As we

shall see in the following sections, the mass consumption in homeownership began only in

the late 1970s when the colonial government began its social reform in a subsidized

homeownership program in the context of an increasingly affluent society, and house buying

was formed during this period.

The time between 1997 and 2003 was characterized by chaos, with a major economic

recession and a serious legitimacy crisis of the government of the Hong Kong Special

Administrative Region (HKSAR); these developments set the stage for the ongoing tensions

about economic opportunity and governance that continued during the current Struggled

Period. The collapse of the housing market and the subsequent total retreat in 2003 of the

HKSAR government from actively participating in the housing market through building and

selling subsidized housing. Since then, the role of the government has changed drastically

192 These two riots were important watersheds in Hong Kong history that marked the changing governmental strategy as well as the beginning of the formation of local identity.

from being the active administrator193 to the by-standing facilitator of housing in the name of the free market. At this point, housing in Hong Kong was left to in the hands of the real estate conglomerates.

3.1 The Watershed of Hong Kong – 1966 and 1967 Riots

Figure 3.1 Historical Timeline of Hong Kong before 1967

The riots in 1966 and 1967 were the watershed194 in the history of Hong Kong that marked the beginning of social and political reform. Before the riots, the colonial government had taken a hands-off approach to the local Chinese population since 1842 when Hong Kong became a British Crown Colony. The economy of the early colonial state was entrepot-based

193 Latter, T. (2007). Hands on or Hands off? the nature and process of economic policy in Hong Kong. P. 63. 194 Cheung, G. K. W. (2009). Hong Kong's Watershed: The 1967 Riots.

before 1950s and was light-industrial after 1950s. The colonial administration and foreign

merchants dominated political power.195 Under the policy of indirect rule, the local population

was left to be self-governed by the Chinese merchants, who formed charitable organizations to

cater to the Chinese population's medical, welfare, and security needs. These Chinese

merchants were later incorporated (to a limited extent) into the ruling elites and the political,

economic and cultural middleman. Local sociologist Ambrose King names this system a form

of synarchy – “elite-consensual polity”, in which the colonial state and the Chinese elites jointly

governed the local Chinese population.196

The colonial state provided very limited social welfare to the local Chinese population

for a few reasons. First, the British colonial policy had a tradition of providing limited

economic subsidies to the colonies, and asking the colonial governments to be self-sufficient

and financially solvent on their own.197 Second, as an entrepot, its economy was dominated

by the merchant class who pressured the state to maintain a low-taxation system and restrain

its public spending.198 Third, the Chinese population was seen by the colonial state as merely

sojourners when the boundary between Hong Kong and China was open before the beginning

of the Cold War in the 1950s. The colonial government did not view itself as having a moral

obligation to look after the coolies who treated Hong Kong as a place of work or waves of

195 One joke summarizes vividly the dominant role of this British merchant class in this early colonial period: “Power in Hong Kong resides in the Royal Hong Kong Jockey Club; Jardine, Matheson & Co; the Hong Kong & Shanghai Banking Corporation; and the Governor – in that order.” Cited from Hughes, R. (1976). Borrowed Place Borrowed Time: Hong Kong and Its Many Faces. P. 23. 196 King, A. Y. C. (1975). “Administrative Absorption of Politics in Hong Kong: Emphasis on the Grass Roots Level”. And Law (2009) further discussed this early formation of coloniality beyond the framework of one-sided domination by the colonizers. It involved active collaboration between the colonial state and the Chinese merchants. Law, W. S. (2009). Collaborative Colonial Power. 197 Since the early period, the colonial government had already been on severe financial pressure. The British Parliament instructed Sir Pottinger, the first governor of Hong Kong, that the colony “was expected to pay its own way as soon as possible”. Nissim, R. (2012). Land Administration and Practice in Hong Kong. P. 11. 198 Chiu, S. W. K. (1994) “The Politics of Laissez-faire: Hong Kong's strategy of Industrialization in Historical Perspective”.

refugee who treated Hong Kong as a “life boat” to escape from the political turbulences in the

Mainland China from the 1930s to the 1960s, like the Second World War, the civil war and

the political movements under the rule of Communist China.199 These joined together and became the cornerstone of financial conservatism in public spending and social policy.

The 1966 and 1967 riots both exposed the social problems in post-war Hong Kong brought by the rapid industrialization of the 1950s and 60s. These problems included social inequality, poor living conditions, the lack of labor rights, and the lack of social welfare under an unresponsive colonial government. The previous colonial policy of indirect rule could no longer solve these discontents by merely securing collaboration from the Chinese merchants and elites. Nevertheless, these two riots carried different meanings in local history.

Figure 3.2 Historical Timeline of Hong Kong from the 1970s to the 1990s

199 Leung, B. K. P. (1996). Perspectives on Hong Kong Society. P. 121.

Lasting for a few days, the 1966 Riot was led by the young local-born generation to protest the increase of the ferry fare. The Official Report of the colonial government

concluded that this riot was a symptom of youth problems, housing problems, and political

miscommunication. The state aimed to correct these problems through policy measures. This also signaled the emergence of the local-born baby boomers who had a very different way of approaching life and social issues compared to their expatriate and refugee predecessors.

These local-born boomers were the first generation who treated Hong Kong as their home and they would voice their discontent. The colonial government was aware that, if not addressed with care, these discontents could possibly be articulated against the legitimacy of the colonial rule and the exploitation of capitalism.

The 1967 Riot was led by the sympathizers of the Chinese Communist Party in Hong

Kong. It started as a labor movement, and developed into a movement of nationalism to protest against “national oppression”.200 The scale was much larger than the riot in 1966, and

lasted for seven months with a series of fatal bombing incidents. This riot marked the end of

the proxy struggle between the Chinese Communist Party and Chinese Nationalist Party in

Hong Kong.201 After the 1967 riot, Hong Kong people chose to side with “the devil they

knew” – the unpopular colonial government instead of either one of these parties.202

200 Cheung, G. K. W. (2009). P. 131. 201 Chinese Communist Party established People's Republic of China in Mainland China since 1949. Chinese Nationalist Party, or the Kuomintang was the party that unified the Republic of China in 1928, but was lost in the Civil War with CCP in 1949 and then retreated to Taiwan. Both parties had supporters and sympathizers in Hong Kong in the post-war era, and at times they were in conflicts like the 1956 riot. 202 For example, Ian Scott (1989) summarized the aftermath of the riot as one with unintended consequence. The anti-colonial movement drove people towards the colonial government. “Concern about working conditions in public circles and in the press was soon dissipated by the riots, by the strikes and by the results of indiscriminate bombing. Ironically, in the light of communist objectives, the end-result of the disturbances was to increase the support for, and the legitimacy of, the existing order. Faced with a choice between communism of the Cultural Revolution variety and the, as yet, unreformed colonial capitalist state, most people chose to side with the devil they knew.” Scott, I. (1989) Political Change and the Crisis of Legitimacy in Hong Kong. P. 104.

The 1967 riot also raised the curtain for the subsequent government’s social reform in the 1970s on issues including free primary education, improved health care services, labor reform, the establishment of an anti-corruption bureau (ICAC), and the Ten Year Housing

Program. The colonial state changed its previous hands-off approach to the local population, and carried out reforms in the early 1970s to build its political legitimacy and establish civic pride203 in the local population. The objective of social reform, besides pacifying social discontent, was to prepare for the future negotiation with the People's Republic of China

(PRC) over the dispute about the end of the 99-year lease of New Territories – the northern part of Hong Kong where Qing Dynasty leased to the British in 1898.204

The previous opposition from the business community and the government to increase public spending now was eased after witnessing the disturbance of the two riots. The “elite- consensual polity” of the colonial state also modified itself to extend its network of consultation – “administrative absorption of politics” – to the representatives from the

203 The then-Governor Sir MacLehose contextuarlized the state/society relation as making an active confidence local population in 1972. “One feature that strikes me as salient is that though Hong Kong is the home of over 4 million who have to a greater or lesser extent rejected China, a large proportion have not fully accepted Hong Kong. A new generation is growing up – 55% of our population is under 25 – and is demanding more from Government, often rightly. Like any other government this one must govern by consent and must do so without the aid of the electoral system. If that consent is to be retained, not only must legitimate demands be satisfied, but the population must be convinced that such satisfaction is genuinely the objective of Government. The need is not only for administrative action producing physical results; there is also a need to secure the active confidence of the population. We cannot aim at national loyalty, but civic pride might be a useful substitute. “This can be achieved only by corporate effort, and such a concept is new to Hong Kong where the tradition has been for people to do only more or less what they are told by Government and otherwise … to be as little bothered with corporate affairs as possible. I think that from now policy must aim to make both the elite and the masses feel, as they felt in 1967, that Hong Kong is an entity to which they belong, and the place they wish to live in.” As cited in Smart, A. & Lui, T. L. (2009). “Learning from civil unrest: State/society relations in Hong Kong before and after the 1967 disturbances”. P. 157. 204 From “The Guidelines for the Governor Designate, Hong Kong” (1971). “We must work out policies in Hong Kong consciously designed to prolong confidence and so gain all possible time for conditions to emerge in China in which a favorable negotiation would be possible. Conversely we must avoid actions and administrative procedures in Hong Kong which tend to highlight the diminishing term of the Lease.” As cited in Smart, A. & Lui, T. L. (2009). Pp. 155 – 156.

grassroots as well.205 Though this by and large remained a gesture, the colonial state set up offices across different districts of Hong Kong to collect people's opinions and complains in the hope of lessening its tension with the local population. This kind of public consultation through the administrative system signaled the government’s willingness to resolve political miscommunication with the public.206

The transient refugee mentality began to fade away in the mid-1970s when the first

local born baby-boomers grew up and emerged as the new generation of the society. This

generation took root in the colonial city and developed a sense of local identity. They were

different from the previous generation because they would fight for social rights and welfare,

yet they also inherited the utilitarian, practical mentality that is grounded in material

calculation.

3.2 Three Steps of “Housing Ladder” in Hong Kong

This section outlines the colonial government’s housing policy in constructing the

housing ladder since the 1970s. “Housing ladder” is a unique housing path in Hong Kong that

consisted of three hierarchically-ordered steps: public rental housing, subsidized

homeownership, and private homeownership. The lower-class people can enter this housing

path through applying for public rental housing. Public rental housing aims at

accommodating two types of people: to compensate the tenants in the squatter areas who

were affected by the government's project of slum clearances from the 1950s to the 1990s,

and to be the safety net for the poorest households who are living in poor conditioned private

205 King, A. Y. C. (1975). “Administrative Absorption of Politics in Hong Kong: Emphasis on the Grass Roots Level”. 206 One example is the city-district officer scheme, which the colonial government sent a civil servant to each district to consult the opinions from the local population. At that time the city-district officers understood their role to be not “only the ‘eyes and ears of the government’ but also the ‘tongues of the people’.” King, A. Y. C. (1975). P. 436.

rental housing. Means test is imposed only on the latter group, and the income and asset limits have been strict throughout the history of public housing with family and age bias, which favor the family and elderly one-person applicants.207

The reforms in social policy during the 1970s provided social welfare to serve

economic development. Underneath its benevolent outlook and concern over the “happiness”

of the local population,208 the social reform was a response to changing political

configurations, modes of economy, and social formations in Hong Kong during the 1960s

and 1970s. After the Second World War, the economy of Hong Kong had begun to transform

from entrepot to light industry, yet the colonial government was still allied with the

commercial capitalists (the merchants) and financial capitalists (the bankers, in particular from HSBC).209 This collusion, along with the obligation of maintaining a balanced budget to

avoid interference from the Colonial Office in the UK,210 contributed to the relatively laissez- faire industrial policy and non-interventionist social policy in the 1950s and 1960s.

But the emergence of the Chinese industrial capitalists in the late 1960s asserted their influence on the colonial government and began to affect industrial policy with a more state-

interventionist approach.211 In the 1970s, under the neologism of “positive non-

interventionism”,212 a series of economic and political considerations were implemented

207 Hong Kong Housing Authority (2018). “Number of Applications and Average Waiting Time for Public Rental Housing”. 208 For instance, in the policy address of 197s, the then-Governor Sir MacLehose addressed the housing problem in Hong Kong as “one of the major and most constant sources of friction and unhappiness between the government and the population”. Policy Address. (197s). 209 Chiu observed that in 1951, among the unofficial members of the Executive and Legislative councils, almost all of them were businessmen from the commercial and financial sectors, and none of them was industrial capitalist. Chiu, S. W. K. (1994). 210 Goodstadt, L. (2010). “Fiscal Freedom and the Making of Hong Kong's Capitalist Society”. 211 Leung, B. K. P. (1996). P. 117 – 118. 212 The then-Financial Secretary Sir Philip Haddon-Cave referred this new way of social policy as “positive non-interventionist”. To distinguish from laissez-faire, he concluded that the government do have an active role when facing critical moments: “Attempts to frustrate the operation of market forces will tend to damage the growth rate of the economy, particularly as it is so difficult to predict, let alone control, market forces 65

about when and how the government should intervene. Social welfare213 was on the list of considerations, yet often subordinated to other “more important” issues, like securing the

legitimacy of the colonial state with its proximity to Communist China,214 maintaining a low

tax rate system to ensure the development of the economy, limiting public spending, and

building up the government reserve to stabilize the financial system in case of a banking

crisis.215 Public housing policy, besides building state legitimacy and consolidating the

population,216 had also been providing a social wage that subsidized the laborers and lowered

the production cost of industrial development since the early 1950s. Because of this, it was

selected to further expand in the 1970s over other possible social policy goals like elderly

care, retirement planning, and labor rights.

In 1972, the colonial state announced a large-scale, ten-year public housing project

with a humanistic caring tone toward the local population,

It is my conclusion that the inadequacy and scarcity of housing and all that this implies, and the harsh situations that result from it is one of the major and most constant sources of friction and unhappiness between the government and the population. It offends alike our humanity, our civic pride and our political good sense.217

The target of the Ten Year Housing Programme was to house 1.8 million people in

housing estates. The land in the urban areas was not sufficient for such a large public housing

project and this pushed the government to open up the previously undeveloped areas – the

that impinge on an open economy. But ... the government must play an active role in the provision of those services and facilities essential to life in a civilized community.” Hong Kong Hansard. (1977-8). P. 813. 213 Sociologist Ian Holliday termed this as “productivist welfare regime”. He suggested that the East Asian has a unique welfare system that stresses economy development, with subtle variations in each local context. Holliday, I. (2000). 214 Smart, A. (2006). 215 Goodstadt, L. F. (2010). 216 Lui, T. L. (1988). “Home in Hong Kong”. 217 Policy Address. (1972).

New Territories at the north near to the boundary with Mainland China. The plan was to

develop several self-sufficient new towns in these areas, which included private and public

housing, industrial areas, shopping malls, and recreational and communal facilities.

The final step of the housing ladder – private homeownership market is for the upper-

middle class and it is a monopolized market in the hands of five major property developers

since the late 1970s. These developers occupying 70 percent of the market share in private

housing. The private homeownership market had been through cycles of ups and downs since

1960s. Three property bubbles emerged and burst: 1967 – 1972, 1976 – 1981, and 1986 –

1997. The price index can trace only the last property bubble, which happened in the 1980s to

the 1990s, yet the approximate increase of the private housing price was 1 to 2 times from

1967 – 1972, 3 times from 1976 to 1981, and 8 times from 1986 – 1997.218

Figure 3.3 Private Domestic (1980 – 2003) Price Indices for Selected Popular Developments.

Source: Rating and Valuation Department, HKSAR. (2018). Property Market Statistics.

218 Fung, B. Y. (2001). A Century of Hong Kong Real Estate Development. (in Chinese.) P. 115.

Hong Kong's land policy originated from the colonial system of the British Empire and is still practiced nowadays, and hence the supply of land is still controlled by the then- colonial and now-HKSAR government. It has four characteristics. First, land ownership rights and land use rights are separated. Hong Kong was a crown colony and all land was crown lands. That means all land belonged to the current monarch of the colonial empire and now the Chinese state, and was managed by the government. Almost all land of Hong Kong is sold in leasehold with assigned terms and conditions,219 and all property owners in Hong

Kong are indeed leaseholders.

Second, Hong Kong has a low direct tax environment. The tax system is light-duty as

the tax rate is around 15%, is simple, with only three kinds of direct tax: salaries tax, property

tax and profits tax. Besides having no sales tax and withholding tax, Hong Kong does not tax

on capital gains, dividends, and estate.220 The then-Deputy Chief Executive of the Hong

Kong Monetary Authority in the 1980s, Tony Latter wrote, “The low tax environment ... is crucial in sustaining Hong Kong's image as a business-friendly place where government interferes as little as possible in resource allocation, such as the choices between work and leisure, or spending and saving.”221 In this system, real estate investment is encouraged since the profits from property market and the inheritance of properties are not taxed.

Third, underneath the seemingly non-interference economic policy and low-rate tax

system is the careful management of land supply and urban planning by the government to

secure its finance through land revenue. Latter adds, “However, the system is not entirely free

219 The tenure term of the leasehold is now usually 50 years. 220 It only taxes on those that are gained from the activities in Hong Kong. The rate of salaries tax is progressive: 2% on the first $40,000, 4% on the next $40,000, 12% on another $40,000, and 17% on the remains. The rate of property tax is 15% on the revenue from letting. The profits tax is 15% for individuals and 16.5% for corporations. 221 Latter, T. (2007). P. 61.

of allocative distortions. The principal one occurs in the realm of land and housing.”222 Since

the early period, the colonial government had already been under severe financial pressure in

maintaining economic independence.223 The major source of government revenue is from

selling land and charging tax through stamp duties. Land revenue had accounted for one third

to almost half of the government income since 1881.224 The then-colonial state and the now

SAR government has occupied a dual and contradictory role as the landowner, and the

administrator of the well beings of local population. As the sole landowner, the government

has a role in maintaining the land price to safeguard “public revenue through the policy of not

selling land cheap”.225 But it also has the responsibility to ensure sufficient land supply and

well-planned land use for the common good of the whole local population. These two roles

create a dilemma between maintaining high land price and providing affordable housing to

the population.

Fourth, land supply is also limited by the legal system in Hong Kong. The population in Hong Kong is 7 million. It has 1,100 square kilometers of land but less than 25% of it is urbanized or developed. Almost half of the land in Hong Kong is Country Park or for similar

use under the Country Parks Ordinance (1976). The Ordinance aims at nature conservation,

and countryside recreation and education. These lands were prohibited from development.

Land reclamation is the major way in increasing urban land use, as approximately 30%226 of

the urban area are made from this method. Yet it was further restricted by legislation in 1997

222 Ibid. 223 The British Parliament instructed Pottinger, the first governor of Hong Kong, that Hong Kong “was expected to pay its own way as soon as possible”. Nissim, R. (2012). P. 11. 224 Fung, B. Y. (2001). P. 25. 225 Latter, T. (2007). P. 61. 226 Vivian Ngo from USC Geospatial Science Institute has created an interesting interactive map to showcase the history of development in land reclamation from 1842 - 2010. http://www-scf.usc.edu/~ngov/Map.html

under The Protection of the Harbour Ordinance, which aims at protecting and conserving the

Victoria Harbour as a public asset.

Under this land tenure system, the land and housing price has a tendency to go up

because of the limited and controlled supply of land, and the incentive of the state policy in

maintaining the “high land price”. Real estate has also been a popular investment choice for

the relatively well-off segment of the population.227 In the 1950s and 60s, anthropologist

Topley observed that “real estate, particularly blocks of flats, was a popular form of

investment for Chinese”.228 Yet owner-occupancy as a housing choice was not popular: “the demand for housing does not usually come as high on the list of preference goods of the

Chinese as on that of the westerner”, for their “social life is carried on largely in restaurants”.229 This continued to be so in the 1970s as shown again in the case of the first

large-scale private housing estate – Mei Foo Sun Chuen. At that time, Sherry Rosen found

that “flats in Mei Foo Sun Chuen are currently considered excellent investments”, and “as of

the end of 1973, 30% of all purchasers were investors with no intention to live in the flats

they had purchased”.230

The middle step of the housing ladder – Subsidized Home Ownership Scheme (HOS)

was designed by the colonial government in the late 1970s to fill the gap between the affordability of tenants in the public rental housing, and the soaring housing price in the

227 As early as in the 1870s to 1930s, the riches in Hong Kong had already treated real estate as good investment. “Although the colonial authority had reserved the most valuable land on the island for European merchants, the granting of the right to Chinese to buy and sell land properties nonetheless helped create a new class of native landlords, who, like their European counterparts, came to amass substantial fortunes from their investments under the 'high land price system.” Chu, C. L. (2012). Speculative Modern: Urban Forms and the Politics of Property in Colonial Hong Kong. P. 37. 228 Topley, M. (1969). “The Role of Savings and Wealth among Hong Kong Chinese”. P. 196. 229 Ibid. P. 195. 230 Rosen, S. (1976). Mei Foo Sun Chuen: middle-class Chinese families in transition. P. 48.

private housing market. For instance, in the Policy Address of 1981, the reason behind the practice of HOS was that

…the sharp rise in land and property prices, in addition to interest rates, has greatly aggravated the effects of housing shortage. Housing otherwise available has become beyond the means of those who need it, and the proportion of family incomes spent on rents or mortgages has been grossly inflated. This is perhaps the greatest single cause of unhappiness and worry in Hong Kong at this time.231

In this scheme, the government took the role of building and selling apartments to the

local population at a price that was usually lower than the market level (usually 30% - 40%

discount). The eligible applicants included the public housing tenants and middle-to-low

income families who could not afford homeownership in the private market. Since this

scheme was very popular, the applicants were selected through a lottery. And the public

housing tenants could give up the public housing units they are living in exchange for a

higher chance in the lottery.

The construction of this housing ladder, as we shall see very soon, was characterized

by the official discourse of self-reliance, and an upward mobile experience of the local-born

generation in the 1970s. This serves as the backbone for people to imagine their temporal

mapping of the future to an “upward” direction if they enter the first step – the public rental

housing.

3.3 Self-reliance in the Official Discourse

Underneath the above housing ladder was an official discourse of self-reliance. Public

rental housing is the safety net for the poor and incapable, and subsidized homeownership

was the helping hand from the colonial state to lift the capable public housing tenants and the

lower-middle class in achieving the final step of private homeownership. Yet the local

231 Policy Address. (1981).

population should mostly rely on themselves to achieve this upward mobility in social ladder and housing path.

