Hong Kong - the deepest rich-poor gap in 40 years

The gap between rich and poor in Hong Kong is at its highest level in nearly four decades.

Nearly one million Hong Kongers live in poverty, according to government figures released in 2015. Photo: SCMP.

On July 1, Hong Kong people will celebrate the 20th anniversary of Hong Kong's official handover to China after 156 years of British rule, but Lau Mei-tin, a vegetable vendor at the market, is in no mood to celebrate, Reuters reported.

Life in Hong Kong's financial hub is increasingly expensive, forcing people like Ms. Lau to work hard to make ends meet.

"You have to work until you die. If you don't work and work, you won't have enough money to cover your daily living expenses," Ms. Lau lamented.

"Life in Hong Kong is terrible now."

According to statistics, the level of income inequality between social classes in Hong Kong has reached its highest level in more than 40 years. Last year, with a population of 7.3 million, Hong Kong had more than 4,000 super-rich people with a minimum net worth of $30 million, second only to New York and London, according to real estate consultancy Knight Frank.

Despite government efforts to narrow the wealth gap, the income of the richest 10% of households in Hong Kong is more than 44 times that of the bottom 10%, according to an Oxfam report.

With no salary increase, sky-high living costs, and the world's most expensive real estate prices, 1/7 of Hong Kong's population is living hand to mouth, even falling into crisis.

Hong Kong is known as a financial center of the world, with a luxurious life in skyscrapers. But not everyone knows that Hong Kong is also considered one of the most unequal economies in the world.

Ms. Lau looked anxiously at the calendar hanging on the wall. She was not due to receive her salary for another week, which meant her family of four living in a cramped apartment in Hong Kong would not have enough to eat.

Life in Hong Kong is harder than ever, unless you're a billionaire, according to Bloomberg.

“We have to eat porridge for three meals a day because we have no money left,” said the 42-year-old woman. Lau is the breadwinner in the family, raising her 7-year-old daughter, 15-year-old son and disabled husband alone.

For every hour she works, Ms. Lau only earns $5.4.

"Hong Kong is a classic case of extreme wealth inequality and little room for improvement," said Richard Florida, author of "The New Urban Crisis."

Housing crisis

Simon Wong, 61, smokes in his "coffin" house in Hong Kong. Photo: Reuters.

Hong Kong’s wealth gap is most evident in housing. Over the past 14 years, Hong Kong’s housing prices have risen by nearly 400%. According to Demographia, when comparing incomes to median property prices, Hong Kong’s housing prices are much more expensive than cities like Sydney, London and San Francisco.

Poor people in Hong Kong live in “coffin apartments” or “cage homes” that are just a few square meters in size. A micro-apartment measuring 12 square meters costs more than $400,000.

Meanwhile, most of Hong Kong’s richest billionaires have made their fortunes in real estate. Cheung Kong Property, owned by tycoon Li Ka-shing, made $2.3 billion in profits last year, while Henderson Land Development, owned by Lee Shau Kee, Hong Kong’s second-richest person, made $1.8 billion.

The total assets held by Hong Kong's 10 richest people are equivalent to 47% of the special administrative region's GDP, according to the Bloomberg Billionaires Index.

Ms. Lau said that for the past seven years, she has not had a single day of rest and still has not saved anything. "I just hope that my children can get a good education and not repeat my life. As for me, I see no hope for the future."

According to VNE