To tackle poverty, the Hong Kong government must learn from Beijing

Rather than granting one-time handouts, mainland initiatives aim to provide long-term help to break the poverty cycle
Hong Kong needs to tackle the structural causes, including rising housing costs, low wages and an ageing population, and work with the private sector

Adrian Ho

Published: 12:30pm, 27 May 2022

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According to the Hong Kong government, more than 1 million residents have been lifted out of poverty by its relief measures. But how poverty is defined has long been a point of contention.

The latest annual Poverty Situation Report found that government intervention brought the 23.6 per cent poverty rate (or 1.65 million people) down by 15.7 percentage points. This is encouraging, but let’s not celebrate; there are still many living in poverty among us.

In a city as affluent as Hong Kong, it is appalling that the poverty rate is so high. Housing expenses, low wages and an ageing population unable to retire are among the most prominent factors. If nothing is done, poverty will only worsen, jeopardising the city’s stability and prosperity.

So, what can be done? We must first comprehend the reasons for and causes of poverty in Hong Kong.

Rising housing costs is one of the most significant contributors. Despite Hong Kong’s low minimum wage, residents pay more rent than for properties half the size of those in London or New York. Hong Kong’s minimum wage is HK$37.50 (US$4.77) – in New York, it’s US$15. For many Hongkongers on low wages, almost all of it is consumed by rent, leaving little for other basic essentials.

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For the 13th year in a row, Hong Kong property prices have surged – hugely beneficial to landlords and developers but bad news for the public. Many struggle to make ends meet since wages have not kept pace with soaring housing costs. More people are being priced out and forced into inferior and frequently overcrowded accommodation such as “coffin homes”.

The government must intervene to stabilise the housing market and make property more affordable. It can expand the supply of public housing, enact rent controls and demand an end to property speculation.

The transitional housing initiative can also help. By mid-2023, Hong Kong will be able to build 16,000 transitional homes, though the initiative is contingent on private developers’ willingness to contribute old facilities or idle land to convert into public housing.

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Low wages are another major contributor to poverty. Despite the city’s high cost of living, many employers continue to offer wages that cannot even meet basic living expenses. To address this, the government can raise the minimum wage, reward businesses that pay reasonable salaries with financial incentives and penalise those who underpay.

The ageing population is another poverty factor. One fifth of Hong Kong is at least 65 years old, with that percentage expected to rise to a third in 2039, and 38.4 per cent in 2069.

Old people struggle to keep up with escalating living costs. The government should offer more support by increasing the old-age allowance, offering affordable housing for seniors and access to healthcare and other services.

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Moreover, the government must learn from the mainland’s effective poverty alleviation programme. Beijing has lifted about 800 million people out of poverty over the past four decades. The approach has been effective as it focuses on the core causes of poverty: low wages, substandard housing and a lack of access to education and healthcare.

A 2015 Communist Party Central Committee report on poverty alleviation identified job training, migration, social welfare expansion and economic development as the major strategies for lifting people out of poverty. In practice, the programme provides job training and job placement aid, as well as housing, education and healthcare subsidies to underprivileged populations.

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The mainland initiatives, rather than granting one-time handouts like Hong Kong’s recent HK$10,000 cash distribution, aim to provide long-term help to break the poverty cycle.

Hong Kong’s poverty definition encompasses a substantial percentage of the population so it is important to focus on specific issues and implement effective policies to address them.

One policy we could adopt from the mainland is to encourage large corporations to make “third distributions” – giving back to society through voluntary gifts and charitable donations. This would help bridge the gap between the haves and have-nots.

We must do more than simply throw money at the problem. The structural causes of poverty need to be tackled. The government has a duty to do this, but it needs the help of the private sector.

Businesses can help by paying decent wages, providing training and development opportunities, and assisting employees who are struggling financially. Hong Kong must come together to find viable solutions.

Adrian Ho, a graduate of the Wharton School of Business, University of Pennsylvania, is a member of the Central Committee of the New People’s Party