The discourse of self-reliance was built upon the refugee mentality232 in the post-war era. Since the late 1940s, the practice of not relying on social welfare and surviving through their own means had been strong in Hong Kong across the refugees from the Mainland. This practice was built on the background of limited social welfare and hands-off approach from the colonial state.233 Throughout the 1950s, the majority of the population still lived in poor housing conditions despite the government's public resettlement projects. Almost half of the population (47.1%) lived in “cubicles inside private tenement flats”, 11.9% lived in “rented bedspaces or on verandahs” and 21% lived in “temporary structures, including rooftop huts and squatters’ makeshift dwellings”.234 But the pain and insecurity from social downward mobility and poor living conditions were outweighed by the greater fear of the Chinese

Communist Party, the economic hardship, and the political turbulence that they had gone through during these political changes when living in Mainland China. 235 Living in Hong

Kong, they were preoccupied with surviving the present with their families and kept

232 Mathews, Lui and Ma (2007) summarized four aspects of the “refugee mentality”. 1, “a conscious attempt to stay away from political tensions created by rivalry between the communist and nationalist regimes; 2, “an acceptance of the status quo in colonial Hong Kong”; 3, “a survival instinct”; 4, “a sense of transience and rootlessness”. Mathews, Lui and Ma. (2007). P. 28. 233 We can already see this type of discourse of self-reliance in a popular fictional character – Broker Laai in the 1940s to the 1950s right after the WWII. Broker Laai's narrative was secular with a materialistic and philistine tone. In Laai's own words, his objective of writing was all about money. “Money comes first above all other issues. Like being a broker, I work only for commission. And I discover a law - money is the origin of aspiration and persistence. It's like my friend's English motto, ‘no money no talk’.” (Pp. 89 – 90). Another example was his statement about living in Hong Kong. To him, Hong Kong was a place where “one's father and the communists are both untrustworthy”. (Pp. 44 – 45). Gao, X. (1947). Cited from Hung (eds.) (2011). 234 Cited from Mathews, Lui and Ma. (2007). P. 23. They drew the statistics from the census in 1961. 235 In Lee's (1999) research of housing trajectories of Hong Kong people, one of his interviewees recalled his father's saying in the post-war period, “The Communist came to strip us of everything in our village: house, land and live stocks, but here we are again! …Building your own house (squatter) is something you should be proud of”. Lee, J. (1999). Housing, Home Ownership, and Social Change in Hong Kong. P. 119.

themselves away from political issues.236 Hong Kong, after all was the “lifeboat”237 that kept one out of the political uncertainty in the Mainland.

Family as a social institution also helped to buffer the social discontent in the 1950s.

By adding to the family’s well-being and relying on the help from one's family, the potential discontent towards the colonial state was diluted. For instance, local sociologist Lau Siu-kai uses the concept utilitarianistic familism238 to describe the dominant cultural codes in the post-war Hong Kong. “The furtherance of his familial interests is the primary consideration”,239 and “among the familial interests, materialistic interests take priority over all other non-materialistic interests”.240 This thesis depicts an economic being with an apolitical attitude of a family-centered social life in the post-war Hong Kong.241

Alongside the above refugee mentality, in its social reform since 1970s, the colonial state continued to repeatedly send out the message of self-reliance to the population: “Hong

Kong is not, in the full sense, a welfare state. People are expected to stand on their own feet,

236 As Mathews, Lui and Ma (2007) summarized, “the ‘refugee mentality’ was rooted in poverty, and the struggle for daily economic survival: keeping one's head down and staying out of the way of nationalist concerns as well as of the colonial regime.” P. 29. 237 Hoadley, J. S. (1970). “Hong Kong is the Lifeboat: Notes on Political Culture and Socialization”. 238 Sociologist Lau, S. K. (1978a; 1978b; 1982) used the concept utilitarianistic familism to discuss the political stability of the colonial Hong Kong amid the wave of decolonization around the world. Lau, S. K. (1978a) “From Traditional Familism to Utilitarianistic Familism: the Metamorphosis of Familial Ethos among the Hong Kong Chinese”; Lau, S. K. (1978b) “Utilitarianistic Familism: The Basis of Political Stability in Hong Kong. Hong Kong” & Lau, S. K. (1982) Society and Politics in Hong Kong. 239 Lau, S. K. (1978a). P. 4 240 Ibid. P. 9. 241 But overemphasizing the materialistic attitude of Hong Kong people may risk overlooking and downplaying the importance of counter forces against the market and the colonial state. This may falsely construct the image of docile economic beings. For instance, Cheung (2012) proposed that many researches of Hong Kong colonial era reproduced “a distortedly simple stereotyping of Hong Kong that presumes economic development as the only subject in the making of reality whilst the whole society is a willingly submissive entity to the government.” Cheung, S. K. (2012). “Hong Kong: geopolitics and intellectual practice”. Pp. 335 – 336.

a principle which accords with their proud and independent spirit.”242 And this discourse

continued to prevail from the 1970s to the 1990s. For instance, the Hong Kong Social

Welfare Office stressed the use of Public Assistance Scheme’s role in “relieving distress and

hardship amongst individuals and families as part of a process of helping them to re-establish

their independence”,243 and “normally public assistance is needed for a limited time only,

until the recipient becomes independent again”.244 In the 1990s, social welfare was reviewed

by the state for improvement without “creating the sort of dependency culture that has

emerged in some developed industrialised societies, a phenomenon that removes the

incentive to work and undermines the productive engine of the economy”.245

Public housing was reviewed in the early 1980s under the same discourse. The colonial state insisted on the principle that “housing subsidies should be given only to those

who are really in need of them”.246 Many tenants should have become financially capable

after years of help from the colonial state, and were ready to move on to homeownership.

“Public housing tenants are heavily subsidized by the community, and many have become quite well-off after enjoying years of cheap rentals.”247 This discourse continued and was articulated with a success story in the 1990s, when the Hong Kong Housing Society248

celebrated its achievement for lifting the capable tenants and/or their children to move on to

242 Hong Kong Government. (1976). “A Review of 1975”. P.6. And as we shall see in Chapter 3, this sense of self-reliance is about not relying on the social resource from the government. Treating home ownership to be the financial way of being self-reliant emerged only since the end of the 1990s. 243 Hong Kong Social Welfare Office. (1968-1969). Annual Report. P.24. 244 Hong Kong Social Welfare Office. (1972-1973). Annual Report. P.21. 245 Hong Kong Government. (1991) “White Paper: Social Welfare into the 1990s and Beyond”. P. 14. 246 Policy Address. (1986). 247 Hong Kong Housing Authority. (1984a). P.14. 248 Hong Kong Housing Society is a non-governmental organization that helped the colonial state to put experimental housing project into practice.

the road of success as professionals, become “former” residents and withdraw from using valuable social resources.

Thus, all tenants have been given a helping hand through the Housing Society's rental policy. As a result, former estate residents have become professional people such as doctors, lawyers, accountants and bankers. By saving on rent their parents were able to afford a good education and send them to university. 249

The subsidized Home Ownership Scheme (HOS) was put into practice under the same

discourse of self-reliance. 250 The government agency of housing – the Housing Authority –

reviewed the works of HOS in the 1990s and concluded that it had a role in “facilitating

greater mobility within PRH (public rental housing) and providing more affordable rungs on

the housing ladder had been gaining momentum”.251 Subsequently, the emphasis on rational

allocation of housing resource resulted in “the increased mobility amongst well-off

households which helped to release more PRH units to other families in greater need”.252

Underlying the establishment of the housing ladder and the belief in self-reliance was

the depoliticization of the population. This happened within the context of the government

and the leaders of social movements negotiating social rights within the framework of

249 Hong Kong Housing Society. (1998). High-rise society - the first 50 years of the Hong Kong Housing Society. Pp. 66 – 67. 250 “…fulfilling a double purpose of providing new homes for those who can afford to buy them and of simultaneously making rented accommodation available for those who cannot.” Address by The Governor, Sir Murray MacLehose, at the opening session of the Legislative Council. (1st October, 1980). 251 Hong Kong Housing Authority. (2000). “Memorandum for the Housing Authority: Overview of the Housing Authority’s Progress in 1990s”. P. 7. 252 Ibid. P. 9. This was achieved through the Housing Subsidy Policy and Policy on Safeguarding Rational Allocation of Housing Resources. “The Housing Subsidy Policy, implemented since April 1987, is to ensure that housing subsidy is granted to those in genuine need. Under the policy, tenants living in PRH for 10 years or more are required to declare household income biennially. Households whose income exceed the prescribed limits are required to pay additional rent.” And “The Policy on Safeguarding Rational Allocation of Public Housing Resources has been implemented since June 1996. Under the Policy, PRH tenants with income and net assets above the prescribed ceilings will be required to pay market rent and vacate their PRH flats within one year”.

“residual social welfare”.253 This framework treats welfare as the emergency safety net

instead of a way of redistributing social resources and ironing out inequality. This framework

assumed that social welfare was only for the needy, and a proper citizen in Hong Kong was

expected by the state to be self-reliant, stand on their own feet, stop from using social

resources, and achieve homeownership in the long run. This framework was well-received by

the local population, as it was implemented alongside rapid economic growth that brought

about the emergence of the middle class, relatively open opportunity structure, improvement

of living standards, and a sense that an individual can control their own fate through the

market.254

On the one hand, the colonial state intended to nurture the “civic pride” of the local

population. Yet, it carefully avoided the issues of citizenship and public participation.255 The

state reframed social discontent among the local population – social issues like labor and

housing were not the result of the structural problem of inequality in colonialism and

capitalism. Instead, these issues were addressed as matters of political miscommunication,

and hence could be solved by improving “governmental responsiveness and administrative

efﬁciency”.256 On the other hand, the leaders of the social movement accommodated this reframing. They lacked “a new ‘frame of right’ or a ‘frame of citizenship’”257 as a framework

to advocate for narrowing social inequality. This resulted in the inability of the activists “to

mobilize the masses, especially when the population of the economically disadvantaged had

253 “Before 1997, social welfare in Hong Kong was residual in nature and acted as a safety net for the vulnerable and the unfortunate minority. It did not serve the purpose of redistributing resources.” Wong, H. (2012). “Changes in Social Policy in Hong Kong since 1997: Old Wine in New Bottles?” P. 279. 254 This experience will further be elaborated in Section 3.6 together with the belief in open opportunities. 255 Lui, T. L. (2017). “‘Flying MPs’ and political changes in a colonial setting: political reform under MacLehose's governorship of Hong Kong”. P. 95. 256 Mathews, Lui and Ma. (2007). P. 34. 257 Ibid. P. 195.

shrunk in the context of phenomenal economic growth”.258 Focusing only on social welfare

and public housing, this limited view of housing failed to concern other housing problems

like “the rights of owners in the private housing sector and the housing needs of middle-class

people”, and hence remained “sporadic, small-scale and localized”.259

Thus, the local population and the colonial state both negotiated within the discursive framework of residual social welfare while leaving the problems of social inequality and the redistribution of social resource aside. The outcome was that the colonial state took this opportunity to successfully establish its legitimacy as “an efﬁcient administration which could meet the needs of the population and provide them with an institutional framework within which the Hong Kong Chinese could improve their livelihood”.260 This resulted in

reinforcing the depoliticization of the population and provided the groundwork for the market

discourse to flourish, and “making state and government not matters of political loyalty of

any kind but of administrative efﬁciency alone”.261 Hong Kong people were happy to be left

alone to pursue career success and life goals as long as the colonial state took care of law and

order, the legal system, and the basic needs (such as public housing and health care) of the population.

3.4 From Shelter to Home – the Middle-class Good Life

From the 1970s to the 1990s, there was a transformation in ideas about housing wherein homeownership became the taken-for-granted housing choice and the final step in the housing ladder that the local population aspired to achieve. This significant shift

258 Ibid. 259 Ibid. P. 202. 260 Mathews, Lui and Ma. (2007). P. 34. 261 Ibid. P. 35.

transformed conceptions of housing from merely a shelter for dwelling in the 1960s to housing as a way to make a home in the 1990s.262 In this process, the relaxation of mortgage

terms played an important role by making homeownership more accessible to the ordinary

people and fueling demand in the private housing market. Under the process of

financialization, a house simultaneously and accidentally became both a home decorated with

the dream of being the middle-class and its lifestyle, and a good investment decision.

Homeownership as a housing decision was not prevalent in the 1960s. For instance,

69% of the local population wished to move into public rental housing instead of pursuing

owner-occupancy.263 Since the early 1980s, homeownership became a popular, ordinary

experience. Over 90% of the local population aspired to home ownership in the mid-1990s.264

With increased affluence and common access to financial capital through mortgage, the housing market was rising and the percentage of homeowners increased from 34.9% in 1986 to 52.2% in 2001. (See Figure 3.4) A gendered version of good life at that time was formulaic

– a wife, a car, a son, and a house defined the success of a man.

262 Ng, C. H. (2010). framed this journey as Hong Kong people turned from “the tiles and bricks of a shelter” into “a home sweet home”. Ng, C. H. (2010). “From 'Shelter' to 'Home' – How do we grow up?” 263 Mitchell, R. E. (1969). Family Life in Urban Hong Kong. P. 428 264 Lui, T. L. (1995). “Coping Strategies in a Booming Market: Family Wealth and Housing in Hong Kong”. P. 123.

Figure 3.4 Percentage of Households Living in Self-owned Premises (1986 – 2001).

Source: Social Indicators of Hong Kong. (2018). Percentage of domestic households living in self-owned premises among total domestic households

Alongside the proliferation of homeownership, people's desire for housing changed as

well. More than the basic requirement of having a bigger and safer shelter, now the ideal of

the good life in homeownership was about a house that is comfortable, peaceful, and quiet. It

ensures the owner will enjoy privacy not only in his/her apartment, but also within the area of

the self-sufficient housing estate. A home should also reflect the owner's personality, taste,

and prestige. On the one hand, it serves as an identifier of middle-class status. On the other

hand, a home with prestige can further sustain the increase of its price.

This was manifested in Mei Foo Sun Chuen, the first large scale private housing

estate that was developed in the late 1960s. On one hand, it represented the emergence of the

middle class with generally higher income and educational level. On the other hand, it reflected the formation of the middle-class taste, with promotions emphasizing on “well- equipped bathroom, built-in wires, television and telephone lines as well as the nearby

garden, community facilities and leisure grounds”.265 The combination of serenity, comfort,

and self-sufficiency quickly became the standard of subsequent private housing estates,

including Tai Koo Shing, Whampao Garden, and Shatin City One. In general, the middle- class lifestyle transformed “from small to big, communal to independent, and public to private”.266

This also became the shared aspiration of the good life for the whole society, as public

housing estates were developing with the same ideals. For instance, in the 1950s, the

residence of the public housing was concerned mainly with survival. The residents even

complained that having the basketball and badminton courts in the public housing estates

increased the appetite of their children after exercising, and worried about its effect on family

expenditures.267 But, in the early 1980s, public housing estates were developed by the state

based on standards similar to those of the private housing estates. Seaview, community

center, kindergarten, nurseries, sports facilities, children playgrounds, and shopping arcades

became issues that the residents were concerned about.

There came a competition of symbolic distinction between the public and the private housing estates. The private estates further raised the benchmark of amenities to distinguish themselves from the public housing estates. The private housing estates looked up to the standard of the hotel with decorated, luxurious lobbies and public corridors. These estates also included facilities like club houses, Romanesque fountains, and large gymnasiums.268

265 Ng, C. H. (2010). P. 32. 266 Cheung, S. C. H. and Ma, E. K. W. (2005). “Advertising Modernity–Home. Space and Privacy”. P. 66. 267 Ng, C. H. (2010). P. 31. 268 Ibid. P. 32.

Homeownership of a “high-class” apartment is the most prominent identifier of one's monetary achievement and social status throughout the formative period.269

Government housing policy played an important role in designing this new standard of the ideal home, “controlling individuals’ choices” and space became a state-produced

luxurious good.270 Through urban planning, the government has produced a scarcity over

space and privacy, and hence created a shared social desire for this space as a value more

than merely physical environment and basic necessity. Space can also function as an

identifier of class status – being in a small group while excluding “the mass”.

Ma On Shan, a new town in the New Territories since the late 1980s, is an example

that illustrates the rationale of urban planning. Ma On Shan is located along the Tolo

Harbour, and was one of the new towns designed by the government to house the new

middle-class families at that time. These young couples grew up in the public housing estate,

and looked forward to achieving “a good quality of living in an environment they call

home”271 because they had moved upward on the social ladder. In the government planning,

space in these newly developed areas is produced as a luxurious good that is distributed

unevenly between different types of housing. The housing of Ma On Shan was divided by 2/3 ratio: 40% belong to private estates while 60% are public rental or subsidized home ownership schemes. Most of the private estates are built near the harbor with good exterior views and an exclusive clubhouse. These estates often boast about these features in the advertisements: “more space than urban areas”, “a good view of the sea”, “have most

269 Cheng, H. H. L. (2001). “Consuming a Dream: Homes in Advertisements and Imagination in Contemporary Hong Kong”. P. 224. And in Rosen's study of Mei Foo, she interviewed one residence who stressed social status and its connection with money in living in Mei Foo, and more broadly in the Hong Kong society, “it takes money to live here, and this society is built on money. If you live here, your friends and business associates will be very impressed.” Rosen, S. (1976). P. 52. 270 Ibid. 271 Ibid.

entertainment facilities” and “convenient transportation”.272 On the contrary, public rental

and subsidized owned homes are placed at the inner areas with limited sea view. Among five public rental housing estates, only one is located on the coastal area.

3.5 Financialization of Homeownership – Homeownership as a Good Investment

Decision

Since the late 1970s, Hong Kong's economy was undergoing deindustrialization. One of the reasons behind deindustrialization was the Open Door Policy of PRC in the late 1970s.

The nearby provinces began to provide cheap labor power and hence attracted the

manufacturing sector of Hong Kong to move their factories across the border. Hong Kong's

economy was restructuring to become a global financial center. Smart and Lee frame such

economic development model as the “property-based regime of accumulation”273 through

which real estate became one of the key sources of government revenue that can both

supplement other financial markets and stimulate economic growth. Businesses in Hong

Kong were tightly connected to the conglomerates in the real estate sector as discussed in

Section 3.2.

The financialization of Hong Kong's economy and its centrality in real estate came

with the spread of a financial tool – the mortgage. In the 1950s and the 1960s, the local

population was still by and large in the era of poverty, and real estate investment was still

confined to a limited segment in the local population. The requirement of the banks for a

mortgage loan was also stringent for the public. The installment period was short and ranged

from one to three years. Mortgagees were even required by the banks to buy life insurance

272 Ibid. P. 75. 273 Smart, A. and Lee, J. (2003b).

before getting the loan.274 In 1967, Hang Seng Bank had already loosened the mortgage

requirement from a 2 year to a 7-year payment period. But the proliferation of

homeownership only began when the mortgage requirement was further loosened to a 20-

year payment period in the early 1980s.275

Mortgage loans helped households to gain access to mortgage credit and, in doing so,

further increased demand and thereby housing prices as well as their improved capability to purchase more expensive properties.276 For instance, in Lee's research of homeownership in

the 1990s, all the informants in his 30 cases had opted for mortgage in their process of home purchase, instead of solely relying on savings or family support.277 These financial reasons

were part of the cause behind the booming housing market and the popularization of

homeownership between the mid-1980s and 1997.

As we previously see from Figure 3.3, the price indices from 1986 to 1997 had

increased 8 times. During the same era, the median monthly household income, though not as

much as the housing price, had also increased around 5 times. (See Figure 3.5) Together, with

the increase in the share of total household expenditure on housing from around 20% to over

30% between 1981 and 1996, (See Figure 3.6) the local population's income level could keep

up with the booming housing market though in increasingly difficult conditions. The early

home buyers did make good fortune from the booming market, even though their decision of

house buying may not have been made out of investment considerations.

274 ATV. (2008). “A Century of Real Estate: Episode 9 – A Review of Mortgage”. (in Chinese). 275 Fung, B. Y. (2007). Pp. 311 – 317. 276 Aalbers, M. (2008). “The Financialization of Home and the Mortgage Crisis”. P. 150. 277 Lee, J. (1999). P. 141. And intra-family support remained strong. Lui and Lee continued to highlight the mobilization of family resources in turning homeownership of one family to be a collective project across family network among siblings. This family finance project very often was organized by a respectable family leader. Lui, T. L. (1995); Lee, J. (1999).

Figure 3.5 Median monthly household income indices for a family of four (1981 - 2001).

Source: Social Indicators of Hong Kong. (2018). Median monthly household income for domestic households of four.

Figure 3.6 Share of total household expenditure on housing (1981 - 2005).

Source: Social Indicators of Hong Kong. (2018). Expenditure on housing as share of total household expenditure

The relaxation of mortgage requirements and the promotion of homeownership was

not purely an economic decision. Relaxed requirements were also a political decision in the

1980s. The government's promotion of a subsided homeownership program was a decision to

respond to the growing need of the local-born middle-class in home and family making.278

The early 1980s was also the time when the negotiation between the British and the PRC

began. The property market plummeted because of people's lack of confidence in the political

future of Hong Kong. At that time, the HSBC and the China Bank aimed at stabilizing the

local population by loosening the payment period of mortgage to 20 years. The period would

then cross the presumed handover year – 1997. Later, after the signing of Sino-British Joint

Declaration in 1984, the property market was stabilized and the mortgage loan-to-value ratio

was loosened to 90%. In 1987, the payment period was further extended to 25 years.279

A financial common sense was behind this new era of investment – the belief in “little

land, many people” and the faith in the colonial state to continue to provide future urban

development. “Little land, many people” was a belief based on the law of demand and supply: housing supply could not match the rapid increase of population and its demand of sheltering. This belief and the actual experience of housing shortage had been proliferating well before Second World War. Yet the Chinese landlords were often criticized by the intellectuals as exploiting the fellow Chinese tenants from the perspective of nationalism. 280

278 See Scott, I. (1989). Pp. 14 – 15. Ng also discussed the importance of changing family formation from the 1980s to 1990s. Nuclear family became the ideal way of family formation helped boosting the housing market as well for increasing demand of housing and decreasing family size. Ng, C. H. (2010). Lui also depicted the emergence of nuclear family in the 1980s. “Unlike the young couples of the 1960s and early 1970s, who, for economic reasons and/or familial obligations, were likely to live with their parents after marriage, this is the generation whose ideal is to form their own nuclear family, instead of sharing their homes with their parents or other kind. No doubt, such demographic changes constitute a significant factor in increasing housing demand.” Lui, T. L. (1995). P. 114. 279 Fung, B. Y. (2007). Pp. 311 – 317. 280 Before 1930s, "as caricatured in many local popular writings, the rentier lord was a much-hated figure: a greedy, stingy, immoral opportunist who was always trying to squeeze money from their poor tenants." Chu, C. L. (2012). P. 40. Lu Wei-luan also edited a collection of writings by the intellectuals from the north before 85

In the 1960s and 1970s, a new way of articulation towards investment emerged. The belief of “little land, many people” was widespread across the population; yet this time it was seen as an excellent investment opportunity. The short story, “Intersection” (1972) 281 can be read as an indicator of the emergence of such belief as early as in the 1970s. I chose this novel as it is the first novel in the history of Hong Kong that depicts the frustration and aspiration of a property owner – Chunyu Bai – without moral criticism. The author Liu

Yichang is also one of the most significant writers who captured the turn to individualism in his modernist novels.

In the novel, Chunyu Bai overheard a dialogue between a few Shanghai women about investing in real estate. All of them agreed that real estate was the best type of investment in

Hong Kong. The reason was the rapid increase in population, and the shortage of housing and available land in the urban areas: “Property prices will go even higher. Hong Kong is so small and yet there are so many people. They still haven't got round to solving the basic problem of housing… The higher the prices, the more people want to buy!”282 In Chunyu

Bai's own dialogue with his friend, similar observations appeared as well,

WWII. In these writings, the rentier lord was often seen as mistreating their fellow Chinese. Lu, W. L. (1983). The Melancholy of Hong Kong: as portrayed by various writers (1925 – 1941). 281 “Intersection” was a novel written by LIU Yichang in 1972. Liu is a significant novelist in Hong Kong history and is the pioneer in Hong Kong literature through adopting the technique of “stream of consciousness”. “Intersection” inspired Hong Kong filmmaker Wong Kar-wai's movie, “In the Mood for Love” (2000). Liu's personal history can also be said as a typical example in which a refugee from Shanghai settled in Hong Kong in the 1960s, and got a stable home through his hard work in the 1970s and 1980s. “Intersection” was first serialized on newspaper in 1972, and rewrote and trimmed into a novella in 1975. The term “intersection” is the translation of Tête-bêche, which means a pair of joined but inverted stamps. Liu was inspired by this structure and adapted this into the narrative framework of “Intersection”. “Intersection” was composed of two parallel stories that were inverted yet connected. One story was about a middle-aged man who dwelled in the past. Another story was about a teenage girl who fancied about the future. They did not know each another and the two stories were by and large separate. But they were connected since both of them were flaneurs who walked on the street without purpose, and encountered briefly at the middle of their stories in a movie theatre. “Intersection” also reflected the transition from back-ward to forward looking, as we shall further discuss and elaborate in the next section. 282 Liu, Y. C. (1988). “Intersection”. Translated by Nancy Li. P. 93.

Hong Kong is just a tiny island. The space is too small, and the population is rising rapidly. The crisis of housing cannot be eliminated. 20 years ago, I went to Hong Kong from Shanghai, the crisis of housing has already been very serious. Now, although the government keeps building resettlement areas, but the crisis of housing in the urban area is more serious than the past. I have heard that very little crown land were sold in the urban areas. And many people who own private land are not willing to sell their land easily, because they see that the land price is rising. …Exactly because of this, the housing price in the urban area must keep rising.283

The shortage of housing in Hong Kong was a serious social problem. Instead of expressing their discontent, Chunyu Bai and his friend saw it as an opportunity of investment which connected with their knowledge of urban planning and the faith in colonial state. They still found that the housing problem could not be solved right away, but they believed in the colonial state's willingness to address the problem. For instance, they linked the shortage of housing with future urban planning, including new towns and a mass transportation system that could solve the problem:

“Going high-rise may not be able to solve the crisis of housing. The best solution is to build more satellite cities.”

“Transportation is another problem.”

“So Hong Kong must build underground railway.”284

Beyond the fictional world of the “Intersection”, this belief in investment had also emerged across the local population at that time as shown in the booklets published by the banks that promoted real estate investment. The earliest texts that I have collected were a series of “Pamphlet of Hong Kong Real Estate” from the Hang Seng Bank in the late 1960s.

Hang Seng Bank285 was the pioneer of the relaxed mortgage requirement in 1967. These booklets were published starting in 1969. The objective of the pamphlet was to provide a

283 This dialogue appears in a longer version of Intersection in Chinese. The above is my translation. Liu, Y. C. (2000). Intersection. Pp. 166 – 167. 284 Ibid. P. 167. 285 Hang Seng Bank was one of the major banks in Hong Kong. It was founded by local bankers and later acquired by HSBC in the mid of 1960s.

guideline to Hong Kong people for buying apartments and also to be the bridge between the

real estate enterprises and the buyers. We can take the first issue (January 1969) of this series

of handbook as an example. At the beginning, it predicted the rise of the real estate market

for the reason of demand and supply: “As long as the industrial and commercial environment

continue to thrive, the demand towards land and housing will not be stopped with the dense

population.”286

The depiction of Hong Kong's future was bright and optimistic under the urban

planning of the colonial state. And this depiction matched with Chunyu Bai's narrative. In this 21-page handbook, the major component was an introduction of one particular urban plan

– the “Underground Train” (the future Mass Transit Railway system). The editors translated an extraction from “Hong Kong Mass Transport Studies” from English to Chinese.287 They

did so to remind the property investors to consider how this could improve the transportation

system, change the urban network, and shape the scope of the urban area in the future. In

particular, the Underground Train would connect the urban area with two satellite cities –

Kwun Tong and Tsuen Wan, and would bring prosperity to the nearby areas that were

previously remote and underdeveloped.288 This early form of financial knowledge in real estate investment did not explicitly encourage the investors to take risks. They promoted real

estate investment by reinforcing the common sense of “little land, many people” under their

286 Hang Seng Bank. (January 1969). “Pamphlet of Hong Kong Real Estate”. P. 1. 287 Ibid. Pp. 2 – 4. 288 The pamphlet also introduces the basic knowledge that a homeowner needs, like the management and maintenance of the public area of a building that were divided by multiple owners. It describes housing management as an expertise. “To be modernized” become the first issue that homeowners should carefully attend. The author specified its meaning as keeping the maintenance of a building's public area so that “the value of the building can be preserved”. (P. 5) Standardizing the appliance, like the water-tap, can reduce the future maintenance cost as well. It also includes the legal knowledge, like the land system and government offices, and the formula to calculate the area of an apartment. It introduces English legal terminologies, like “old schedule lots”, “new lease or new grant lots”, “permits”, “clan land”, etc. These are all explained in plain Chinese language.

analysis of the increase in population, the development of urban area, and the improvement in

living standards.

The unquestioned assumption was the faith in the colonial state to perform the role of

the administrator faithfully, and to follow the plan in an efficient and reliable way. Thus, the

local population believed that the state would continue to improve “governmental

responsiveness and administrative efﬁciency”.289 This discourse assumes its subjects to be the

kind of investors that can understand the economics and future of Hong Kong using a

politically neutral imagination that contains no criticism of colonialism. This is not to say that

there were no political discussions in that era. Rather, they existed everywhere in the popular

discourses. The struggles between the Chinese Communist Party and the Chinese Nationalist

Party were severe before the 1967 riot and throughout the 1950s and the 1960s. The

criticisms against the colonial government and its irresponsiveness were also common place

before and throughout the 1970s. What appeared in these booklets was the depoliticized

separation of economics from the political. They treated economics as a separate domain that

operated with its own logic as long as the colonial government could bear the role of faithful

administer – developing infrastructure, safeguarding the local population's investment

opportunities, and protecting their economic well-being. These beliefs, together with the

positive experience throughout the late 1970s to early 1990s, were articulated to be a deep-

rooted ethos that the local population would “perceive housing as an investment”.290

289 Mathews, Lui and Ma. (2007). P. 34. 290 Koo summarized at the end of her research, “The positive experience shared by a ‘successful’ group, buying flats in their thirties or forties in the late 70’s, 80’s or early 90’s, made them hold more strongly to the spirit or ethos. After years of development, …the ethos – perceive housing as an investment – is strongly built up among the public.” Koo, A. C. H. (2001). “Beyond the Hong Kong Dream - Housing Experience and Social Ethos in Hong Kong.” P. 106.

3.6 Belief in Open Opportunities, Generally-felt Optimism and Hope in the Tunnel with

Undercurrents of Social Inequality

This section discusses the last component of house buying – the social plane with

open opportunity structure, the generally-felt optimism since the 1970s and its undercurrents

at the end of the 1990s. This was an era of rapid economic development that brought about

abundant opportunities of social mobility and the improvement of living standards. A liberal

promise of the Hong Kong Dream – “hard work plus a little bit of luck could bring great

success”291 – prevailed not only in one's career and business, and also in homeownership.

Yet, social inequality also widened in the 1990s.

The belief that “Hong Kong is a land of opportunity” took root in the 1970s. We can find evidence from social surveys during that period. For instance, Wong concludes from his social research findings that there was “an increasing identification with Hong Kong as a land of opportunity and for career development”.292 From 1967 to 1977, the people who opted to

stay in Hong Kong had increased from 23% to more than 50%, based on Hong Kong as the

place with better prospects for acquiring an affluent way of living, and a sense of security

based on economic success.293

The experience of living in “a land of opportunity” was an unprecedented, valuable

experience to many refugees in Hong Kong. These refugees had suffered from diasporic insecurity through a long journey from the Second World War, the Civil War, and the political movements in the Communist China from the 1930s to the 1960s. They fled to Hong

Kong and took the chance to move upward on the social ladder. This experience granted them

291 Mathews, Lui and Ma. (2007). P. 36. 292 Wong, T. W. P. (1992). “Discourses and Dilemmas: 25 Years of Subjective Indicator Studies”. P. 247. 293 Ibid.

a sense of controlling one's fate even in the potential political turbulence of the future. An

example of the articulated belief in one's personal effort, economic success and the security

these offered would be Mei Foo Sun Chuen. Mei Foo Sun Chuen represented consumer

choice and freedom. It was built upon the assumption that the general public aspired to

“choice” in the private market. For instance, anthropologist Sherry Rosen in the classic

research about the making of middle class in the 1970s summarized her interviewees’

enjoyment of the pleasure from choosing where they live:

…the flat in Mei Foo (the middle class private housing estate) is not an assigned accommodation based on waiting lists in the Housing Authority headquarters; Mei Foo was a choice made, and part of the pleasure of the new environment is the pleasure of a choice well made.294

The experience of moving upward with the material proof of a private property

granted these refugees a sense of independence through economic success:

“The security offered in the Mei Foo model lies in the freedom it permits those who attain it to take some measure of control over the rest of their lives. Many will and already have become immigrants, but none will ever again be refugees”.295

The short story, “Intersection” (1972) again gives us an elaborated example of such a

belief in open opportunity revealed as the above social surveys and ethnographic study. It is

particularly interesting as Chunyu Bai was a middle-aged man and a backward-looking

refugee who dwelled in the past and memories. He compared and evaluated everything he

saw in Hong Kong with his memories in Shanghai, Chongqing, and Southeast Asia. In his

gloomy monologue, only two events were aspiring enough to pause his backward-looking

narrative: envy about his ex-colleague's social mobility experience, and observing the rapid

development of the infrastructure in Hong Kong.

294 Rosen, S. (1976). P. 214. 295 Rosen, S. (1976). P. 209.

The belief in Hong Kong as a land of opportunity was prominent when he compared

his friends’ career development in Hong Kong. Chunyu Bai met an ex-colleague, Lee who

worked his way up in 20 years, from messenger, to clerk, to general officer. During the property speculation in the early 1970s, his ex-colleague quit his previously stable job and joined a stock brokerage firm. Chunyu Bai expressed his envy of Lee's experience, even though he was indeed wealthy from being a landlord and had retired early. Lee praised him

about his early retirement, which allowed him to enjoy life. Chunyu Bai envied his go-getting ex-colleague instead for having a forward moving social experience,

“Perhaps I am just unaspiring.”

“So what is aspiring?”

“Being aspiring is to be someone as hardworking as you… It's not for a living… As I see it, you do it for fulfilling your wish.”296

He compared Lee's upward mobile experience with the life story of a boss of a

company in the past. “Twenty years ago, Lee (the above ex-colleague) was the assistant in

the company. Now, because of his hard work, his condition is good now. But Chin was the

head of the company back then. Now because of abandoning himself to despair, he had fallen

into this condition (being a drug addict).”297 Chunyu Bai's account was an articulation of Lee and Chin's success and failure in a society with open opportunity for one to decide his/her future path. The key in this story was “choice” in a land of opportunity – keep working hard for the future career and get rewarded from life, or abandoned one's life to despair and become a drug addict. This echoes with Rosen’s findings in Mei Foo where “choice” was a valuable experience among the middle-class homeowner.

296 Liu, Y. C. (2000). “Intersection”. Pp. 152 – 153. 297 Ibid. P. 158.

Optimism also arouse from observation about the rapid improvement of the infrastructure of the colonial city. When travelling through the city by bus, Chunyu Bai compared the past city with its recent improvement in the form of high-rise buildings. He concluded that the Cross Harbour Tunnel is “a wonderful piece of engineering linking

Kowloon and Hong Kong Island”.298 This infrastructure saved people a lot of time. He also

articulated his observation about the city with the knowledge of future urban planning and

looked forward to a better Hong Kong. The major new developments of the colonial state would be the new towns and the mass transportation system,

“Just building upwards won't solve the housing shortage. The government has to develop the rural areas and build more satellite towns. More people will certainly move to satellite towns in the near future,” he thought.299

These formative experiences and optimism were part of the early stage of the “tunnel

effect” 300 with a hope effect – “hope in the tunnel”. Australian Anthropologist Ghassan Hage

uses a similar analogy of queuing at a bus stop to make sense of the function of hope in

maintaining social order. Homeownership in Hong Kong during the 1970s to 1990s functions

like a kind of queuing. People gather in a queue is a collective that join together under a

contingent condition. They don't share any group identity. A queue is merely “a plurality of

isolations”,301 and some people join and others leave with order. In this analog, the queue

symbolizes social order, and its individualization and self-governing effect works as long as

the queue continues to distribute social resources in an orderly and smooth manner. In the

context of economic development, improving infrastructure and the booming housing market

298 Ibid. P. 188. 299 Ibid. P. 189. 300 Hirschman, A. and Rothschild, M. (1973). “The Changing Tolerance for Income Inequality in the Course of Economic Development”; Wong, T. W. P. (1995). “Economic Culture and Distributive Justice”. 301 Hage, G. (2009). “Waiting Out the Crisis: On Stuckedness and Governmentality.” P. 103

in the 1980s and 1990s, one's gain was not seen as other people's loss and the target of envy, but the proof that the society is improving and one can wait patiently to share its fruit.302

In the early stage of economic development when queuing and “hope in the tunnel” still functions, the state would find the citizens surprisingly easy to please. However, this came with a cost if the traffic jam was prolonged. When the hope of upward mobility remained unfulfilled for a long period of time, the citizens would turn out to be an enemy of the established order. Hirschman had also warned us about this possibility,

But suppose that the expectation is disappointed and only the right lane keeps moving: in that case I, along with my left lane co-sufferers, shall suspect foul play, and many of us will at some point become quite furious and ready to correct manifest injustice by taking direct action (such as illegally crossing the double line separating the two lanes.303

We will discuss the accuracy of this prediction again in Chapter 5. Here in

Hirschman’s discussion, the hope mechanism in house buying was vulnerable in two

conditions. First, if one's waiting time within the tunnel was prolonged while people in other

lanes were moving forward rapidly. Second, the collapse of the “tunnel” could happen, if the

economy stops growing, or there is economic downturn and a crisis of the housing market happens.

The undercurrents had emerged already in the late 1990s. Social inequality was growing and the rich-poor gap was widening. As shown in Figure 3.7, social inequality as indicated by the Gini Coefficient grew at a particularly rapid rate between 1986 and 1996, alongside the booming housing market, and the increase in the median income of household.

In the field of homeownership, the difference between the owners and non-owners was significant. This difference was not only on the effect of wealth accumulation in the booming

302 Wong, T, W. P. (1995). Pp. 388 – 9. 303 Hirschman, A. and Rothschild, M. (1973). P. 546.

house market. Actual transactions were less frequent in owner-occupancy, and hence one could not “cash in” as easily from the rise in housing price of an apartment where they were

living. Thus, the exchange value of the apartment would often remain values on paper. The

major difference was that the non-owners, like public and private rental tenants, suffered

from the erosion of savings and earnings in the booming housing market. The owners could

enjoy potential life chances by re-mortgaging for other expenses, “trading up” in the housing

ladder, or securing a retirement plan by selling high and stepping down the ladder. And the

non-owners lost these potential chances as well.304

Gini Coefficient Indicator (1971 ‐ 2001) 0.6

0.55

0.5

0.45

0.4 1971 1976 1981 1986 1991 1996 2001

Figure 3.7 Gini Coefficient Indicator (1971 – 2001).

Source: Social Indicators of Hong Kong. (2018). Gini Coefficient

The booming housing market widened the gap of existing class and generational difference between owners and non-owners. “The capitalist, the service class and supervisors

304 “…it is still reasonable to argue that changes in the class structure… have facilitated the increase in owner-occupancy.” Lui, T. L. (1995). P. 120.

and technicians”,305 who were also more likely to be private property owners, further

surpassed those who were not able to afford homeownership. And the timing of entering the

housing market was critical as well. The late comers from the younger generation in the

1990s would not be able to enjoy the rapid growth in exchange values of the housing market

and the advantages it brought about. Koo's conclusion about homeownership in the 1990s

rightly pointed out the discrepancy between the owners and non-owners, while the informants

in the public sector were realistic about their impossibility of achieving homeownership. Yet,

they still wished to join this game if the chance arose.

However, this “formative experience” fell only in a certain period and among a segment of the population. After years of rapid increase in property price, all the informants in public sector (most of them are from lower income groups) claimed that private housing was beyond their reach. Although they have similar perception that property owning is a kind of investment for assets accumulation, they just find no way to join the “game”.306

Thus, at the end of 1990s, house buying already had discrepancies between the actual living experiences among the local population. The social discontent could still be controlled under the relatively egalitarian distribution of hope because the tunnel had not yet collapsed.

However, as Smart and Lee also warned as, the property-led growth system would also generate social instability through the condition of both rising and falling housing prices, challenging “the profitability of non-real estate companies and the daily lives of ordinary people”.307 This was evidenced in the Struggle Period of house buying after 1997 and the

Asian economic crisis. In Chapter 4, I am going to outline the structural changes that

happened in this period, and will further discuss the young adults’ responses in Chapter 5.

305 Ibid. P. 111. 306 Koo, A. C. H. (2001). P. 106. 307 Smart, A. and Lee, J. (2003b). P. 168.

Chapter 4 – Collapse of Housing Ladder and Narrowing of Opportunity Structure in

the Struggled Period

Chapter 2 and 3 explored the significance and the historical formation of House

Buying as a hope mechanism. This chapter is going to discuss the change in the temporal

mapping of the future of House Buying since 1997, when the housing ladder has collapsed

and the objective opportunity structure on the social plane is narrowing. I term this post-97

era as the Struggled Period of House Buying. From 1997 to 2017, Hong Kong first

experienced the political handover of sovereignty from the British to the Chinese

government, and transformed from being a Crown Colony to Hong Kong Special

Administrative Region (HKSAR) under the rule of China. Meanwhile, Hong Kong suffered

from two economic crises – the Asian Financial Crisis and its aftermath between 1997 and

2003, and the Financial Tsunami in 2007 and 2008. Hong Kong suffered more from the

former, and it led to the retreat of the HKSAR government from the role of investing in and

actively regulating the housing market in 2003.

Social discontent was evident in two large-scale protests in 2003 and 2004, each with

about 500,000 participants. After 2003, Hong Kong's economy bounced back, yet the

population was further polarized after 2008, following the influx of external capital as a result

of the Quantitative Easing of the US government and the Chinese economic stimulus

program. One consequence of the influx of money was skyrocketing housing prices, which

further contributed to the polarization. Social polarization, along with the struggle for the

democratic election of the Chief Executive, resulted in the Umbrella Movement in 2014 – the

largest sit-in protest in the history of Hong Kong. It occupied three major commercial areas

of Hong Kong and lasted for 79 days.

Figure 4.1 Historical Timeline of Hong Kong from 1997 to the 2010s

This chapter is going to discuss the political, economic, social and cultural shifts

underlying the above events. Politically, the influence from business sectors on the policy of

the HKSAR government became explicit and formalized after the handover in 1997.

Economically, the process of deindustrialization has been completed and the economy of

Hong Kong now relies almost completely on the property-led growth regime of

financialization. Along these political and social shifts, socially the opportunity structure has

been narrowing. The gap between rich and poor has been widening, and society is

increasingly polarized through indicators such as occupational structure, income level, and

living space. This brought about a cultural turn. A new set of post-materialist values and

discourses has emerged. This emergence poses a challenge to the belief in materialism and

the dominant discourse of the market. The increasingly polarized society also created the

discursive resources to reflect upon the ideology of open opportunity and evaluate the above

political, economic and social changes. 98

The above shifts affected House Buying particularly on the collapse of the “housing

ladder” and the narrowing of the opportunity structure on the social plane. “Housing ladder”

is a housing path designed by the colonial state in the late 1970s. It consists of three steps

from bottom to top – public rental housing, subsidized homeownership and private

homeownership. The middle step now has been collapsing for two reasons: the cessation of

the subsidized Home Ownership Scheme (HOS) in 2003, and the skyrocketing housing prices since 2008. People at the lower end who are or have not entered the step of public housing

are stuck, and cannot see the opportunity of moving forward in this housing path towards

private homeownership in this Struggled Period of house buying when the middle step is

missing and the final step is increasingly unattainable.

4.1 Social Policy: Failed Response from the State

House Buying suffered the most damage from the government policy in the housing

market for its cessation of the HOS as we shall discuss soon in this section. Yet this “free

market” approach to the social policy is not an isolated case. Social policy to offset the social

problems that are caused by polarization has been short-term, piecemeal and “neoliberal” in

general. For instance, in 2008 after the Financial Tsunami, the government appointed a

temporary task force (Task Force on Economic Challenges) to revise its policy. The

economic measures they implemented were designed to have relatively long-term results,

while the social policies are supposed to be aimed at relieving the immediate hardship. The

former measures are mostly about sustaining long-term economic growth, including

strategies to strengthen “the six economic areas where Hong Kong has enjoyed clear

advantages, namely testing and certification, medical services, innovation and technology,

cultural and creative industries, environmental industry, and educational services”.308

However, the measures in social policy are mostly short-term. These included providing temporary jobs and internship that lasted from six months to three years, a one-off grant of

HK$1,000 for students who are from the families which are already receiving social security assistance, and paying the basic rent for two-months for public housing tenants.309

The government began to implement plans to privatize public services, especially in

the realm of housing and property management. The commercial assets in public housing

estates, like shopping malls and car parks, were grouped together under a private company –

The Link.310 The rationale for the creation of this company was to boost the property market

and aid economic recovery.311 However, the social consequences of the formation of this

company were significant. Under its management, smaller local shops were gradually driven

away because they were unable to pay the higher rent that chain stores could afford. The

shopping experience became homogeneous and limited to more expensive choices. As a

result, the everyday grocery expenditures for public housing tenants was higher.312

The most significant impact on the hope mechanism of House Buying was the result

of the government's decision to stop intervening into the housing market in the early 2000s.

During the economic recession from 1998 to 2003, the HKSAR government adopted the neo-

308 Legislative Council, HKSAR. (2009). “Press Release - LCQ7: The six economic areas proposed by the Task Force on Economic Challenges for further development”. 309 Lee, K. M. and Law, K. Y. (2014). “Economic Insecurity and Social Protection for Labour: The Limitations of Hong Kong’s Adhocism during the Financial Crises”. 310 Link Asset Management Limited is established in 2004 and manages a real estate investment trust that consists of about 9 million sq. ft. of retail space and approximately 61,000 car park spaces. These assets are mostly in the public housing estates that were previously operated by the Hong Kong Housing Authority. 311 Chen, Y. C. and Pun, N. (2007). “Neoliberalization and Privatization in Hong Kong after the 1997 Financial Crisis”. P. 77. 312 Ibid. Pp. 81 – 84.

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liberal ideology that “economic growth is the best way to enhance social welfare”.313 Hence,

the government chose economic and social policies that maintained low taxes and low public

spending to restore economic growth during the recession.

In this context, the government's housing policy took a drastic turn. At the beginning,

in 1997, Tung Chee-hwa, the first Chief Executive, proposed to ease the property bubbles in

the 1990s by introducing a large-scale housing project to build 85,000 housing units annually

in the first year of the HKSAR era. But after the Asian financial crisis, the economic downfall

disrupted Tung and his administration's original plan. The subsequent economic recession,

the plummeting of housing prices and the pressure from the propertied class and property

developers in the political system of “corporatist state”314 forced Tung to not only withdraw

his interventionist plan, but also to totally retreat from the housing market. Through this

drastic policy turn, the HKSAR government sent a strong “political signal” to the market that

the HKSAR government was going to “guard the property market from further decline”.315

In 2002 the government announced its total retreat from being an active participant in the housing market, and suspend the subsidized Home Ownership Scheme (HOS), in which the government builds and sells apartments with a 30% to 40% discount lower than the market prices. “A Statement on Housing Policy” made the government's repositioning of its role clear: “Government should withdraw from its role as property developer”,316 and

“withdraw as far as possible from other housing assistance programmes to minimize

313 Lee, E. W. Y. (2005). “The Renegotiation of the Social Pact in Hong Kong: Economic Globalisation, Socioeconomic Change, and Local Politics”. 314 Ma, N. (2016). “The Making of a Corporatist State in Hong Kong: The Road to Sectoral Intervention”. We’ll discuss this concept in the next section. 315 Yip, N. M. (2013). “Challenges to Public Housing in Post-colonial Hong Kong”. P. 69. 316 Legislative Council, HKSAR. (2003). “A Statement on Housing Policy by Hon. Michael M Y SUEN, GBS, JP Secretary for Housing, Planning and Lands”. P. 3.

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intervention in the market”.317 In the conclusion, the HKSAR government reiterated again:

“home ownership should be a matter for the market with which Government should refrain

from competing.”318 From 2004 to 2007, the HKSAR halted the subsidized homeownership

scheme and stopped building any subsidized housing units.319 Meanwhile, the supply of

public rental housing hit a record low.320 Scholars had suspected the reasons behind this to be

“the pressure of property and financial interests”321 and “the pressure exerted by developers on the government”.322

As the HOS vanished, this also caused the shrinking of the first step in public rental

housing. While the HOS had been popular in the 1980s and 1990s, the applicants were selected through a lottery. The public housing tenants had to return their public housing units to the government in exchange for a higher chance in the lottery. Without the incentive that can encourage the existing tenants to return their public housing units, the queuing time for the new comers in public rental housing is further prolonged.

The government's retreat from the housing market accompanied the changing conception of “being self-reliant” promoted by the HKSAR government since the mid-1990s.

At the beginning of the colonial government’s promotion of private house buying in the

1980s, being self-reliant only meant not using the social welfare provided by the government in the official discourse of the colonial state. The objective of the colonial government's subsidized homeownership program was to add an incentive for the population to return the

317 Ibid. P. 6. 318 Ibid. P. 15. 319 The government gradually restores the HOS since 2011. 320 Hong Kong Housing Authority. (2015). Housing in Figures 2015. 321 Lee, K. M. and Cheng, C. Y. (2011). “Financialization, Economic Crises and Social Protection: the Case of Hong Kong”. P. 33. 322 Chen, H. et al. (2018). “Socio Spatial Polarization and the (Re-)distribution of Deprived Groups in World Cities: A Case Study of Hong Kong”. P. 7.

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public housing units they occupied to the government by entering the private housing market.

Thus, the HOS aimed at setting up the subsidized housing as the next step on the housing

ladder for those capable, to finally move into the private housing market. It helped “fulfilling

a double purpose of providing new homes for those who can afford to buy them and of simultaneously making rented accommodation available for those who cannot”.323

The wealthy tenants in public housing were seen by the government to be those who

misused the public resources. Adding to the incentive of HOS that encourages these tenants

to return their units, the colonial state forced the rich tenants out to rely on themselves in the

housing market through charging extra rents. The government implemented “the Housing

Subsidy Policy and Policy on Safeguarding Rational Allocation of Public Housing

Resources” (the more common name is the “Well-off Tenants Policies”) in 1986 and further

modified in 1993. The policy required the tenants who lived more than 10 years in the public

rental housing to declare their income and wealth biennially. Those who exceeds the limit

were required to pay extra rents (1.5 to 2 times of the normal rent). The colonial government

stated that “it is plainly wrong that public housing should continue to accommodate tenants

who have the financial resources to meet their own housing requirements at the expense of

those with a genuine case for rehousing”.324 After all, the government policy treated public

housing as social welfare for the needy, instead of a social right of the whole population.

Since the mid-1990s, “self-reliant subject” gained another layer of financial meaning

in the official discourse. Throughout the 1970s and 1980s, homeownership was often addressed by the colonial state in the context of soaring housing prices, and characterized as the cause of unhappiness of the population that affected its legitimacy.325 Subsidized

323 Policy Address. (1980). 324 Policy Address. (1995) “The 1995 Policy Address – Hong Kong: Our Work Together”. 325 Policy Address. (1981).

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homeownership was the response to increase the housing supply and to satisfy the

population's desire for homeownership. In 1996, homeownership was addressed for the first

time not only as a legitimacy problem and social need of owner-occupancy. Homeownership

was put on the table in the official discourse as a desirable investment object and carried the

meaning that one can make use of his/her own apartment as the financial tool to solve one's

individual problems. The HOS in its official statement outlined multiple reasons for

promoting homeownership. It stated that in addition to the sense of belonging to the

community, homeownership can also enhance “personal financial planning and security” –

“in Hong Kong, ownership of property has also proven to be a popular and valuable

investment”.326 It was an investment vehicle of a family's finance. Despite the 1997

handover, this financialization turn of homeownership remained unaffected even during the

Asian financial crisis in 1998.

Property is one of the most important components of the economy. A good home is also an important factor in maintaining the quality of life, and the residential property market in particular serves as both a major vehicle for the personal investment of wealth and a public barometer of social stability.327

This way of talking about homeownership continued in 1999 and 2000. “For most

people in Hong Kong, a home is more than a place to live. It represents the most important

investment in their lives”,328 and “people buy property not only as a home, but also as an

important long-term investment”.329 The homebuyers are also the self-reliant investors in the

official discourse. The government's action was not to help them directly, but to retreat from intervening into the “free” housing market. Under such neoliberal ideology, maintaining a

326 Hong Kong Housing Authority. (1996). Report on the Review of Home Ownership Schemes. P. 4. 327 Policy Address. (1998). “From Adversity to Opportunity: Address by the Chief Executive the Honourable Tung Chee Hwa at the Legislative Council meeting”. 328 Policy Address. (1999). “Quality People, Quality Home – Positioning Hong Kong for 21st Century: Address by the Chief Executive the Honourable Tung Chee Hwa at the Legislative Council meeting”. 329 Policy Address. (2000). “Serving the Community, Sharing Common Goals: Address by the Chief Executive the Honourable Tung Chee Hwa at the Legislative Council meeting”.

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“free” market was seen as a decision that benefits these homebuyer-investors. As we shall see

in the focus group discussions in Chapter 5, such financialized imagination of

homeownership has become commonplace among the young adults when they understand

homeownership as the safety net, not only as a shelter, but also as a financial tool.

4.2 Political: Corporatist State

The collapse of the housing ladder, besides the immediate cause from the shift in government policy and official discourse, is set in a series of structural changes: the increased influence of real estate conglomerates in the formal political regime; the real-estate driven financialization of the economy; and the widening gap between rich and poor. These political, economic and social shifts will further be discussed in the following sections.

The deliverance of sovereignty from the hands of Great Britain to China in 1997 is the watershed moment in the history of Hong Kong. No longer a Crown colony, Hong Kong now is the Special Administrative Region (HKSAR) under the rule of China. But the consequence of the transition in the political system has not been a turn from a capitalist to a communist regime, or decolonization. Instead the most significant political change is the formalization and institutionalization of the influence of sectoral interests over the government’s policy.

Political scientist Ma Ngok terms such a regime “the corporatist state”.330 Together with the

property-led financialization of Hong Kong’s economy, real estate conglomerates are now one of the most influential actors in government's economic and social policy, including housing policy.

Before 1997, the colonial state had collaborated with the local elites. As discussed in

Chapter 3, colonial Hong Kong was ruled in the form of synarchy. Both British merchants

330 Ma, N. (2016). “The Making of a Corporatist State in Hong Kong: The Road to Sectoral Intervention”.

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and Chinese industrialists were incorporated into the political system of the colonial

government and were appointed as the members of Legislative and Executive Councils since the early 20th Century. Yet this collaboration between the colonial state and the elites was achieved “under-the-table”, and was “informal, not well institutionalised and relatively restricted”.331 As a remote British colony in the Far East near China, the colonial government

carefully maintained its posture of non-intervention. It avoided directly subsidizing specific

sectors or firms to avoid the conflicting interests of the British merchants and Chinese

industrialists. The local population also seemed to accept the role of the colonial state in

balancing the interest of the public and the business community for the sake of the economic

growth this “non-intervention” policy brought about.332

The situation changed before and after the handover in 1997. During the transition

period in the early 1980s, the colonial state experienced a legitimacy crisis333 under the

shadow of the Communist China's takeover. There were waves of migration among the

middle-class in the 1980s and 1990s from Hong Kong to other developed countries like the

US, UK, Australia and Canada. In response to the crisis, the colonial state modified its appointment system to incorporate voices from the local population, as well as the business and professional elites. The Legislative Council gradually was opened to general election in

331 “In this light, the low level of intervention by the colonial state did not originate from free market ideology or an autonomous state. Rather, it was a careful managing of state–society relations by the colonial government out of legitimacy concerns.” “From this perspective, colonial governance had a corporatist flavour, as the colonial state actively incorporated social and business groups into the decision-making structure to maintain legitimacy and stability. This corporatist practice, however, was informal, not well institutionalised and relatively restricted, but it did form an important part of a state–society contract, which served to bring about relative stability in the post-war years.” Ma, N. (2016). P. 249. 332 Goodstadt, L. (2010). “Fiscal Freedom and the Making of Hong Kong's Capitalist Society”. “Hong Kong’s people seem to have accepted that the colonial administration kept an acceptable balance between the interests of the general public and the business community because sustained economic growth was accompanied by much lower levels of political unrest and social discontent than in most other British territories and Asian societies.” P. 285. 333 Smart, A. (1989). Political Change and the Crisis of Legitimacy in Hong Kong. P. 269.

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1985, and was divided into two constituencies: the “Geographical Constituency” (GC) and

the “Functional Constituency” (FC). The Legislative Council members from the GC were

elected by the whole population according to their residential districts, while the members

from the FC were elected by major business and professional groups. This system also aimed

to meet the possible “populist” demand from the public by increasing public expenditures and social welfare. A “balance” was achieved by giving full weight to the “representation of economic and professional sectors of Hong Kong which are essential to future confidence and prosperity”.334 These economic and professional sectors included: designated

organizations from the industrial and commerce sectors; professionals, like schoolteachers,

lawyers and medical doctors; corporate sectoral representatives, in which the voters are the

“corporations” but not individual persons. For instance, in the finance sector, the voters are

the representatives from the licensed banks instead of the bank employees. Other sectors

included insurance, catering, financial services, import and export, wholesale and retail,

transport, textile and garment, and real estate and construction, etc., as well as social

organizations, including labor unions, and sports and cultural groups.

After the handover, the Chinese government continued to use the GC and FC system

as it befitted China's interests and strategy. Building a “united front” with the business and

professional elites in Hong Kong has been the most important task of Chinese officials in

Hong Kong since the mid-1980s. Their objective was to ensure the stability and prosperity of

Hong Kong, and the smooth transition of sovereignty335 in the handover. For Chinese

officials, the FC system serves the function of maintaining the confidence of the local

capitalists and professionals through promising their continued representation and political

334 Hong Kong Government. (1984). “Green Paper on the Future Development of the Representative Government in Hong Kong”. Article 27. 335 Xu, J. (1993). Xu Jiatun’s Hong Kong Memoirs. P. 59. As cited from Ma, N. (2016). P. 252.

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dominance after 1997. In this way, the politically conservative business and professional class were incorporated into the ruling regime, and this class became “a convenient ally for

Beijing to help fend off the democrats' demand for full-fledged democratisation”.336 In

addition to the FC system, the Election Committee for the Chief Executive in Hong Kong

was designed in the same vein to make sure “the industrialists and businessmen will continue

to stay in the establishment”.337 One of the consequences of the corporatist political

framework was the uneven distribution of resources, through which the represented sectors,

like the real-estate and financial sectors, continue to grow and influence the government

policy.338

As a result, unlike the non-intervention postures of the colonial state, the policy of the newly established HKSAR government is heavily influenced by corporate interests; yet the interests are not unified or coherent. Since the handover, in response to the conflicting interests between different sectors, the government's interventions are often piecemeal and fragmented. This has raised a new legitimacy crisis for the HKSAR government. In the past, the colonial state could maintain its posture of staying neutral and above sectoral interests.

This posture granted legitimacy to the colonial state without democracy, and the local population believed in the state's ability and willingness to keep the balance between public and private interests and prevent excessive rent-seeking. Now, the rationale and objective of the HKSAR government is constantly called into question because of the disappearance of its neutrality towards the business and professional class.339 Sectoral groups and their

representatives in the Legislative Council often accuse the HKSAR government of favoritism

336 Ma, N. (2016). P. 252. 337 Ibid. 338 Ibid. P. 262. 339 Ibid. P. 263.

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that privileges the interests of other sectors above theirs, and hence ask for more subsidies to

expand their sectors. The pro-democratic parties in Hong Kong also attributed the plight of

the lower class and widening income disparities, and the government's retreat from the

housing market in 2003 “to the political dominance of the business class”, and identified the

FC as the symbol of such collaboration.340

4.3 Economic: Deindustrialization and Financialization

One factor that influenced Hong Kong’s transition from a light industrial city into a

global financial hub was the Open Door Policy of China in the late 1970s. China provided

cheap labor, land, and low production costs that enticed Hong Kong industrialists to move

their factories across the border. The deindustrialization and relocation of manufacturing

industries from Hong Kong to the nearby provinces in the Mainland around the Pearl River

Delta started in the late 1970s and was completed in the 1990s.341 Another factor that influenced the shift of Hong Kong's economy was the entry of China into the World Trade

Organization (WTO) in 2001. This ended the monopolistic role of Hong Kong as the major

entrepot in the trade between China and other parts of the world.342 After deindustrialization,

Hong Kong's tertiary sector became the vital component in the economy. In 2016, the tertiary

sector contributed 92.2% of the GDP of Hong Kong.343 Within the tertiary sector, “financing

and insurance” (17.7%), “real estate, professional and business services” (11%), and

“ownership of premises” (10.7%) added up to almost 40% of the total GDP. Hence, Hong

340 Ibid. P. 263. 341 Chiu, S. W. K. and Lui, T. L. (2004). “Global city, Dual city? Globalization and Social Polarization in Hong Kong since the 1990s”. See also Sigler, T. J. and Zhao, S. X. B. (2016). “Hong Kong as an Offshore Trading Hub”. 342 Wong, J. (2013). “CEPA: A Gift from Beijing?” P. 32. 343 Census and Statistics Department, HKSAR. (2018). Hong Kong in Figures. P. 16.

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Kong's economy now heavily relies on finance and real estate, and is vulnerable to crises from internal and external causes.344

Hong Kong's finance-led regime of accumulation is a real-estate centric model as

discussed in Section 3.2. In such a regime, “the close links between real estate markets and

governmental finances in Hong Kong… institutionalize the centrality of concern for real

estate prices and help to disseminate expectations for ever-increasing rents”.345 The

shortcoming of a real-estate centric model of finance-led growth regime is that when housing

prices rise quickly, the unaffordability of housing becomes a serious social problem.

Increased rent was one of the factors driving the manufacturers in Hong Kong to relocate

their factories to the Mainland, and/or turn their attention to property investment for more

profits with less effort. However, when housing prices plummet, it harms the wealth of the

propertied class and the manufacturing industries, and other small-and-medium enterprises

are also affected because most of their reserve capital is real-estate based.346

The Asian Financial Crisis in 1997 and the subsequent economic recession, lasting

until 2003, showcased such downside of a real-estate centric model of finance-led growth

regime. The downfall of housing prices caused negative equity for homebuyers who had

purchased their home at the peak in 1997. This also affected the economy and the

employment market when manufacturers and small businesspersons had also invested in real-

344 Wang, G. and Wong, J. (2013). “After Smooth Handover, now the Hard Part”. 345 Smart, A. and Lee, J. (2003). P. 168. See also Halia, A. (2000) for her discussion of the property state in Hong Kong and Singapore. Lee, To and Yu had also discussed such a cycle. “As asset prices rose, a reinforcing cycle occurred: people had further incentive to borrow from banks and invested or most likely speculated the money in the real estate and stock markets. The risk of overheating in the property and stock market remains a concern. Since stock and property markets have become the main income sources and proﬁtable investment opportunities for the major economic players including the government, households, banks, shareholders and companies, any signiﬁcant downturn of the markets would be immediately translated into a politically sensitive and socially disruptive issue.” Lee, K. M., To, B. H. P. & Yu, K. M., (2014). “The New Paradox of Thrift: Financialisation, retirement protection, and income polarisation in Hong Kong”. P. 18. 346 Smart, A. and Lee, J. (2003b).

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estate. As a result, the closing of local companies and industries caused high unemployment rates347 following the collapse of the housing market. In 2002, “more than 150,000 families

fell into a category of those having negative assets” and “bankruptcies rose, from 780

recorded cases in 1996 to a high of 26,922”.348 From 2000 to 2003, the GDP continued to drop from 1 to 3% annually and the unemployment rate reached the historical height of 8.5% in 2003 during the Severe Acute Respiratory Syndrome (SARS) epidemic. (See Figure 4.2 and 4.3)

Figure 4.2 Year-on-year % change in Gross Domestic Product (GDP) (1997 - 2016).

Source: Census and Statistics Department, HKSAR. (2018). Gross Domestic Product (GDP), implicit price deflator of GDP and per capita GDP.

347 Smart, A. and Lee, J. (2003a). “Housing and Regulation Theory – Domestic Demand and Global Financialization”. Pp. 103 - 104. 348 Siu, H. (2008) “Hong Kong Mobile: Redefining the Hong Konger?” P. 198.

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Figure 4.3 Unemployment Rate (%) (1997 – 2017).

Source: Census and Statistics Department, HKSAR. (2018). Labour Force, Unemployment and Underemployment.

The influence of the Mainland on Hong Kong's economy is also apparent. In 2003,

the signing of Closer Economic Partnership Arrangement (CEPA)349 marked the deepening economic integration between Hong Kong and China.350 For instance, the direct investment from the Mainland tripled from HK$928 billion to HK$3,043 billion between 2001 and 2011.

The inflow of Chinese capital has had multiple consequences on Hong Kong society. Market confidence was restored following the inflow of external capital from the Mainland in the local retailing sector, and opened the “China opportunities” to the trade, commerce and finance sectors. The GDP grew from 4.8 to 9.8 annually between 2004 and 2007. After a

349 CEPA was signed in 2003. It is a free trade agreement between Hong Kong and the Mainland China on four areas: “trade in goods, trade in services, investment, economic and technical cooperation”. The HKSAR government introduced the objective to be “accelerating the economic integration and enhancing the long term economic and trade development of both places.” Trade and Industry Department, HKSAR. (2018). “Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)”. 350 Wang, G. and Wong, J. (2013). P. 17.

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short recession in 2007 and 2008 following the Financial Tsunami, the GDP was restored in

2010 and 2011 with 7.1% and 8.9% growth, and continued to experience around 4-6% growth annually between 2012 and 2017. The unemployment rate was decreasing as well.

From 2003 to 2008, the unemployment rate decreased from 7.9% to around 3%. This went

back up in 2009 to 5.3% after the Financial Tsunami; yet later the rate decreased again back

to around 3%. (See also Figure 4.2 and 4.3)

The economic growth resulting from external Chinese capital came with a heavy

social price. The influx of external capital contributed to the rise of housing price from 2003 to 2008, and an even more drastic increase since 2009. This was caused by the Chinese

economic stimulus program with US$586 billion package351 and the wall of money it created

in search of assets investment opportunity. Real estate in Hong Kong was one of its targets.

The capital from China directly invested in real estate of Hong Kong increased from US$20

million in 2008 to US$1.6 billion in 2012.352 The external capital was one of the main factors

that pushed up the housing prices in Hong Kong in the Struggled Period. Between 2003 and

2017, housing prices have risen more than 460%, while the median monthly employment

earnings have increased only around 50%.353 In addition, young adults' (aged 20 – 29) median

monthly employment earnings is lower than the average with only around 30% increase.354 In this skyrocketing market, House Buying has lost its connection to ordinary people's

351 The economic stimulus program invested in areas including housing, rural infrastructure, transportation, health and education, environment, industry, disaster rebuilding, income-building, tax cuts, and finance. This worked through granting loans from the banking sectors to large state-owned enterprises of China. The long-term aftermath is the rapid increase in debt. Dittmer, L. (2018). China's Asia: Triangular Dynamics since the Cold War. P. 42. 352 Lin, C. and Wang, L. (2014). “Main Factors that Influence the Cycles of Real Estate in Hong Kong”. P. 16. (in Chinese). http://www.cf40.org.cn/uploads/PDF/20140804.pdf 353 See Figure 2.1 and 2.2 in Chapter 2 for more details. 354 See Figure 2.2 in Chapter 2 for more details. The median monthly earnings have increased from $10,000 to $15,000 per month from 2001 to 2017.

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experience. To repeat, Hong Kong has been the least affordable private housing in the world

since 2010, far surpassing other private housing markets in developed societies.355

As we are going to discuss in the next section, this influx of capital caused social polarization across the society. The gap between rich and poor continued to widen despite the recovery from economic recession. The Gini-coefficient had already been high among

developed societies in the late 1990s and it continued to grow even widener in Hong Kong from 0.533 to 0.539 between 2001 and 2016 (Figure 4.4). In 2016, Hong Kong was the second-most unequal city in the world in terms of income.356 The so-called “China

opportunities” that the CEPA generated were also distributed unevenly. They benefited

specific sectors that could generate profit across the border, such as commerce, finance, and

trading; yet local professionals, like teachers and doctors, were left behind. The privileges of external investment were also more concentrated in the established companies and hence furthered the growth of existing conglomerates.357

355 See Footnote 1 in Chapter 1 for more details. Demographia (2018). “14th Annual Demographia International Housing Affordability Survey”. 356 Behind New York, and followed by Washington. Census and Statistics Department, HKSAR. (2017). “Thematic Report on Household Income Distribution in Hong Kong”. P. 9. 357 Szeto, M. M. and Chen, Y. C. (2011). “Mainlandization and Neoliberalism with Postcolonial and Chinese Characteristics: Challenges for the Hong Kong Film Industry”. P. 242.

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Figure 4.4 Gini Coefficient Indicator (1971 – 2016).

Source: Census and Statistics Department, HKSAR. (2012). Half-Yearly Economic Report 2012. & Census and Statistics Department, HKSAR. (2018). 2016 Population By-census

4.4 Social: Increasing Social Polarization and Narrowing of Opportunity Structure

Private homeownership was further disconnected to the lower-middle class population, especially in the context of social polarization. Since the 1980s, social structure in

Hong Kong changed following deindustrialization, and social polarization in occupational, income and spatial division have increased as a result. In addition to the widening rich/poor gap as shown in the Gini Coefficient, the higher and lower ends of the service sector have expanded and the middle-income group of manufacturing jobs has been almost entirely eliminated.358 Figure 4.5 and 4.6 show the difference between the numbers of persons

engaged in manufacturing sectors and other sectors. In the 1980s and 1990s, we see a

dramatic fall in the numbers of persons in the manufacturing sectors, the equally dramatic

expansion of the service sectors like retail, and the continuous growth trend of the finance

358 Chiu, S. W. K. and Lui, T. K. (2004). P. 18.

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sector. In the 2000s, employment in the manufacturing sector continued to decline to less than 100,000 people. The finance sectors, including finance, insurance, real estate, professional and business services, and the service sectors, including retail and personal services, continue to expand.

Figure 4.5 Number of Persons Engaged by Industry Section (1981 – 1996).

Source: Census and Statistics Department, HKSAR. (1997). Statistics on Employment and Vacancies for 1981 – 1996.

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Figure 4.6 Number of Persons Engaged by Industry Section (2000 – 2017).

Source: Census and Statistics Department, HKSAR. (2018). Number of Establishments, Persons Engaged and Vacancies (other than those in the civil service) Analysed by Industry Section.

Income inequality increased as well among different types of workers. From 1991 to

2001, the median monthly income of the whole labor force increased by 93.4%. Among different occupations, the median monthly income of managers and administrators increased by 116.7%, while elementary occupations (like cleaners, messengers and security guards)359 increased by only 51.4%.360 Since 2001, the difference in income became more drastic as the general trend of income growth slowed down. In 2001, the difference of median monthly

income of managers and administrators (HK$26,000) was around five times more than the

elementary occupations (HK$5,300). In 2011, the gap widened to seven times greater. The

359 Including street vendors; domestic helpers and cleaners; messengers; private security guards; watchmen; freight handlers; lift operators; construction laborers; hand packers; food preparation assistants; agricultural and fishery laborers. 360 Chiu, S. W. K. and Lui, T. K. (2004). Pp. 17 - 18.

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former occupational group's earnings increased by around 40%, and the latter group's

decreased by around 6%.361 In other words, the rate of growth of income at the higher end

was more rapid than those at the lower end. This widened the rich/poor gap in Hong Kong in the 2000s.362

Deindustrialization of the occupational structure has meant limited occupational

choices for new workers. Young adults who do not perform well in the formal education

system mostly ended up working in entry level jobs in the expanding retail or the service sectors that do not require high academic qualifications. In these jobs, job insecurity, temporary contract work, and unclear career paths have been the norm in the name of flexibility or “survival strategies of enterprises”.363

The risk of unemployment is also unevenly distributed in Hong Kong. Workers in

manufacturing and other low value-added industrial sectors (including retail, accommodation,

food services, and especially in construction) have a higher risk of unemployment than other

sectors including the seemingly vulnerable financial sector as well as the most stable sector –

public administration and social service. Unemployment rates for higher-end workers like

managers and administrators are also considerably lower.364 Young and older workers have

higher unemployment risks than the middle-aged. The age group 15 - 19 and 20 - 29 suffered

the highest rates of unemployment. Their present livelihood can still be aided by family

support for the moment. Yet the jobs they end up getting are usually temporary and low-

skilled jobs that do not accumulate valuable work experience for future career development.

Thus, “they will face particular risks of long-term social and economic exclusion and induce

361 Chen, H. et al. (2018). P. 6. 362 Chiu, S. W. K. and Lui, T. K. (2004). P. 22. 363 Lee, K. M. and Law, K. Y. (2014). P. 56. 364 Ibid. P. 51.

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high social costs”.365 Low-income workers in general also suffered further “downward

mobility” through wage reduction, overdue wages, or alterations in their contracts, while

lacking labor protection including “insurance, maximum working hours or provident

funds”.366

Even among the middle-class, there is increasing disparity between the finance

workers who can work across the border, and other professionals in community and social

services who are tied to the local, such as social workers, teachers, nurses, and doctors.

Especially after CEPA, “China opportunities” opened up for the workers in the sectors of

trade, commerce and finance as part of China's rapid economic development in the 2000s.

These opportunities in the Mainland left local middle-class professionals behind. The trickle-

down effect of such “China opportunities” has been limited, no matter the direct benefits

gained from participating in the Mainland for the finance workers, or the indirect

improvements in local economic confidence. Thus, local middle-class professionals found

that “the promise that further economic integration of Hong Kong with the Mainland would

bring benefits to all sounds remote. …they have not yet felt the impact of the economic

recovery.”367

Recent research368 indicates that social polarization between 2001 and 2011 did not only take place on the level of occupational structure and income level, but also at the socio- spatial level. The deprived groups, especially the homeless and ethnic minorities, are concentrated in the poorer districts.369 During the same period, districts were further polarized

365 Ibid. Pp. 54 - 55 366 Ibid. P. 56. 367 Lui, T. L. (2008). “Fear of Falling”. P. 46. 368 Chen, H. et al. (2018). 369 Ibid. Pp. 12 – 15.

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with rich districts getting “richer” or and poor “poorer”.370 Meanwhile, the rent difference

between the highest and lowest rent districts has increased from 7 times to 13 times from

2001 to 2011.371

4.5 Cultural: Emergence of Post-materialist Values and Discourses

Alongside the corporatist politics, deindustrialized and financialized economy, and polarized social structure, the cultural ethos of Hong Kong has hints of change with the emergence of post-materialist values and discourse. As discussed in Chapter 2, the population of Hong Kong has been characterized by the discourse of the market since the 1970s. The discourse of the market is the belief in “market” as a free world of consumption that is unbounded by anything. This discourse encourages detachment and calculation, and is often accompanied by a set of materialistic values – materialism. Materialism prioritizes tangible, material choices, like food and shelter, over non-material choices, like democracy, social

justice and freedom. In the Struggled Period, we see new challenges towards both the

discourse of the market and materialistic values.

On the level of shared experience, the long journey from being refugees to climbing

up the social ladders with the material proof of homeownership had granted the population

the pleasure of celebrating the capitalist system, and freedom of choice in the colony. Lau

Siu-Kai372 describes the Chinese family ethos as “utilitarianistic familism” – “among the familial interests, materialistic interests take priority over all other non-materialistic interests”.373 Baker describes the emergence of a unique type of individual in the 1970s: the

370 Ibid. P. 13. 371 Ibid. P. 10 372 Lau, S. K. (1978a). 373 Ibid. P. 9.

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“Hong Kong Man” who lived in the city and was associated with the materialistic ethos of

get-rich-quick.374

The market discourse and materialistic values was often articulated by the

establishment to reinforce a depoliticizing effect.375 The hidden message in the market

discourse is that Hong Kong people care only about market choices, material needs and

economic considerations. According to this discourse, abstract values like democracy and

freedom are remote to the local population. In recent years, the depoliticizing articulation of

the market discourse and materialistic values has been resurrected again in popular

discussions, especially during social movements. For example, in Lee and Chan’s376 analysis of the news reports on social movements by the conservative, pro-establishment newspapers,

“Hong Kong people are economic animals” appear regularly. The political struggle was then reduced to a struggle that is driven by economic hardship and rewards only. Law links this economic orientation to the narrative framework initiated by the British colonial government.

377 In this framework, Hong Kong’s economic achievement has been emphasized to cover up the social problems of the colonial past. After the 1997 handover, the Chinese and HKSAR governments continued to use this narrative framework generalizing Hong Kong people as

“economic animals”, with the only difference being how much credit is given to the

374 Baker, H. (2003). “Life in the Cities: The Emergence of Hong Kong Man”. P. 478. 375 Lam and Cooper summarized this approach as the “apathetic theses”. Lam, W. M. and Cooper, L. (2018) “Introduction: Citizenship, Identity and Social Movements in the New Hong Kong”. P. 3. 376 Chan, J. M. and Lee, F. L. F. (2007). “Media and Large-scale Demonstrations: The Pro-democracy Movement in Post-handover Hong Kong”. P. 223. “…much discourse in the conservative media has attempted to 'economize' the event. Such a discourse posits Hong Kong people as 'economic animals' whose discontent towards the government was not political in nature. The calls for political change would disappear once economic conditions improve. This line of argument diverted attention from political reform. It also fit into the Chinese government's policy initiatives (e.g. the Closer Economic Partnership Agreement) aiming at improving the economy of Hong Kong.” 377 Law, W. S. (2015). “The Past and Present of the Hong Kong Local Consciousness”. (in Chinese).

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contributions of the Chinese government in CEPA for the economic prosperity of Hong

Kong.

Despite the dominant market discourse and materialistic values that were circulating throughout the HKSAR and Chinese governments, these discourse and values have faced challenges since 1997. Non-materialistic378 or post-materialistic379 values emerged in the

protests against the newly-established HKSAR government throughout the 2000s. These

protests began to connect themselves with ideas of civil society, democracy, and freedom.

Yet this did not happen right away. At first, these protests were about materialistic

considerations and were motivated by the poor performance of the government in

safeguarding people's wealth. Thus, the participants, unlike the social movements in the

1970s and 1980s initiated by the grassroots or the downsized workers in the process of

deindustrialization, were middle-class investors in the stock and property market. For

instance, in 2000, there was a protest that gathered “5,000 people in five separate petitions

representing different interests, including those of doctors, social workers, and property

owners”.380 This protest was restricted to complaints about the inability of the HKSAR

government to carry out its role of efficient administrator in upholding people's economic

interest.

Gradually a new discourse of citizenship381 among the middle-class population

emerged in the social movements during 2003 and 2004. These two movements were the

largest scale of marches in the history of Hong Kong, with approximately 500,000 protestors

378 Ng, C. H. (2005). “After the Crises: Changes in Social Ethos”. 379 Lee, F. L. F. and Tang, K. Y. (2013). “Economic Development, Political Change, and the Post-material Turn of Hong Kong Young People”. (in Chinese). 380 Mathews, G., Lui, T. L. & Ma, E. K. W. (2007). P. 55. 381 In the late 1990s, Ho had criticized that the social movement in the 1980s and 1990s lacked of a narrative framework of citizenship. Ho, D. K. L. (2000b). P. 195.

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in each.382 A group of intellectuals and professionals attempted to articulate the movements

with a set of core values of Hong Kong beyond the discourse of the market. These values

included “liberty, democracy, human rights, rule of law, fairness, social justice, peace and

compassion, integrity and transparency, plurality, respect for individuals, and upholding

professionalism”.383 They worried about the deterioration and weakening of the city's

“governance and business environment”, and “institutional rationality and social cohesion”

since the handover. They called for the local population to take action and defend their social

freedom. Ma Ngok discusses these social movements in 2003 and 2004 as “civil society in

self-defense”.384

While the above social movements represented possible middle-class non-

materialistic values, other social movements expressed a critique of the discourse of the

market and the underlying assumption of Hong Kong's capitalist system and way of living.

These movements criticized neo-liberalism and stressed the importance of local community.

For instance, Chen and Szeto discuss the “New Preservation Movement” from 2003 to 2008.

The movement included Lee Tung Street (Wedding Card Street) movement from 2003 to

2007, and Star Ferry and Queen’s Pier movements in 2007 and 2008. These movements

aimed at preserving the local landmarks and communities, like Lee Tung Street, Star Ferry

Pier and Queen's Pier.

They argue that these movements are an example of a progressive localism in the

making. The movements responded to the government's project of privatizing public assets

(e.g. The Link), and also the gentrification brought about by the massive urban renewal

382 These marches were called “Hong Kong 1 July Marches”, as they took place on the 1st July, the memorial date of handover in 1997. 383 Leung, A. (June 7, 2004). “Push to defend city's core values”. SCMP.; Wong, T. W. P. (2006). “Core Values: The Inspiration from the Social Indicators of Hong Kong (1988 – 2001).” (in Chinese). 384 Ma, N. (2007). Political Development in Hong Kong: State, Political Society, and Civil Society.

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projects in the 2000s. They argue for going beyond the traditional social movement model of

Hong Kong. In the old model in the 1980s and 1990s, the organizers and the participants aimed to struggle within the system of parliamentary democracy in the elections of

Legislative Council, pressing for universal suffrage to elect the Chief Executive, and for increasing social welfare and resources.

The supporters of progressive localism recognized the importance of these aims, yet

they differed from the old model in the way they developed a bottom-up democratic

movement based on local communities. These supporters aimed at constructing the new,

decolonialized subjectivity of the Hong Kong people, and hence emphasized “the rediscovery

of Hong Kong subjectivities emerging out of the acts and agencies embedded in actually

existing local community resistance and community building processes”. 385 They challenged

both the state and the conglomerates. On one hand, they protested the undemocratic urban

planning system within the government. On the other hand, they fought against the

neoliberalism characterized by commercialization of public space and collusion between the

state and the conglomerates.

The above cultural changes influenced the younger generations, particularly by allowing them to acquire a language to criticize the government and social inequality, and to reflect on their own situation. Lee and Tang have an inspiring discussion of this turn which they termed as “post-materialism”.386 In their focus group research, they found that the values

of the younger generation had changed. Young people were more concerned about abstract

values like democracy and freedom, instead of merely about survival and subsistence.

385 Chen, Y. C. and Szeto, M. M. (2015). “The Forgotten Road of Progressive Localism: New Preservation Movement in Hong Kong”. P. 450. 386 Lee, F. L. F. and Tang, K. Y. (2013).

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Lee and Tang suggest that changes in the material base, for example, economic

growth and the transition towards an affluent society, are not sufficient to bring about the

cultural turn in post-materialism. They instead propose two contextual reasons behind this

turn: first, prolonged social inequality and the dysfunction of the ideology of open opportunity; and second, the experience of being raised in a more democratic environment with discourses of abstract values. For the former reason, as we have discussed in the previous sections, the economy bounced back after the recession in 2003, yet the rich/poor

gap was still widening and social polarization worsened. In this context, the ideology of open

opportunity — that one can gain success through individual efforts in an open society — had

lost its credibility. Young adults, who grew up without the experience of sharing in the

economic growth like the older generation, questioned this ideology. To them, the widening

rich/poor gap was seen not as a reasonable outcome of fair competition between isolated

individuals, but the evidence of social injustice in the system.

For the latter reason, the young adults Lee and Tang interviewed are capable of

articulating and debating post-material issues. They can reflect on issues about environmental

protection and criticize the problems of developmentalism. Lee and Tang attribute this ability

to their upbringing and socialization. These young adults grew up in the 1980s and 1990s,

and were living in a society where the values of democracy and freedom had dominated and

been taken for granted compared to the 1970s. In the 1980s and 1990s, the colonial state

began to promote the general election of the Legislative Council, and political discourses had

proliferated in the media. Thus, Lee and Tang conclude that post-materialism is not only a set

of values, but also the discourses and reasonings that circulate in the public sphere. They

believe that post-material discourse has become popular among the younger generation, yet

they also admit that the struggle between and coexistence of material and post-material

calculation must be further researched. This is a project I will take up in the next chapter:

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how far have the discourse of the market and materialistic values been challenged in young adult's discussion of housing and homeownership?

To conclude, behind the failure in the government’s social policy of responding to the widening gap between the rich and the poor is a series of political, economic, social and

cultural changes. Politically, the formation of a corporatist state allowed the real estate

conglomerates to have more influence on government policy and damaged the legitimacy of

the HKSAR government. Economically, the deindustrialization and financialization of the economy, accompanied by the implementation of CEPA, brought about a private housing market that was easily affected by the influx of external capital. Socially, the rich/poor gap was widening despite the recovery from the recession from 2003, and the society was increasingly polarized. Culturally, the experience of increasing social inequality in the midst of affluence387 and the proliferation of new political discourses went beyond materialism

helped to cultivate a post-materialist turn in the younger generations.

The above contextual changes have weakened the material base upon which the hope

mechanism of House Buying was built in the period between the 1970s and the 1990s. House

Buying and the “hope in the tunnel” it produced has lost the optimistic temporal mapping of

the housing ladder and the previously-accepted belief of open opportunity in an era of

skyrocketing housing prices. Apparently, House Buying should have lost its ability to

produce hope in the above contextual change. But as we’ll see in the next chapter by

analyzing the data from focus group interviews among the relatively better educated young

adults, House Buying continues to produce hope through a discourse of “waiting for the

387 Goodstadt, L. (2014). Poverty in the Midst of Affluence: How Hong Kong Mismanaged Its Prosperity.

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coming crisis” that channels young adults’ discontent towards a self-reliant project in the housing market.

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Chapter 5 – Hope through Waiting for the Coming Crisis

House Buying as hope mechanism produces three social processes: individualization,

self-governing of the subject, and the hope effect. To continue the tunnel metaphor, all the

people that are going through the tunnel do so as a collective that is joined together

contingently without any group identity. They are a group of isolated individuals or “a plurality of isolations”.388 When the queue is moving, people join and leave at different times.

People queuing up in the lane share the self-governing tendency to be disciplined and wait

patiently, as long as the queue continues to move smoothly and orderly; waiting seems to be a

temporary condition of exception. This process of moving along contributes to the hope

effect. Those who were left behind in the process of economic growth are not likely to be

moving well in the tunnel and, as a result, have the unpleasant feeling of prolonged waiting.

Yet, this unpleasant feeling was compensated to a certain extent during a historically

contingent moment – the early stage of economic development.

This hope mechanism had its “hour of truth”389 in the 1970s to the 1990s when Hong

Kong was undergoing rapid economic development. At this early stage of economic

development, the observation that people in other lanes were able to move could have been

read as the signal of hope that my chance of moving is coming soon, instead of as evidence of

social inequality or as the target of envy.390 (See Figure 1.1) One could hope to seize the

388 Hage, G. (2009). P. 103 389 Hirschman, A. (1982). “Rival Interpretations of Market Society”. P. 1481; Wong, T. W. P. (1995). Pp. 389. 390 Wong, T. W. P. (1995). Pp. 388 – 389.

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coming opportunity through individual effort. This “hope in the tunnel” to a certain extent

compensated and depoliticized the suffering produced by waiting in the queue. People could

interpret the shortage of affordable housing and high housing prices as individual issues,

instead of a widespread social problem that was caused by the colonial and capitalist system.

This chapter examines the consequence of what happens to House Buying when

queuing no longer functions the way it did in the past. The last chapter traces the recent

structural changes in Hong Kong that lead to the collapse of the housing ladder. Now,

without the housing ladder as a means to connect the self-reliant subject and the middle-class

life goal, the question is, has the population been “(re-)politicized” and developed a stronger

social awareness in their imagination of the society? Will a stronger sense of social awareness

turn the young adults into “an enemy of the established order”?391 In this chapter, we find a

“yes” to the first question, but a “no” to the second one. Despite the increased social

awareness about the dysfunction of the government and housing market, young adults in this

research project channel their social discontent through a discourse of waiting for the coming

crisis, and seek to be self-reliant in the market. In this sense, the hope mechanism has

changed, but is also paradoxically reinforced amid the increased social awareness and discontent. (See Figure 1.2)

The findings of this chapter are derived from focus group interviews I conducted in the summers of 2014 and 2016. In these two summers, I participated in a large-scale, longitudinal research project392 about the cultural values of Hong Kong people. I took this

391 Hirschman, A. and Rothschild, M. (1973). “The Changing Tolerance for Income Inequality in the Course of Economic Development”. P. 552. 392 This research project is led by Prof. Francis Lee from the School of Journalism and Communication in CUHK, in collaboration with Dr. Chan Chi-kit, Dr. Leung Kai-chi, Dr. Tang Kin-yat and Miss Vivien Zhang. I appreciate the opportunity to participate in the focus groups and enjoy valuable discussions before and after the interviews with these colleagues.

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opportunity to observe and ask questions of participants to discern how they articulate House

Buying. Thematic, semi-structured focus group interviews were used to “take account of the complexity, layering and contradictoriness of all lived cultural forms”.393 This research

concerned interviewee's narratives not as “self-evidently authentic”394 experience, because

what is expressed is always already in discursive forms. Asking a discussion question always

involves both discourses and experience, the articulated and the lived. This method can grant us a more general understanding about how an issue is discussed in a group setting, where

“participants have to explain, justify and argue for their opinions”.395 The objective was to

trace the dominant discourse and social imagination these young adults share, and to see what

political effect the discourse and social imagination produce.

These focus groups were conducted in Cantonese.396 I interviewed a total of 73 young

adults ranging from early 20s to their early 30s and relatively better educated. They were

separated into 12 groups of 5 to 7 young adults each. In total, there were 42 female and 31

male participants. Groups were divided by their educational background and work

experience, except one group which was formed by their living experience in Hong Kong as

frequent movers (Group 12). (See Figure 5.1) Four groups were university students, four

groups were university graduates who had worked for a few years, two groups were associate

degree student and graduates and one group was young professionals. The students were

usually in their early 20s, and the graduates were in their mid to late 20s.397 We asked the

393 Johnson, R. et al. (2004). The Practice of Cultural Studies. P. 215. 394 Pickerings, M. (2008). “Experience in the Social World”. P. 26. 395 Meyer, A. (2008). “Investigating Cultural Consumers”. P. 73. 396 The subsequent dialogues are my translation from Cantonese to English. I have tried to represent their discussions in English. But the original meanings would still be lost when paraphrasing and because of the selection of words. I have attended to this challenge and try my best to represent the discussion in its original context. 397 I would use pseudonym and proximately identify their age, education and work experience in the dissertation to protect their identity.

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interviewees to discuss several hot topics from news and online forums, which were aimed at

prompting people to discuss their future planning. I also posed this rhetorical question: “Is it

worth it to exhaust one's youth on homeownership?”398 This question prompts the

interviewees to simultaneously reflect on the general meanings of material return, dreams,

happiness, life goals, and the relation between two generations. In general, the young adults

have a strong distrust of the government, and a strong sense to survive instead of achieving social upward mobility.

One major shortcoming of this sampling is that it missed the young adults who have not had associate degree or higher educational qualification. This bias should not be overlooked. The discourse of “waiting for the coming crisis” should be read as prevalent to the better educated young adults, yet its articulation in the relative lower educated groups should not be assumed until further research is conducted in the future. The subsequent analysis also missed out sexuality, gender, ethnicity, and class difference. These differences should also be attended and explored in future research.

398 “Is it worth it to exhaust one's youth on house buying?" is a question derived from an article by the former president of the Chinese University of Hong Kong, Prof. Joseph Jao-Yiu Sung. He was a relatively outspoken and liberal president in the academy of Hong Kong, and had an official blog on the university website to communicate with his students. In a blog post titled “The Taste of Youth” (4th March 2016), Sung criticizes the corrosive influence of the market discourse and the pressure from older generations on the upbringing of young people. At the end, he poses this rhetorical question – should one spend the youthful period on a house as the ideal material return, or should young people spend this time working on other dreams and life pursuits? Sung, J. J. Y. (4th March 2016). “The Taste of Youth”.

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Date Participants

Group 1 July 2014 6 University Graduates with a few years of working experience (5 Female and 1 Male in their mid to late 20s) Group 2 July 2014 5 University Graduates with a few years of working experience (3 Female and 2 Male in their mid to late 20s) Group 3 June 2014 6 University Students (5 Female and 1 Male in their early 20s) Group 4 June 2014 7 University Students (4 Female and 3 Male in their early 20s) Group 5 July 2014 5 Associate Degree Holders with a few years of working experience (2 Female and 3 Male in their mid to late 20s) Group 6 June 2014 6 Associate Degree Students (3 Female and 3 Male in their early 20s) Group 7 June 2016 7 University Students (4 Female and 3 Male in their early 20s) Group 8 June 2016 7 University Graduates with a few years of working experience (3 Female and 4 Male in their mid to late 20s)

Group 9 June 2016 7 University Students (5 Female and 2 Male in their early 20s) Group 10 July 2016 7 University Graduates with a few years of working experience (4 Female and 3 Male in their mid to late 20s) Group 11 May 2014 5 University Graduates with a few years of professional working experience (2 Female and 3 Male in their mid to late 20s) Group 12 May 2016 5 young people who were in their 20s. This is a unique group which we call the Frequent Movers. It was formed by those who had moved their home from one district to another 3 times in 10 years. (2 Female and 3 Male)

Figure 5.1 Background of Focus Group Interviewees in 2014 and 2016

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5.1 Gloominess of Young Adults with Social Awareness

The most striking impression I got from the focus group interviews was a picture of

gloominess. Among all social issues, including careers and education, housing and

homeownership were one of the areas that easily provoked the interviewees to express

pessimism. Yet, the gloominess was not only about the issues of sheltering and family

making. The interviewees articulated their gloominess to the social imagination of Hong

Kong society in general, or what I have called the social plane. This section aims at teasing

out the meanings of their gloominess – imagining the social plane of Hong Kong as “a pool

of stagnant water”.399 Discussing this image of stagnation is necessary to ground the

subsequent discussion of the reimagination of House Buying.

The word “stagnant” highlighted the key characteristic of young adults’ imagination

about the social plane. This imagination of Hong Kong social plane as stagnant was not

prompted by immediate suffering from life and death issues. At the time of the focus groups

the present conditions were unpleasant and social inequality was visible, yet the social

problems were not serious to an extent that many people had moved into the condition of

unemployment400 or homelessness. “Stagnation” pointed to the narrowing of the future

opportunity structure on the social plane one imagines himself/herself to be situated in.

This suffocating image can be contrasted to the social imagination of open

opportunity in the 1970s to the 1990s, which Wong described Hong Kong as an imperfect

utopia.401 In his research, people in general believed that Hong Kong was a place with an

399 As we shall see in later section, this description was used by an interviewee to describe his feeling towards Hong Kong’s present condition in his mind. 400 The unemployment rate has been low and is about 3% in today’s Hong Kong. See Figure 4.3. 401 Stephen Chan understand the temporality of Hong Kong in the 1990s with the following formula: “Present”, if it cannot embrace any forms of utopian ideal or urge, perhaps it's because the people has already seen the utopia is actualized. “Past”, if it has been completely, spontaneously, thoroughly forgotten, perhaps 133

open opportunity structure where one can have the chance to move up through individual effort. This world was by no means perfect, because people clearly had unpleasant experiences when living in Hong Kong. They could clearly vocalize their dissatisfaction in work, class, social inequality and the political system, and describe their problems: “failure to derive satisfaction from one's work, seeing conflicts between the haves and the have-nots as inevitable, seeing the big corporations as having too much power, to the view that there is much inequality in mobility chance between different classes, and to a pervasive sense of political impotence”.402

Yet these experiences of inequality and discontent had not been articulated into a

social criticism of the whole social system and the status quo.403 At that time, maintaining the status quo and social stability was a popular slogan across the public sphere, and hence the politicians repeatedly promised that the Hong Kong way of living would continue after the

handover in 1997. The general wish of the local population in the 1970s, over 80%, in fact,

was to “have the status quo maintained”.404 And the public had also taken social stability and

economic prosperity to be “the benchmarks of ‘legitimacy’”405 and prioritized maintaining the

status quo over democracy and social justice. For instance, in a survey conducted in 1977,

57.3% of the respondents regarded maintaining social stability to be “the major responsibility

it's because the historical imaginary of the people has already been dissolved by the existing social and cultural constraint. “Future”, hasn't it been already indifferently tamed, acquiesced, unimagined in advance?” Chan, S. C. K. (1997) “Unimagined the Future”. P. 275. 402 Wong, T. W. P. and Lui, T. L. (1993). “Morality, Class and the Hong Kong Way of Life.” P. 18. 403 There was such possibility in the 1960s when individual problems were articulated into social problem as shown in the 1966 and 1067 riots. The subsequent social reforms by the colonial government could provide a dominant individualistic discourse in the context of rapid economic development. Social movements existed, but they were articulated more to the personal issues to fight for more social resources instead of structural change towards colonialism and capitalism. 404 Lau, S. K. (1982). P. 104. 405 Sing, M. (2004). Hong Kong's Tortuous Democratization: A Comparative Analysis. P. 46.

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of the government”, while only 10.5% placed “the construction of a democratic and

egalitarian society on the top priority list of governmental responsibilities”.406

In the period from the 1970s to the 1990s, people mediated their experience through

the imagination of a social plane, which was perceived to be a trajectory characterized by

open opportunity. They articulated their unpleasant experiences through a narrative of self-

reliant expectation, wherein an individual exercised “initiative and choice”407 to try different

paths and “make a better living”408 in the open yet imperfect utopia. To the people at that

time, “the world is the best of all possible worlds, and everything in it is a necessary evil”.409

“Most of the respondents put the blame of failures not on the government or its policies, but

on themselves.”410 After all, they believed that “one has to attend to one's business, there being no use in showering the failures with sympathy”.411 People in general carried the hope

that waiting while working hard would be rewarded eventually. Thomas Wong summarized a

unique temporal mapping of the future behind the imperfect utopianism – a combination of a

realistic assessment towards their unpleasant condition, the actual possibility of social

mobility, and “optimism in the future”.412

Hong Kong people’s imagination of the social plane has changed drastically since

then. The young adults I interviewed in 2014 and 2016 shared a similar realistic assessment

of their conditions and dissatisfaction with life issues as those adults in the 1990’s surveyed

by Thomas Wong on work, class, social inequality and the political system. While the

406 Lau, S. K. (1982). P. 103 407 Wong, T. W. P. and Lui, T. L. (1993). P. 22 408 Ibid. Pp. 23 - 24. 409 Ibid. P. 20. 410 Ibid. P. 19. 411 Ibid. P. 20. 412 Ibid.

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dissatisfaction with work, social inequality and the political system existed well before the

1997 handover, the key distinctive element of the younger generation in today’s Hong Kong

is their disbelief in the chance for an individual to take “initiative and choice” to try various

paths and achieve a better life. Young people are also not convinced, like previous

generations, that maintaining the stability of the status quo is beneficial to the whole society.

Contrary to the image of “the best of all possible worlds” and imperfect utopia in the past, the

status quo in today’s Hong Kong was described by the young adults as “a pool of stagnant

water”. The pessimistic, gloomy picture matched Cultural Studies scholar Stephen Chan's

recent discussion about the cinematic engagement with “the absence of hope” in Hong

Kong.413 Chan proposed that the movies he discussed capture “the collective panic, anger,

frustration and anxiety”.414 In these movies the subject is presented “in a state of gloomy

uncertainty, unsettling fascination and devastating despair”.415

Chan's discussion is about the cinematic imaginary of Hong Kong, and has not

touched on the actual articulations among young adults about his proposed “absence of

hope”. My subsequent ethnographic findings enrich and supplement Chan’s observation, and

do not only focus on the issues about housing. I outline the young adults’ discussion of the

social plane in general to ground their specific concern about homeownership and hope in

Housing Buying in the latter half of this chapter. The following two sections are going to

discuss two characteristics of their social imagination. First, the young adults as shown in this

research can go beyond the individual, and discuss the social elements of their life problems.

Second, their social imagination consists of economic, social and political elements which

articulates the status quo as stagnation, instead of stability.

413 Chan, S. C. K. (2017). “Un-imagining the local/future: cinematic engagement with the absence of hope”. 414 Ibid. P. 833. 415 P. 833.

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5.2 Identifying the Social Factors in Stagnation

In their discussion of the life problems they faced, we can summarize two approaches when articulating the reason behind their frustration. These two approaches are the individual and the social. Unlike the previous generations which were inclined to articulate life problems as individual issues, these young adults now were more inclined to take a social approach and were capable of identifying the social root behind these problems.

The individual approach to understanding the life problems articulates their frustration

over future paths as part of a normal stage of youth — one is getting lost when facing the

transition towards adulthood and the school/work transition. The younger participants of the focus groups, who were still studying in the university, tended to have a more personal, and even existential approach when discussing stagnation. They suggested that youth is a period when young adults are in search of the meaning of life. When they are leaving the family, they negotiate between their own aspirations, and the demands and expectations of their

parents. Family, the educational system, and career choices are the immediate issues that they are frustrated about.

The individual approach can become a philosophical and personal reflection on the meaning of life. For instance, Lau416 and Erin417 were both participants in the focus group of

university students. Lau shared her experience about expectations she felt from significant

others on future career and family making. She carries the responsibility to be a breadwinner

and hence she must secure her future career and homeownership. Similarly, Erin saw life as

an endless pursuit with a series of interim goals such as studying, getting a job, getting

married and giving birth to children. People keep pursuing the next step of the life trajectory

416 Lau was a female university student in Group 9 (2016) in her early 20s. 417 Erin was a female university student in Group 9 (2016) in her early 20s.

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on the social plane endlessly under these external social expectations. These expectations

from significant others serve as a force that keeps them pursuing success. Like Erin said in

the focus group,

At last, if one fails to reach these goals, then other people, including my parents or the social atmosphere, will push you to continue. This way of pursuing one life goal after another seems to be endless and exhausting. When will be the end to the expectation of others and myself? In general, this is quite grey and dim.

In the focus group discussion, the individual approach was not the only engine that

people discussed reflecting on life planning. The social approach often accompanied the

above personal reflection and went a step further to examine the social roots behind the

interviewees’ frustrations over future movement in life. The young adults examined and

connected both perspectives together. Thus, they had gone beyond the perspective of isolated

individuals, and now had a social awareness of the problems they are facing. One outstanding case would be Joyce,418 who was in the same focus group with Lau and Erin. She connected

this personal approach towards her life trajectory with a critical reflection on the social

system, in particular the pervasiveness of materialistic cultural priorities. Joyce described

these social conditions as “grey” or “gloomy”, when a person’s dream is subordinated to

material consideration. For example, she described her experience of learning music. Her

mother had long been nurturing Joyce’s interest in music. However, when she proposed

pursuing music as a career, her parents did not approve. In her parents’ eyes, this interest falls

under the need of serving a materialistic purpose, like getting into a better school by having

better cultural capital than other students. Her parents worried, what if her interest in music

exceeded this practical purpose and became a “genuine interest? When Joyce considered if

418 Joyce was a female university student in Group 9 (2016) in her early 20s.

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her interest in music could be developed into a career, her parents stopped this dangerous tendency saying, “you cannot feed yourself by doing music. Don't do it.”

Up to this point Joyce case was still a very typical experience many middle-class

families might have when discussing the future career of their children. But then, Joyce's

personal approach became connected with a social criticism about the political system of

Hong Kong. To Joyce, career, and more broadly the development of industries, is not only a

choice of an individual but is also shaped and supported by the government policy. The

policy in Hong Kong often seems like “having a banner with a slogan to promote some ideas,

yet with no concrete plan to really achieve the goals”, as Joyce put it. She clearly cited the

previous failed examples of Hong Kong to promote the arts and youth development.

But the problem is on the social system. For example, the government have developed some infrastructures like the Cultural District and the Youth Square. The objective is to nurture the creativity of young people like us by providing space. But these infrastructures are not designed and planned by those people with related background, like arts or musician. They are merely politicians or civil servants. So those infrastructures failed to achieve their objective in the end.

Joyce’s analysis of the social context was commonly shared by other young adults as

we shall see in next section when further discussing the content of this social approach. In

general, they have a strong and subtle sense of social awareness and can acknowledge the

social causes of their personal frustration. They can further articulate their gloominess into a

narrative of stagnation about how the government failed to construct a more open social plane

in today’s Hong Kong.

5.3 Imagination of a Stagnant Social Plane

A second characteristic of the social imagination articulated by the interviewees

combined the stagnant social plane with three discursive elements: first, a narrative of the

developed economic stage in which the young adults felt trapped, defined by narrowed

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opportunity structure and high living costs; second, a strong social awareness of the weak

social support system and problematic housing policy after the government’s shift to a hands- off approach to the population; and third, a strong sense of political impotence towards the political system that refused to reform and take the young people’s discontent into account, particularly after the Umbrella Movement in 2014.

The first element is a narrative that Hong Kong society has passed the period of rapid social and economic development. In this narrative, while opportunity structure expanded as

Hong Kong’s economy grew rapidly in the past, now the structure has fully developed and reached a relatively stable stage. “Stability” is another name for “stagnation” in the young adults’ eyes, and the “stability” of the existing social system makes the opportunity structure

“unmalleable”. Parks419 was the interviewee who described the status quo of Hong Kong as a pool of stagnant water. He invoked this image when comparing the stable development in today’s Hong Kong with other social systems he perceived to be “unstable”. This image implies that a social system should be “unstable” enough to allow people to have hope that things can change — “those places that are unstable are the places with most hope”. But

Hong Kong is too “stable”, and hence “stagnant” to the younger generations. I perceive his use of “unstable” to mean the “malleability” of a social system that allows the possibility of change. To Parks, this would also mean conditions can change for the better in the future. But

“Hong Kong nowadays is just a pool of stagnant water, and the problems in the social system

are difficult to change”.

The malleability young adults longed for corresponds with what is considered open

opportunity in economic terms and was related to the developed economic stage. We can find

419 Parks was a male university student in Group 7 (2016) in his early 20s.

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a clear expression of such “unmalleability” from Daren.420 He expressed his discontent about the high rental costs that hold back his entrepreneurship and has efforts to try new paths in

life. “If I want to start my own business, no matter what kind of business it is, the rent has

already impeded its development.” Daren believed that the paths to success in Hong Kong

were now narrow and fixed after years of development driven by the financial game of speculation in the property and stock market.

This image was further strengthened through comparing the developed Hong Kong with other developing societies in terms of housing price and living expenditures. Parks had touched on the this when he proposed that Hong Kong is stagnant. Another interviewee,

Eva421 provided a concrete case and compared Hong Kong with Xi'an, a second-tier Chinese

city. She found that the private housing price is surprisingly cheap. She shared that her friends living in Xi'an told her that a property located at the city center cost only a university graduate's two-month salary. This story may not be accurate, but what matters is her reasoning. She used this story to support the narrative: during the early stage of economic development, even though people’s economic life was often poor, opportunities were open and the society was vibrant for its open-endedness. Yet at the stage of a fully developed economy like Hong Kong, “the housing price and living expenditures are so high, and the salary is so unreasonably low. And you just can't catch up with the rise (of the living costs)”.

Now that economic development has slowed down in Hong Kong, young people find the rapid increase in rental, housing and living costs have held them back from trying new paths in life. Especially when considering the speed of increase in housing price and living costs,

420 Daren was a male working university graduate. He was in Group 8 (2016) in his mid - late 20s. 421 Eva was a female university student in Group 7 (2016) in her early 20s.

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they cannot sense the possibility for upward movement and the achievement of new life goals supported by a salary increase and hence feel stagnated.422

The second discursive element that is related to young people’s perception of

stagnation is a strong sense of social awareness. This awareness is shared in young adults’

discontent and distrust over the social system and government policy. The depoliticized and

individualist attitude towards social inequality, which was dominant between the 1970s and

the 1990s, has vanished in the focus group discussions. Going beyond the older generation’s

individualist approach to solving their problems in life, now the young adults are very aware

of the HKSAR government's hands-off approach in social policy and can articulate its social

effect in the widening rich/poor gap, and more broadly its failure in constructing a more open

social plane for the young adults to imagine and connect to a better future.

Young adults’ social awareness was evidenced in their everyday observation about

the government’s hands-off approach towards the social problems. Esther423 criticized the

government policy of outsourcing and privatization by using the example of The Link.424 To

Esther, such policy is indeed a political statement, “the government is not going to intervene into the livelihoods of the population; the private firms can go ahead to do whatever they want.” Most shopping malls in the public housing estates originally designed for the lower- class population now are privatized by the government.

422 Harris (a male working university graduate in his mid-20s. He was in Group 8 2016.) gave us another perspective to understand this comparison between Hong Kong and other places. He visited Taiwan for a while. And his lesson was that each place has its own problem. If we take the salary in Hong Kong to live in Taiwan, then we may live a good life there. But for those young people there, considering the salary of the fresh graduate, they may earn less than the young people in Hong Kong. The Taiwan government has not helped them at all. 423 Esther was a female working university graduate. She was a professional in Group 8 (2016) in her mid - late 20s. 424 The Link is a private company that controlled the commercial assets in public housing estates, like shopping malls and car parks. See Section 4.1 and Footnote 310 for more details.

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The consequence is that the private companies aim to maximize profit and renovate the shopping malls with middle-class style. This drives up the rent of these shopping malls, and as a result the shopping experience in these malls became homogenized and more expensive because only the chain stores can afford the rent. What Esther described is a process of gentrification; she further connected this process to the overrepresentation of sectoral interest in the political system of Hong Kong that neglected the needs of the lower and middle classes. This analysis mirrors Ma Ngok’s discussion of the corporatist state.425

The young adults recognized that the problems were about inequality in the social system, instead of merely the result of administrative inefficiency or political miscommunication.

Young adults were also aware of the impact of government’s policy in housing problem, and could articulate its relation to the increase of housing prices, the collapse of the housing ladder and the dominance of the real estate conglomerates in the private housing market. They understand that it is not only the social plane that is stagnant, but that this stagnation is produced in large part by the collapse of the housing ladder that connects the self-reliant subject and the middle-class life goal along a clear temporal line. The university graduates especially cannot opt for the housing choice of public rental housing because their salary exceeds the maximum income ceiling.426 Yet, they are not well-off enough to catch the skyrocketing housing price since 2008. Kathy is a middle-class professional in her late 20s.427

She felt trapped in-between public rental housing and private homeownership. Following the government’s retreat from the housing market and the halt of HOS since 2002, the discounted

425 As discussed in Chapter 4 Section 4.2. 426 The median monthly wage in the age group of 25 – 34 years old was HK$17,600, and the income ceiling to apply public rental housing for an individual is HK$11,540. See Section 2.5 for more details about the viable housing choice among the young adults. 427 Kathy was a working university graduate and a professional in Group 11 2014.

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homeownership as the middle step provided by the government has gone. Kathy complained

that,

Older generations may have begun by living in the public housing unit, moving on to HOS housing, and after all achieving private homeownership. But in my generation, people lost the step in the middle after the halt of HOS. You can't live in public housing. Either you are very rich and achieved homeownership, or you'll have to go private renting. The step in the middle is missing for one to buy a house.

The desire towards homeownership will be discussed in section 5.5. Here I only

outline that private rental housing is often seen unfavorably among the young adults for two

reasons. First, the cost of renting is high as discussed in Chapter 2 Section 2.5. Second,

money spent on the rent is often seen as “dead money”.428 This money is “wasted” because it can “originally” be used as the down payment for homeownership – the ultimate destination for one’s savings as I shall discuss later.

Young people’s social awareness consists of a subtle understanding of the dominance

of the real estate conglomerates in Hong Kong, and complained about the collaboration

between the real estate conglomerates and the HKSAR government. In the focus group, many

participants speculated about how these conglomerates use the strategy of accumulating

undeveloped land and delaying the selling of buildings to control the housing supply. When

an interviewee, Keith,429 raised this point, two interviewees joined the discussion. First, Paul

speculated that the government has collaborated with these conglomerates430 because “they

are the major source of government revenue. And almost 60 – 70% of the population may

428 Other societies also circulate similar “words of wisdom”. Renting is perceived as a financially unwise choice of housing. For instance, Gurney (1999a) summarized a list of aphorisms in the UK. Similar ones are “It's yours at the end of the day”, “It's an investment for the future”, “Renting's (just) money down the drain”, and “Rent(ing')s (just) dead money.” Gurney, C. M. (1999a). “Lowering the Drawbridge - A Case Study of Analogy and Metaphor in the Social Construction of Homeownership”. P. 1712. 429 Keith, Paul and Angus are from a unique focus group of Frequent Movers in 2016 (Group 12). They are all young adults who are in their 20s to 30s. 430 This observation is similar to Alice Poon’s discussion in her work, Land and the Ruling Class in Hong Kong (2011), as discussed in Chapter 1 Section 1.2.

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probably be working for these real estate conglomerates. These conglomerates have extended their reach beyond real estate, and monopolized many businesses in Hong Kong”. Another interviewee, Angus, then complained about the government not charging tax on vacant properties. To them, this was yet another example that showed the incapability of the government in protecting the livelihood of the population. Their speculation reflects the strong distrust in the social awareness of the government and its integrity in safeguarding the interest of the local population.

The third discursive element is a strong sense of political impotence. The implication is that the government should have worked to provide a better social plane for the younger generation to move forward and connect to the future, yet the government failed to respond to their requests. The criticism of the political system was not only directed at immediate problems, like having better leaders with good will. On one hand, they recognized the leaders of the HKSAR government did make a difference and were the obvious ones to blame. The participant named Parks431 proposed that to make the society more hopeful, at very least, the government and its leaders should show the young adults that they are willing to act and change the future direction of Hong Kong society by going beyond caring only about the sectoral interests. However, Parks found that “the changes” from the top are only lip service:

“but now these people with power are mere hypocrites, and hence the young find they can do nothing besides voicing their request through the failed social movement.”

On the other hand, they were realistic and understood that the structural problems, like the collaboration between the real estate conglomerates and the state will not disappear overnight even if the personnel in the government changed. Moreover, the legitimacy of the

431 Parks was the interviewee who described the status quo of Hong Kong as a pool of stagnant water. He was in Group 7 (2016).

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state requires a long process to establish and accumulate. Tai432 said that merely changing the

head of the government will not change the circumstance at all. “No one thing can change the

society immediately”. Tai added that the population’s confidence in the government must be accumulated through a long process in which people can witness the accomplishments of the government. “The change can never be one-off.” Yet Tai concluded with this statement, “in

Hong Kong, the people's opinion will never be listened by the government.”

Young adults found themselves incapable in changing the social system and

government policy that caused “stagnation” in the social plane, and felt that their voice does

not make a difference after the Umbrella Movement in 2014.433 Alex434 expressed that the

citizens of Hong Kong cannot influence the government's policy at all and connected his

complaint again with the collaboration between the real estate conglomerates and the state

under a corporatist political system. To Alex, this collaboration is the fundamental problem

that can hardly be shaken by their collective efforts,

Perhaps we can influence those minor issues, but we cannot fundamentally break the tight collaboration between the real estate conglomerates and the state. And those non-property owners can only be slaughtered by conglomerates and the rising housing price in this context.

The sense of impotence was shared by other young adults, and together connect to a

sense of hopelessness in changing the political system and social problems. Christine’s435

expression was one that articulated the feeling of impotence clearly,

after the Umbrella Movement, we know that no matter how much we do, we cannot change the reality. No matter how hard we try, how eager we are, the reality just responds: “you don't have the power to change”. So even those dramatic events like

432 Tai was a male working university graduate. He was in Group 8 (2016) in his late 20s. 433 Umbrella Movement in 2014 was the largest social movement in Hong Kong since the 1967 riot, but ended without achieving any closer to the goal of the election of the Chief Executive through universal suffrage. See Footnote 162 for more details. 434 Alex was a male working university graduate. He was in Group 10 (2016) in his late 20s. 435 Christine was a female university student in Group 7 (2016) in her late 20s.

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the movement happened, we still see those problems remain unchanged. I think this is the source of a sense of hopelessness.

The above two sections discuss the imagination of the social plane as stagnation among young adults from different educational and class backgrounds, who have a shared sense of discontent and entrapment. The further question is, does the shared social discontent and the sense of entrapment mean that the young adults have a critical reflection on the capitalist system and the commodification of housing in Hong Kong, and hence reject the financialized game of homeownership? As we shall discuss in the final section of this chapter, such conclusions did emerge in the interviews, but they remain an undercurrent and are not the dominant direction of the discussion among young adults. Most young adults still would opt for homeownership if they have a chance and the ability even though they show a strong sense of social awareness. The rest of this chapter is going to explore how the discourse of “waiting for the coming crisis” and the hope it produces channels people’s discontent through the market. The next section is going to discuss Ghassan Hage’s conception of the discourse – “Heroism of the Stuck” to illustrate how the discontent people experience in the process of prolonged waiting can be channeled into an even more individualized life project in the Australian context.

5.4 Self-government in Waiting – “Heroism of the Stuck” (the Case of Australia)

Thomas Wong,436 following Hirschman's theory, warned us in the 1990s that the tunnel effect is a double-edged sword. At the early stage of economic development, the state may find the citizens surprisingly easy to be pleased because they are waiting with hope. But once the expectations remain unfulfilled for a period, the sense of entrapment or immobility

436 Wong, T. W. P. (1995).

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can have the potential to turn people into “an enemy of the established order”. 437 Similarly,

Hage suggests that “a viable life presupposes a form of imaginary mobility, a sense that one

is ‘going somewhere’”.438 Waiting is the unpleasant condition that people tend to avoid and it

can bring about political consequences in the “queuing in the tunnel” analog I have used.

Hage draws upon Sartre and Badiou to suggest that when the queuing turns into an

endless waiting, it can disrupt the individualization and self-governing effect of queuing. The

crisis of prolonged waiting can provide a shared experience, a topic and a language for a

group of isolated individuals to communicate with one another. In fused discussion, these

individuals find out that the surrounding people are fellows who share the same unbearable

sufferings from endless waiting. This sense of immobility “triggers the questioning of the

existing social arrangement and leads to the social upheaval”.439 With this experiential and

emotional foundation, the isolated individuals can have the potential to form a collective group to complain and find out the reasons behind the waiting, and act to break through the stagnant context.

However, this transition from a group of isolated individuals into a collective group must not be taken for granted. Hage gives the example that the experience of prolonged waiting can be channeled otherwise through a discourse of “heroism of the stuck” and become another self-government project. Hage analyzes the Hansonites440 – the group of

Australian white nationalists’ resonance of a survivor story in a catastrophic landslide – the

Thredbo landslide. It happened in 1997 at a ski resort at New South Wales. A survivor, Stuart

437 Hirschman, A. and Rothschild, M. (1973). “The Changing Tolerance for Income Inequality in the Course of Economic Development”. P. 552. 438 Hage, G. (2009). P. 97. 439 Ibid. P. 104. 440 Hansonites are the group of white nationalists who shared Australian politicians, Pauline Hanson’s right- wing political agenda.

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Diver, buried and stuck under a collapsed building in freezing weather; Australians

celebrated his survival and endurance.

Hage highlights the resonance across the white cultural milieus as “the product of a

form of imagined affinity between the sense of being both socially and existentially stuck that

was expressed by many Hansonites, and the stuckedness of Stuart Diver under the

landslide”.441 In Hage’s analysis, prolonged waiting has become a usual part of life in the

white nationalists he interviewed. Global capitalism now brings about a social context of a

precarious labor market. Job insecurity makes the working culture increasingly

claustrophobic, because people are worrying about losing their jobs, and act as if they were

constantly being watched for mistakes as excuse for layoff. This crisis of “being stuck in

one's job” has become normalcy or a “permanent state of exception”.442

This experience and sense of waiting endlessly are now articulated through a

discourse of “heroism of the stuck” that changes the meaning of waiting.443 This discourse

inverts the image of actors and non-actors in the crisis of being stuck. The heroes are the non-

actors who have the capacity of endurance to wait out the crisis, instead of the supposedly

courageous actors. Today's good citizens should have the capacity and proper manner to

endure crisis as the normal mode of living. Waiting out the crisis becomes a heroic action,

and good citizens can assert agency in the act of waiting in a situation where they cannot do

anything. Those who wait patiently become the civilized heroes “who get stuck in a classy

way”.444 In the Australian context, besides the above “heroic” aspect, this also takes on a

racialized and class dimensions. Those who do not know how to wait and complain or even

441 Hage, G. (2009). P. 100. 442 Pp. 99 – 100. 443 P. 100. 444 Ibid. P. 104.

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take action are not only uncivilized. They are also the “lower classes” and “third-world looking”. To Hage, this becomes a form of self-government that continues to be reproduced amid the prolonged waiting:

It is here that the heroism of the stuck seems to me to signal a deeper form of governmentality, a governmentality that is reproduced even in times of crisis. Even when the bus does not come, even when people are feeling stuck in a queue that is not moving, they heroically keep on queuing. And this is self-reproducing: the more one waits and invests in waiting, the more reluctant one is to stop waiting.445

Likewise, in Hong Kong, we must not take the transition from having social

discontent to questioning the capitalist system for granted. In this research, I identify a

discourse of “waiting for the coming crisis”, in which young adults imagine an external crisis

to be the way to break through the temporal mapping on a stagnant social plane with a

disappearing housing ladder. This discourse consists of two parts: crisis as an imagined line

that connects the present and the future, and a strong sense of self-reliance to survive through

the market.

5.5 The “Coming Crisis”

“Crisis” in the context of this research is different from Hage’s discussion in waiting

out the crisis. Hage conceptualized crisis as the collective stagnation across the population

when queuing fails. Young adults in this research referred to this situation as “a pool of

stagnant water”. Crisis carries another meaning to these young adults. Crisis is an anticipated,

yet unexpected event (like Severe Acute Respiratory Syndrome - SARS epidemic, a financial

crisis, or a terrorist attack), which I termed “the Coming Crisis” within a narrative of

economic cycles. Young adults expect the crisis to be an external disruption of the present

suffocating stagnation, and it will help them move from the present self-reliant subject to the

445 Ibid.

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future goal of homeownership. Meanwhile, this crisis is domesticated under a selective

historical narrative of the housing market – the ups and downs are parts of normal and predictable phrase of economic cycle, and homeownership is eventually the most reliable investment. The young adults welcomed, instead of dreaded, about the coming crisis, and perceived this crisis to be the “once in a life time” investment opportunity that one must seize. Despite strong social awareness, the individualization and self-governing effect remains strong in House Buying. After all, one still has to attend to his individual business and be prepared for the future opportunity of acquiring homeownership.

When discussing their conception of the social plane, almost all young adults in the focus groups shared a sense of gloominess. As discussed in section 5.3, the opportunity

structure is perceived to be narrowing and “unmalleable” when economic development of

Hong Kong has passed the period of rapid growth. The young adults have the social

awareness to recognize the role of government’s policy (including housing policy), speculate

on its collaboration with the real estate conglomerates, and propose that the government

should bear the responsibility to develop a more open opportunity structure on the social

plane. In the meantime, the young adults have a strong sense of distrust towards the

government and a sense of political impotence.

This gloominess is the result of having no ways to break through the stagnant

circumstance. Here the discourse of “Waiting for the Coming Crisis” with a hope effect kicks

in and directs young adults’ discontent and future direction through the market. Only the

scenario of the Coming Crisis provided hope. They discuss this scenario with both genuine

enthusiasm and guilty pleasure characterized by dark humor. One salient future direction they

identify as possible is achieving homeownership after the coming crisis. One interviewee,

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Harris,446 articulates “crisis” most vividly with “hope”. When being asked what can give them

hope, Harris said, “what if SARS or terrorist attack happens in Hong Kong?”

The scenario was supported with a reductionist historical narrative by tracing the case

of SARS epidemic in Hong Kong during 2003. Hong Kong was an infected area where 1,755

cases and 299 deaths were reported. SARS was a critical incident that was often understood

as the rock bottom in the contemporary history of Hong Kong. Political scientists like Ma

Ngok447 would articulate SARS in the Spring of 2003 as one of the turnaround incidents that

triggered the subsequent July 1 march with more than 500,000 participants in the same year;

the march represented the civil society in self-defense. Yet, in young adults’ economic

narrative, SARS was an excellent investment opportunity that they missed because they were

too young at that time. Harris traced the price of the private housing estate, Amoy Gardens

where SARS broke out. The price fell from more than HK$2.4 million in 1997 to

HK$550,000 in 2003, and in 2016, its price had increased ten times and now was almost

HK$6 million. Harris regretted that he lost this “once in a life-time” investment opportunity

because he was too young and was studying in secondary school. Now, he wishes a crisis will

happen again to provide him with the chance of buying a 500-600 sq. ft. property for the

price in 2003.

This economic narrative was selective and reductionist. First, the historical trajectory

of the booming housing market since 2003 consists of contingent elements that cannot be

easily replicated in the future, like QEII, CEPA, and China’ Stimulus Package. Second, the

consequences of negative equity after the financial crisis in 1997 has been neglected.448 And

446 Harris was a male working university graduate in Group 8 (2016) his mid to late-20s. 447 Ma, N. (2007). 448 In 2002, “more than 150,000 families fell into a category of those having negative assets” and “bankruptcies rose, from 780 recorded cases in 1996 to a high of 26,922.” Siu, H. (2008). P. 198.

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third, most importantly, the unemployment rate in 2003 reached the record high at 8.5%,449

and jobs became further precarious since the financial crisis as discussed in Chapter 4 Section

4.4. Some of the young adults indeed also realized the crisis’s effect on the whole economy

that could possibly cost their job, and hence they would not be able to repay the mortgage.

Yet by neglecting these details, the hope effect now embedded within waiting for the

coming crisis, which the participants see as “revealed” in the history of Hong Kong, like the

skyrocketing trend in the rise of housing price as shown in Figure 2.1. The notion that “what

goes down will eventually go up” domesticated the supposedly devastating crisis and its

damage, and highlighted the potential economic opportunity. Other interviewees may not

have articulated a crisis as devastating as SARS, but what in fact the disaster will be and the

actual damage it may cause is not part of their concern or imagination. Indeed, these

problems are not relevant. After all, this is just an imagination. The most important effect of

this narrative was that most of the young adults in the focus groups were waiting and

preparing for the coming economic crisis. The potential opportunity embedded in the coming

crisis gave them hope during this time of waiting. No matter how slim and distant this “hope

in the coming crisis” is, it sustains them to be self-governed, and to continue to work and plan

even as through a gloomy social imagination.

Waiting for the coming crisis consists of an assumption that homeownership is still

the most reliable form of investment that every person in Hong Kong will invest in, and

hence its price would eventually go up again after the coming crisis. Other young adults in

the same focus group with Harris supplemented his economic narrative by referring to Hong

Kong people’s (including their own) belief in homeownership as the preferred housing choice

in Hong Kong. They estimated that people will rush to invest in the plummeting housing

449 See Figure 4.3 for more details.

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market if such a crisis happens. In Chapter 3 Section 3.5, we have discussed the financial

common sense – a belief in “little land, many people” since the early 1970s. This belief was

still dominant among the young adults, even though it has been challenged by leftist scholars

in recent years.450 As Daren said, “Hong Kong people still believe in ‘little land, many

people’, and buying a house is the best way to get rich quick. Even gold is not as good as

property in terms of being an investment.”

Two characteristics emerged in their conception of property as an investment: first,

house buying is “risk-free” when weighed against other investment tools, and second, a house

is the proper destination of one's savings. In the first characteristic, house buying is the most

reliable form of investment choice that one can hold onto without a second thought amidst

the unpredictable financial market. This belief goes against the perspective of professional

financial management. From that perspective, an investor should diversify risk into different

investment tools because the market is difficult to predict.451 However, the investment strategies these young adults shared concentrates all the risk in one investment object – real estate, which is locationally fixed and is prone to social and political instability.

Homeownership is now more than an ordinarily good investment as it was in the

Formative Period. These interviewees articulated that homeownership is too “risk-free” to even be considered as an investment, while any investment is imagined to be risky. In the focus group, we asked a hypothetical question: if you earn HK$300,000 (USD$38,560) a year, how will you make use of this income? In general, people's responses were cautious towards investments, and interviewees generally put a big portion in savings. Kelly452, the

450 Like the series of publication by the Liber Research Community (2013), (2015) & (2016). 451 Smith, S. J. (2015). “Owner Occupation: at Home in a Spatial, Financial Paradox”. 452 Kelly was a female university graduate who worked in the finance sector for a few years. She was in Group 2 (2014) in late-20s.

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finance worker in her late 20s, put more than half of the annual income (HK$180,000) in

savings. When asked if this portion of money could be used for investment, she clarified,

“this portion of money all goes to savings. It won't be used for investment at all”. Kelly's

reasoning is that,

In investment, one can gain or lose. I have tried to invest before, but the loss cannot be covered by the gain. And some of my friends, who are older than me for around 10 years, also think that one cannot gain a lot from investment. Hence, putting the money in savings is more secure.

But later she elaborated more about her ideas in investment, savings and risk. Other

investments, like stock exchange, were as risky as speculation or gambling. One must spend a

lot of time on research to make speculation become investment. She could not afford the

time, and hence she put all the money in savings as the future down payment.

At the right moment, I prefer buying house. Thus, if you rent, the money is spent merely as expense.453 If one goes on renting until retirement, after 60 years it is still a kind of expense only. But if you have bought it, then you'll have finished all the installments by that time. You simply live there and pay the rates (the property tax) and government rent to the state. I think this can be called “The investment”.

In this sense, Kelly's savings aren't merely savings after all. It is the preparation for

future house buying. And “the right moment” is the moment when the coming crisis brought

down the housing price. All other kinds of investment were regarded as unreliable in her

conception unless one can do the homework to reduce the risk by acquiring related financial

knowledge. House buying is different. This doesn't involve extra homework in her

imagination, and indeed it is a no-brainer when comparing to other options for one to invest

money in. It stands out as an investment for its reliability with no risk at all, and one can hold

on to this asset after retirement. Kelly works in banking and supposedly has more financial

knowledge than ordinary people, yet to her, saving a large portion of money in the bank and

453 Other societies also had similar ideas about rent as dead money. See Footnote 428 for more details. Gurney, C. M. (1999a). “Lowering the Drawbridge - A Case Study of Analogy and Metaphor in the Social Construction of Homeownership”. P. 1712.

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waiting for the right timing to achieve homeownership is the best and most risk-free investment strategy.

Homeownership as the most reliable investment was often accompanied by metaphors of liquidity and fixity. Capital should remain in its liquid form as savings, until it has the chance of entering into the housing market and being fixed in the form of homeownership.

Jim454, a university graduate with a few years of experience also in the finance sector, put a

large portion (HK$200,000) into savings, which is two thirds of the hypothetical annual

income. His reason was that “in Hong Kong, buying bricks is more reliable in terms of value

preservation than stocks.” He continued to elaborate,

The stock market is too fluctuated, and we are only small investors. Hence, I would rather put the money as savings. …With this plan I can save $400,000 in two years, which is not bad. I'll put them in a time deposit, with a bit more interest. But I won't put the money in investment, like a plan of life insurance with savings. Those plans will freeze your money for a long time and I can't use the use money. Although at this moment, the interest rate of savings deposit is zero, at least you can use the money whenever you need to. If chance comes, then you can enter the housing market and buy a house.

Jim's emphasis on how important liquidity is to one's capital expands on Kelly’s

reasoning. He is going to catch the next opportunity to buy a house when the chance is right

(thus when the crisis finally comes) following the aforementioned ups-and-downs of the

housing market. The money in savings must be ready at any moment for this use. This

emphasis of liquidity meets the metaphor of fixity in Jim's discussion. Kelly's sense of “risk-

free” is put metaphorically by Jim as “bricks” in describing the reliability of house buying as

an investment in relation to the preservation of value.455 In Jim's conception, money should

454 Jim was in the same group (Group 2 – 2014) with Kelly. He was in late-20s. 455 In English language, “bricks and mortar” is also a metaphor about the stability of homeownership. But it is used to emphasize the physical structure of a shelter, and less related to its reliability as an investment object. For instance, Gurney (1999a) cites one dialogue between a couple when reflecting on housing and the sense of security. When they taught their daughter about what home is, they recall that “She put that it’s where you feel safe, that it’s not just bricks and mortar. It’s where people love you and it’s yours, and you’re safe no matter how many horrible tantrums she throws!” And they added, “There’s no place like home!”

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take the form of a house as its destination, instead of savings, to preserve its value and purchasing power in the context of rapid asset inflation in the booming housing market of

Hong Kong since 2008.

The young adults recognize that the real-estate driven capitalist system in Hong Kong will not easily go away even if the coming crisis does happen. The coming crisis serves only

as a one-off investment opportunity for the left-behind younger generation to catch up and

share in a chance to become one of the vested members of the population. Like Joey456 said,

“even a disaster cannot change the social system fundamentally.” The wealth of the Hong

Kong society will continue to be concentrated in the hands of the older generation who hold the properties. The vested interest will continue to disregard the discontent and suffering of

the younger generations. And the propertied class takes advantage of this unequal distribution

by renting out their properties. Joey concluded at last,

Should the world be like this? It depends if you or the one besides you are the vested interest group. If you are one of them, then of course you will accept this.

5.6 Self-reliance – Buying a House as a Shackle and/or a Safety Net

The previous two sections discuss a temporal mapping which combined a social

imagination of a stagnant social plane, and a coming crisis to be the imagined line that

brought about a future investment opportunity. No matter how distant, slim and nebulous this

hope in the coming crisis is, the young adults are preparing themselves financially to catch

this future opportunity when it comes. Even though the future of Hong Kong society is

gloomy, at least the personal future feels changeable through the hope of the coming crisis.

Thus, being stuck and having stronger social awareness do not automatically turn people into

an enemy of the established order. Through “waiting for the coming crisis”, the individualist

456 Joey was a female university graduate who has a few years of working experience. She was in Group 8 (2016) in her mid-20s.

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subject formation of being self-reliant is still pervasive among young adults in the focus groups within the context of a strong distrust towards the government and its housing policy.

What differs between the 1970s – 1990s and today is that while young adults are self-reliant, today’s young adults do not explicitly articulate that they are aiming at achieving the middle- class good life. Rather, within the stagnant social imagination, they articulate the reason behind the goal of acquiring homeownership to be a seemingly contradictory image of a safety net – being simultaneously a shelter to live and financial tool to rely on. As discussed in Chapter 4 Section 4.4, this shift accompanied a change in the official government discourse; the meaning of “self-reliance” changed from “not using the government’s social welfare” to “owning a house as the financial tool to solve personal problems” since the late

1990s.

This section probes further into self-reliance and how homeownership and people’s imagination towards the future are articulated together. Homeownership is often attached to multiple, and often self-contradictory meanings.457 At the core, a reference to house buying

collapses two choices – owner-occupier and real estate investment, each with its own lines of

calculation and meaning. Owner-occupier is a housing choice that is different from other forms like public and private rental, and real estate investment is a financial decision as

opposed to other investment decision including stock market, loans, and cash deposits. Both

owner-occupier as a housing choice and real estate as an investment decision create a tight

connection to the locality and in time. Through acquiring private ownership rights and a

mortgage, the house buyers are tied in time under a fixed term in paying the installments, and

are presumed to stay and live in this place in the long run. The use and exchange value of

457 For instance, Smith (2015) summarized, “a stream of locationally fixed services purchased to meet basic needs, an object of consumption bought for enjoyment and use, and a space that adds meaning to life, will, in its lumpiness and indivisibility, also deliver reasonable and reliable financial returns’, is intuitively self- contradictory. However, owner occupation is de facto such a paradox, and uniquely so.” Smith, S, J. (2015). “Owner occupation: at home in a spatial, financial paradox”. P. 63.

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their house is also tied to the local community, the prospects of the surrounding environment, and the stability of the society.

This fixity of homeownership towards one’s future life planning can be interpreted very differently. Two seemingly opposing facets emerged in the discussions among the young adults in this research – housing buying as a shackle to one’s life opportunity or as a safety net458 in securing potential life chances. This was particularly salient among the

middle-class and would be middle-class who cannot enjoy the public housing that was

provided by the government.459 However, both images of shackle and safety net are indeed

two sides of the same subject formation – self-reliance.

The image of being shackled is derived from the fear of being constrained by the

long-term commitment in the form of a mortgage. Following the collapse of the housing

ladder, the middle-class and would-be middle class especially find themselves trapped in-

between public housing and private homeownership. Wendy460 worked as a professional for

ten years. She withdrew from the goal of homeownership because it would drain her savings

and insurance. Her depiction of being self-reliant was about relying on one's individual

ability to earn enough money, pay the medical insurance plan, and save enough for

retirement. The skyrocketing housing prices and the increasing cost of a down payment could

cost her all the savings she had. Wendy expressed her worries,

If I bought a house, everything I do would be for the house. I think the young professionals is the helpless group. We don't have subsidies at all. We need to take

458 Allon (2015) also discusses the use of asset as safety net in the American context. “Asset-acquisition was thereby reconfigured as a de facto form of welfare, encouraging households to rely on asset-price appreciation as a safety net, a contingent solution for all possible financial needs”. Allon, F. (2015). “Everyday Leverage, or Leveraging the Everyday”. P. 698. 459 The young adults’ who had lower educational level confessed that they would opt for public housing, while those young adults whose parents are homeowners have shown a lesser urgency to solve their housing problem. 460 Wendy was a female university graduate in her late 20s in Group 11 (2014).

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care of ourselves like insurance and retirement… Adding these costs together, I have given up homeownership because I cannot afford it after paying insurance.

Committing to homeownership and the mortgage produced a sense of entrapment in

not only the housing choice, but also in their career. Another professional in the same group,

Kathy461 has the savings for a down payment, which is often around HK$1,500,000 (around

USD$200,000) in the current housing market. But she perceived it to be too risky to invest all

her savings into homeownership because she could not afford to be unemployed or resign

under the need of repaying mortgage with any savings, and hence she would be trapped in the

present job. The fear for this group of young professionals is two-fold: on one hand, if they

commit to homeownership, they will be deprived of other opportunities in life, like changing

to a job that is more interesting but with less income, or resigning to explore other ways of

living; on the other hand, they cannot afford losing the job, and thus will have more pressure

in holding on to the present job for the sake of paying the monthly installments. Thus, Kathy

said, “when you have bought the house, you'll have the pressure to hold onto this job for the

whole life.” Homeownership in this sense is a trap that makes life planning inflexible, or even

claustrophobic under the pressure of repaying the mortgage loan when the housing price is way too high.

The image of a safety net is connected with the social use of homeownership as a shelter and the economic use of homeownership as a financial tool. This image seems to be

contradictory – a house to be used simultaneously as a shelter and sold as an asset. This

contradiction was reconciled when a booming housing market is taken for granted. Informed

by the historical narrative of the housing market, focus group participants foresee that

homeowners, just like those who bought a house in the 1980s and during the SARS epidemic,

can enjoy the inflated housing price. In this image of the housing market, having the

461 Kathy was a female working university graduate and a professional in Group 11 (2014).

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ownership of a house is an asset that can accumulate wealth through the inflated housing

prices even though it is only on paper for the time being. In this imagination, one can scale

down to a cheaper flat in the future, and use the wealth gained as retirement funding. For

instance, Lillian462 clearly described a property to be a financial tool for retirement,

A property is an asset, an investment. You'll find that having a property in this booming market, its value will appreciate no matter what. And even if its price doesn't go up, at least it is an asset. When you are old, you can rely on it. You can even sell it for living expenses for retirement.

An apartment can also potentially become a flexible source of capital in critical conditions.463 Financial tools, such as re-mortgaging as emergency fund and a reverse

mortgage as retirement fund, make such scenario possible in people’s future planning. This is

also how the banks promote these two types of mortgage. For instance, Bank of China

highlight the financial benefit from taking out a loan at any time – “you can make use of your asset to satisfy your needs.”464 These needs include immediate consumption, or future

planning – “to decorate your house or travel around to improve your living standard; or you

wish to fulfil your goals of further education or starting your own business.”465

The basic idea is to take advantage of the inflated housing price that takes the

appreciation of the housing price for granted:

A property owner purchased a HK$4,000,000 property with mortgage loan amount of HK$2,400,000 (60% of appraised property value) three years ago. Today, the latest appraised property value is HK$4,500,000 and the mortgage loan outstanding is HK$2,200,000. The owner can… loan up to 60% of the appraised property value (i.e.

462 Lillian was a female university student in Group 3 (2014). 463 As Saunders (1990) summarizes, home owners “can raise further mortgages on their houses (to buy a car or a country cottage perhaps), or they can sell their houses and use the proceeds as down payments on bigger and better houses, or they can purchase annuities when they retire if they move to smaller and cheaper houses at that stage in their lives”. Saunders, A. (1990) A Nation of Home Owners. P. 163 464 Bank of China. (2018). “Mortgage Further Advance / Refinancing Service”. 465 Ibid.

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HK$2,700,000), deducts existing owed HK$2,200,000, the available cash out amount will be HK$500,000.

Reverse mortgage is designed as a kind of retirement fund for people who are aged 55

or above and own a property. It is provided by The Hong Kong Mortgage Corporation

Limited, which its shares were held by the HKSAR government. The Introduction of its

leaflet highlights its function of being a pension as well as a shelter simultaneously.

Reverse mortgage is a loan arrangement. It enables you to use your residential property (or more than one residential property) in Hong Kong as security to borrow from a lender. You will remain as the owner of your property and can continue to stay in your property for the rest of your life.466

Based on these financial tools and the beautiful future scenario it depicts, Eva467 proposed that, to those who are from the lower-class like her, having a house has a practical function. It can be a financial resource if an emergency happened to her and her family, such as a family member falling ill. Hence, she prioritized having a house more than achieving wealth accumulation. Homeownership can be used to fulfil her responsibility towards the family because it can become the reserve capital that her family members can rely on.

Doris468 bought a house just before the focus group discussion. She also imagined it to be the self-reliant safety net under the conditions of limited social welfare and no retirement program from the government.

If one doesn’t own a property, when one gets old, who are going to feed this person? To me, I will find it worthwhile. Just one to two months ago, I brought a property. That’s a real concern. You ask me if it is worthwhile? Absolutely, because it is a need.

This image of a safety net often neglects the hardship of homeownership in history.

For instance, the bank lending rate has been 5% since 2009. However, when the interest rate

466 HKMC Insurance Limited. (May 2018). “Reverse Mortgage - Brightens up your retired life”. 467 Eva was a female university student in Group 7 (2016) in her early 20s. 468 Doris was a female university graduate who worked as a professional for a few years. She was in her mid-20s and was in Group 8 (2016).

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increases, the burden of repaying the mortgage would increase as well. In the past, the interest rate of mortgage has reached almost 20% in Oct 1981, and fluctuated from 5% to

15% throughout the 1980s and 1990s. (See Figure 5.2) The maintenance fee of

homeownership can be high as well. Reports have shown that the elderly who achieved

homeownership in the past faced difficulties when their apartments and the building are now

in urgent need of renovation.469 These shortcomings have been neglected in their imagination towards the future with homeownership.

Figure 5.2 Best Lending Rate (1980 – 2017).

Source: Hong Kong Monetary Authority. (2018). Monthly Statistical Bulletin (June 2018 - Issue No. 286)

Underneath these two seemingly opposing ideas about homeownership as a shackle or a safety net is a taken for granted sense of self-reliance – you are on your own with your money or your asset. And these ideas can indeed coexist under the hope of waiting for the coming crisis when the market is still believed to be the savior of the individuals. The image

469 Hong Kong Connection (2006). “People under the Roof”. HK: RTHK. (in Chinese)

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of the shackle can be resolved through the coming crisis as the core concern was only about young adult’s ability to afford the housing price. As Wendy said, she gave up the goal of homeownership just because she could not afford it. They have not fundamentally challenged

the commodification of housing or the dominance of private property rights. Once these

young adults can afford the housing price after the coming crisis, they may join the game of

house buying as well. The savings they had can soon become the down payment if the “right”

moment of house buying finally comes.

5.7 Undercurrents besides House Buying

One possibility of House Buying as a hope mechanism as shown in this chapter was a

self-reliant subject that treats homeownership as a future safety net, which was different from

those in the previous era who treated it as the symbol of the middle-class good life and waited

for their turn of social upward mobility to come. House Buying is now grounded in a more

politicized imagination of a stagnant social plane with the hope of waiting for the coming

crisis. This hope also carries the individualization and self-governing effect while people’s

worries and discontent is imagined to be solved by being an individual subject of self-reliance

– they can continue to work hard and save in their present condition even if they are

discontented about the status quo. When the coming crisis comes, they can then catch their

personal chance of homeownership with their savings even though the future of the Hong

Kong society as a whole is gloomy. Being stuck in an imagined stagnant social plane with a

collapsed housing ladder does not necessarily turn people into an enemy of the established

order.

Yet, this hope mechanism is delicate. Undercurrents of skepticism about the market

and House Buying already exist. In the focus group discussions, we can observe at least three

sets of articulation – seeing public housing as a viable housing choice, migrating to other

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places as an alternative, and taking the crisis to be a rupture in the capitalist system. First, in

the past, the housing ladder assumed an upwardly mobile path, and public rental housing was

at the bottom of the ladder. The widespread perception was that those capable should not rely

on the social resources from the government. Now public rental housing is perceived not as a

shameful choice for the lower class, but is also seen as an important safety net among the

young adults. King470 argued that the young applicants for public housing are just keeping

open an emergency door for themselves.

I think those young people who apply for public housing want to prepare an emergency door. They submit the application and queue up for the public housing unit first. If by the time they get the unit and they don't need it, they can just give it back. Thus, you won't know what will happen a few years later. Perhaps your family finance will fall apart in the future, and at that time you really need that housing unit. No one knows. I am not someone who prepares for the future, but at least public housing unit can shelter you. And that's important.

Likewise, Wing’s471 father also advised her to apply for public housing. She said, “it

is just for ‘security’. If an emergency happens, even for a medical student, it's a viable choice

even if one must wait for 10 years.” Gigi,472 a woman in her late 20s, said she did not aim at

achieving social upward mobility, and celebrated the quality of public housing.

The private housing is now too expensive. I asked my little sister to apply for public housing together with me immediately after she reaches the age of 18. Because in this era, I am sure that I can't buy a house. In the past, people look upward. But now, having a public housing unit is good enough.

Migration is another viable choice. Opting out of the Hong Kong society and migrating to another place has become a viable option besides being self-reliant through the

470 King was a male associate degree student who was in his early 20s. He was in Group 6 (2014). 471 Wing was a female university graduate who has worked for a few years in her late-20s. She was in Group 1 (2014). 472 Gigi was a female associate degree who has worked for a few years in her late-20s. She was in Group 5 (2014).

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market. Katy473 said that even if she won a lottery of a few million HK dollars, she would rather use the money to migrate to Taiwan, a place with Chinese culture and democratic

system while the living costs and housing price are much lower than Hong Kong. The

stagnant social plane and the political impotence causes her despair about living in Hong

Kong: “it’s like I cannot find a reason to put effort into this place. It’s like whatever I do is

meaningless, whatever I do will be in vain.” Another interviewee in the same group, John,474 said that even if the economic prospects of Hong Kong are good and going in a good direction, this doesn’t mean that you’ll have to stay in Hong Kong. “You have other options like, I can choose to do agriculture in the countryside in other cities.” Katy immediately added her discontent over the inequality in the social system as she cannot share the benefits,

“even the economy is good, but we cannot get a share of economic success. The rich will continue to be rich, and the poor will continue to be poor. Their richness is not relevant to me.”

The last approach welcomes the “coming crisis” not as an investment opportunity, but as a rupture to the status quo. In this view, the local population should stop participating in the distorted system in which one can only barely survive in the existing system, instead of living in the full sense. Jaden475 represented a voice among participants that welcomes the revolution: “So what's the point to go after this kind of survival? We just keep looping in an endless grey cycle.” Crisis was welcomed in this image, yet consisted of an imagination of a

“destruction” of the existing system and status quo as it is socially unjust. Its stability will reproduce more injustice. “If we don’t shake it and break it down, we cannot change the

473 Katy was a female university graduate in her mid-20s with a few years working experience as a freelancer. She was in Group 10 (2016). 474 John was also in Group 10 (2016), and was a male university graduate in his mid-20s. He worked a few years in media industry. 475 Jaden was in Group 9 (2009). He was a male university student in his mid-20s.

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situation. This distorted system may let us survive in a disrespected way. But to me, let’s

finish off everything and end the current system, so that we can start a new round of the

game.” Yet this view that equates the coming crisis as a revolution against status quo is not the dominant voice in the focus group. Jaden is the only interviewee among the 73 interviewees who actively articulated the need of revolution to disrupt the system.

At this moment, the dominant hope mechanism is still about waiting for the coming crisis; yet young adults are exploring other possibilities as well. The above alternative voices

are visible, and have not encountered serious objections in the focus group interviews even

when the “destruction” of the status quo was raised. This was unimaginable between the

1970s and the 1990s when maintaining the stability of the status quo was the consensus

across the population. With a stronger sense of social awareness, people can indeed

understand the reasons behind such a claim even if they do not agree with overthrowing the

status quo. In the next chapter, we are going to venture into the theoretical discussion of

hope, and reflect on the contribution of this research.

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Chapter 6 – Discussion

In this conclusion I aim to extend the discussion of House Buying and, in doing so,

venture into the theoretical debates about hope and ask, what is the nature of hope in House

Buying? Ghassan Hage proposes that the debate of hope is generally divided into two camps

– hope as passivity and joy-deferral, and hope as activity and life-affirming.476 The first camp

is oriented around criticism of the dream of achieving the good life goal. This is based on the

premise that the external goal will divert us from addressing our life problems in the present.

This camp asks, is hope towards the good life merely an empty promise that holds us back

from reality and reckoning with social inequality? The second camp of thinkers considers

how the go-getting, active social subject is formed. It discusses how the creative life force may be channeled.

In the sections that follow, I will first outline the claims behind these two ways of thinking about hope. As I have shown in this research, rather than discussing if the nature of hope is good or bad at the abstract level, I discuss the concrete mechanism of hope that is often intertwined with the context of a society. By approaching hope from this angle, we can see that both types of hope can indeed be part of the same hope mechanism, highlights different elements – the life goal and the subject formation. In other words, the proposal of a hope mechanism in this research reconciles the dichotomy by putting these two elements together. It gives us a fuller picture of how hope is produced, and traces the historical, social and cultural context that makes such hope mechanism emerge and work.

476 Hage, G. (2003). “On the Side of Life: Joy and the Capacity of Being.” P. 151.

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Finally, I evaluate if hope from waiting for the coming crisis is necessarily “bad” because of its individualizing and self-governing effects. My answer is ambivalent. This form of hope apparently is passive for sustaining the status quo, but it also serves as a valuable

resource for young adults to survive the negative experiences that arise from what they

perceive to be a stagnant social context. This hope has not erased their social discontent.

Once the crisis comes and if it is beyond their imagined domesticated scope, the consequence

could be very different from the present assumptions they have in mapping their future.

6.1 Passive and Active Hope

Nietzsche reminded us long ago that not all goals are worth pursuing. For instance, an

ascetic ideal is a goal in which life “turns against itself” and “denies itself”, for such a life is

merely a bridge for the religious hope of the ascetic priest.477 But people still pursue it to

overcome their existential crisis that life has no meaning at all. To cope with this

meaninglessness, no matter what that goal is, “he needs a goal – and he will sooner will

nothingness than not will at all”.478 This kind of hope is not restricted to religion. We can

observe it also in the promise of delayed gratification which is common in modern middle-

class values. In this version, one tolerates the immediate suffering and social inequality for

the goal of future social upward mobility. Suffering is inevitable in the journey, and joy lies

far away at the top of the ladder or the end of the tunnel.

This joy-deferral or passive hope is often questioned for its political implications; it

encourages passivity and limits our imagination of future possibilities. Braune479 uses

consumerism as an example of this. She argues that consumerism packages objects one after

477 Nietzsche, F. (2012). The Genealogy of Morals. P. 83. 478 Ibid. Pp. 67 – 68. 479 Braune, J. (2014). Erich Fromm’s Revolutionary Hope: Prophetic Messianism as a Critical Theory of the Future. Springer.

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another, through which commodities function as future goals for people to desire. However,

to her, the consumers are passive – what they are aiming for are merely someone else’s

design. In her words, they merely want “to ‘drink in’ the world rather than transform it”,480 and this displaces “the experience of creativity and of being in relationship with others”.481

These objects distract our attention from the present social problems, and discourage us from improving our self and the social world. As a result, social inequality is tolerated and the status quo is legitimated.

Likewise, Hage proposes that capitalism “hegemonises the ideological content of hope so it becomes almost universally equated with dreams of better-paid jobs, better lifestyle, more commodities”.482 Ahmed also summarizes a list of good life goals, including “a

stable relationship, a successful job, a beautiful house, a child”.483 Most often these goals are

articulated with one type of dream – upward mobility. This upward-looking dream becomes

the shared cultural imagination that people use to make sense of their ways of social mobility.

Acquiring or accumulating certain things and reaching this or that milestone is linked to the

sense of movement on the social ladder. By observing these benchmarks, people can make

sense of the direction of their movement – upward, downward or horizontal.

Nietzsche, Spinoza and Fromm proposed another form of hope – hope as active and

life-affirming. In this tradition, hope is not merely a noun for the belief in achieving socially

assigned goals and acquiring the subsequent benchmarks of the good life. Rather, hope

assumes a social subject that embodies effort, devotion and investment. It should also be

understood as a verb that represents the active action of creativity and courage to connect the

480 Ibid. P. 118. 481 Ibid. 482 Hage, G. (2003). Against Paranoid Nationalism: Searching for Hope in a Shrinking Society. Pp. 13 – 14. 483 Ahmed, S. (2010). The Promise of Happiness. Duke University Press.

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social with one’s life.484 Drawing from Spinoza, contrary to passive hope of acquiring

external objects, Fromm suggests that hope should be understood as a person’s will “to

develop his reason and his objectivity of a sense of himself that is based on the experience of

his productive energy”.485 A sane society is one that furthers people’s capacity to love, to work and create, Fromm advocated. And if hope is not a static prediction of the future as delayed gratification or ascetic ideal implies, then it involves a temporality that views the

present moment as “a state of pregnancy”486 from which “possibilities for the future are

inscribed into the conditions of the present”.487 This sense of time is open-ended, like Bloch’s

insistence, “hope must be unconditionally disappointable”.488 The radical open-endedness

urges people to bring the present and the future together, because what we do and invest in

today helps materialize our future.

Hage points to the joy that one receives from achieving betterment in this active hope.

“Joy comes from a simple change to the better in the state of the body. That is, it is an

experience of reaching a higher stage in the capacities to act, associate and deploy oneself in

or with one’s environment”.489 Sennett’s idea of craftsmanship490 can help us further

elaborate this perspective. In his conception, a craftsman (like a cellist) gains self-realization

through devoting time, effort and affect into an external, objectified work in a disinterested

attitude – doing something good for its own sake. For instance, a cellist imagines his/her

future work in the process of practicing and making. He/she also carefully examines and

484 Braune, J. (2014). Pp. 132 – 134. 485 Fromm, E. (1994). “Some Beliefs of Man, in Man, for Man.” 486 Fromm, E. (2011). The Revolution of Hope. 487 Grossberg, L. (2005) Caught in the crossfire: kids, politics, and America's future. P. 309. 488 Bloch, E. (1998). “Can Hope be Disappointed?” P. 341. 489 Hage, G. (2002). P. 152. 490 Sennett, R. (1998). The Corrosion of Character: The Personal Consequences of Work in the New Capitalism; Sennett, R. (2007). The Culture of the New Capitalism. Sennett, R. (2008). The Craftsman.

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evaluates the finished product, and reflects on the quality of one’s skills. Thus, craftwork becomes the object that accumulates time, effort and affect. It is the crystallized labor and the objectified self that closely connects the past, present and future in a hermeneutic circle.491

Through devoting to and investing in the craftwork, one enjoys betterment by embodying the improved skills. He/she gains dignity and establishes character from the objective evaluation of the quality of work that represents him/herself. People can then expect future improvement in their ability and capacity within such a society.

6.2 Hope as the Resource of Survival

Hage, while distinguishing the above two approaches, proposes three ways of conducting research on hope. The first way is to criticize how “capitalism reduces the ethic of joy to an ethic of hope and deferral”,492 and take up the political project to reinstate the active hope that affirms life. The second way is to criticize the ideologies of capitalism that “reduce hope to dreams of upward mobility”.493 My research follows the third way that begins “by

accepting whatever hope capitalism has to offer”494 and looks at how even this “truncated”

hope is produced and distributed unevenly amongst the population.

My research has not argued if hope is genuinely passive or active in nature. I understand that life force has always been channeled through the socially defined life goals and subject formation, and both passivity and activity of hope co-exist in any given time and space, yet with different weighting. The objective in this research is to reveal the historically

491 Tweedie, D. (2013). “Making Sense of Insecurity: A Defence of Richard Sennett’s Sociology of Work.” Pp. 97 – 98. 492 Hage, G. (2002). P. 152. 493 Ibid. 494 Ibid.

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contingent context and mechanism that makes the current life goals and subject seem to be a

natural, unshakable truth.

In the context of Hong Kong, House Buying in the Formative Period happens to consist of both external life goals and internal self-reliant subject, and was connected to the

imagination of the social plane and the imagined line or path that directs the subject towards the life goal. Being self-reliant as an active project has been connected more to individualism than to collectivism in this context, and was indeed achievable to a certain extent for a limited time. Those homebuyers in this period perceived themselves to be the active author of their life in the acquisition of an apartment – an external object as material proof – following years of effort. They enjoyed the pleasure of choice and independence in making good decisions of working hard and investing wisely.

In recent years, House Buying has become increasingly unattainable, like the carrot in front of the donkey, and young adults have lost the sense of being the active author of their life. Berlant495 uses the concept “cruel optimism” to describe the attachment towards

unattainable life goals. This attachment simultaneously sustains people’s existing ways of

living, yet obstructs their “flourishing”.496 My research offers an empirical answer to the way

of upholding the attachment to the unattainable dream of homeownership – through the

discourse of “waiting for the coming crisis”, House Buying as a hope mechanism still

495 Berlant, L. (2011). Cruel Optimism. 496 Ibid. P. 1. In an interview, Berlant cites a destructive love affair to be her favorite example to illustrate the contradictory sentiment in this kind of attachment, “If I leave you I am not only leaving you (which would be a good thing if your love destroys my confidence) but also I am leaving an anchor for my optimism about life (which is why I want to stay with you even though I’m unhappy, because I am afraid of losing the scene of my fantasy itself).” Berlant, L. (2012) “On her book Cruel Optimism”.

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manages to sustain and produce the political effects of individualization and self-governing amid increasing social inequality, even though it has become delicate.

Is the hope in waiting for the coming crisis necessarily a “bad” thing because of these effects?497 I am ambivalent when reflecting on my own experience. I have been a part-time

lecturer for four different academic institutions since 2012. The contracts are temporary and I

will not be notified in advance if the course that I am teaching is not going to be offered in

the coming semester. Every several months, I will have to rely on my personal network to

find the next work opportunity. Sometimes I imagine myself to be a pub singer in different

bars and pubs when I get on the stage in the lecture theatre. The sense of insecurity is

deepened when the private rental housing estate that I am living is rumored to be part of the next reconstruction project by one of the real estate conglomerates. My parents and I may

become homeless as we are only tenants and may not be compensated. And our income

exceeds the income ceiling to apply for the public rental housing. The present life and living

standard is indeed satisfactory, yet we never know how to connect to the future. This is the feeling I share with my interviewees about the depiction of a pool of stagnant water. This depressing feeling is somehow compensated by the hope that one day I can finish the doctoral dissertation, become middle class, and can save more money. Most importantly, as my mother tells me constantly, “when the next financial crisis comes, then you can catch the chance and buy a house”.

I understand the problems underneath such hope and belief in House Buying (which I have already discussed in Chapter 5). And the unequal social structure which “a certain available hope for someone is built on the sucking of the very possibility of hope from

497 This route can be further studied in the future in relation to Grossberg’s conception of “modes of survival”. 174

someone else’s”498 has not been challenged. However, we should not underestimate the use of

hope. Even though House Buying has lost its active role in affirming people’s life

achievement, it still helps people survive through the shared sense of social stagnation and

political impotence. I gain this insight from Zigon’s ethnographic research499 in the Muscovite

context under a moral breakdown – “those moments when social and moral life is reflectively

and consciously called into question and posed as a problem.”500 The interviewees in Zigon’s

research were aware of the contingency in realizing the hopes, which depended on “God and

the Church/Seminary”.501 But as a day-to-day project they act continuously, to “pray, confess,

attend classes, study hard, actively avoid alcohol”.502 Through these actions, they continue to prepare “the best possible situation” for the realization of hope.503 Thus, in his treatment,

hope is a kind of resource for a day-to-day project of living that “is not necessarily aimed at

the future good, but primarily at the perseverance of a sane life”.504 This way of treating hope

was grounded in the broader historical context since the Soviet period. At that time, “the call

to work on oneself”505 had been prevalent in everyday and institutional contexts. This extends

into today’s conceptions of personhood in post-Soviet era. In the case of Hong Kong, in the place of “praying” and “confessing”, the relatively better educated young adults like me are working and saving, and preparing for “the best possible situation” for the coming crisis.

Zigon focuses on the daily use of hope in enabling one to continue to work and move forward. Here I share his proposal, that we must not understand hope only as a potential

498 Hage, G. (2016) “Questions Concerning a Future-Politics”. P. 466. 499 Zigon, J. (2009). “Hope dies last - Two aspects of hope in contemporary Moscow”. 500 Ibid. P. 258. 501 Ibid. P. 257. 502 Ibid. 503 Ibid. 504 Ibid. P. 258. 505 Ibid. P. 261.

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revolutionary force, but also as a resource for people to maintain sanity and fight against despair.

I hesitate, however, to limit hope to an attitude that is always or for the most part hope for something better or ideal. For my research suggests that hope as articulated by my Muscovite interlocutors is not primarily aimed at a better life or attaining the good. Nor did anyone articulate utopian, activist, or progressive aspirations. Rather, much of the hope articulated to me was similar to how some have recently described agency as an aim toward continuity, stability, or living sanely.506

I am aware of the effects of individualization and self-governing in that they can be

utilized to maintain the status quo, uphold the capitalist system and fuel the housing market.

However, we should not forget that having hope through “waiting for the coming crisis” has not erased young adults’ discontent over the social system. After all, at this present moment it only channels our unhappiness towards being self-reliant in the housing market. The

discontent has not gone away, and should be seen as the water in a reservoir that continues to

amass if the coming crisis does not come. Social discontent can be channeled otherwise when

a critical event happens. The present condition of stagnation reminds me of Hobsbawm’s

conclusion in The Age of Empire, when the wars in the 1910s appeared “as a kind of

deliverance, a hope that something different will come” that could end “the superficialities

and frivolities of bourgeois society”.507 As I discussed in the last section of Chapter 5, the

traces of other discourses have already been there once the critical event happens. But we are

never sure what different future this event may bring.

506 Ibid. P. 257. 507 Hobsbawm, E. (1987). The Age of Empire: 1875–1914.

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